Friends, Fools, countrymen, I come not to praise Coca-Cola (NYSE: KO ) ... but to grudgingly approve of its burial of the "Coca-Cola Classic" label. Fellow corporate titans with similarly tainted brands, I hope you're taking notes.
First, some history
After successfully selling its sugary concoction for nearly a century, Coke decided to change the formula some two decades ago. It conducted blind consumer taste tests among Coke, PepsiCo's (NYSE: PEP ) eponymous alternative, and a third formula -- "New Coke." Based on the tests' outcome, in 1985, Coca-Cola announced it was introducing a new formula of fizzy goodness...
But the moment taste-testers removed their blindfolds, they rebelled at the change. Ultimately, New Coke failed as a concept, and Coca-Cola -- tail wedged firmly between its legs -- restored the old formula under the new moniker "Coca-Cola Classic"
Fast-forward 24 years …
On Friday, the syrup magnate confirmed that it's placing the "Classic" moniker in a carbonated coffin. Good riddance. Personally, I haven't seen a bottle of "New Coke" on store shelves in more than two decades. (The concept was officially canned -- pun intended -- in 2004, after limping along in a few regional markets as "Coke II.")
For roughly two decades, Coke hasn't needed that "Classic" label to distinguish its flagship brand. It seems the word only reminded consumers and investors of Coke's biggest blunder ever. I'm not surprised that Coke is changing its name -- I'm just surprised it's taken 24 years to do so.
The upside of a downfall?
There may be a silver lining to Coke's stumble -- assuming it gave other businesses a chance to learn from the company's mistake. In other recent corporate snafus, we've seen little or none of Coke's stubbornness in sticking with a bad label:
- Microsoft's (Nasdaq: MSFT ) Vista has been a disaster, but the company moved quickly to dump it down the memory hole. When it upgrades its operating system this summer, we won't be installing "New Vista," but upgrading to "Windows 7."
- After letting the brand wither on the vine for years, Ford (NYSE: F ) finally killed the "Taurus," replacing it with the entirely unsuccessful Ford Five Hundred. Soon after Boeing (NYSE: BA ) alum Alan Mulally arrived on the scene, he ditched the "500" and restored the Taurus name to its latest iteration.
- And speaking of Boeing, this Fool wonders how much longer the 787 will be called the "Dreamliner." The company's serial production delays have translated into something closer to a nightmare. As soon as Boeing gets the kinks worked out on the plane, I think it'll be time for a new moniker.
What this means for Coke
Boeing can't afford to let the Dreamliner's slow start taint the brand. Here, Coke's 20-year tardiness should serve as an object lesson. In fact, I'll predict that when Coke kills the "Classic" brands, it won't suffer anything close to the $900 million goodwill writedown FedEx (NYSE: FDX ) incurred when it eliminated the Kinko's brand.
Kinko's had a good reputation; killing it cost FedEx money. But for Coke, Classic has a negative connotation. Killing this tagline won't cost Coke much at all. It could even help the firm by streamlining its upcoming "Open Happiness" advertising push, as the soda pop resumes sales under a single name worldwide.
What the Classic catastrophe can teach everyone else
Speaking of unification and brand sterilization, perhaps no one needs a renaming spree more than the banking sector right now. High-profile implosions-turned-acquisitions will stink up the joint for these companies' new owners. Let's hope they don't wait 20 years to carry out the fumigation these brands desperately need today.