What Was Coca-Cola Thinking?

So much for Coca-Cola's (NYSE: KO  ) holiday cheer. The pop star is pulling seasonally stylish yet occasionally confusing cans of Coke, two months earlier than it was anticipating.

The beverage giant rolled out white cans a few weeks ago with artful polar bears, a nod to both the festive holidays and its planned corporate donation to the World Wildlife Fund for Arctic conservation. Some purists are offended that Coca-Cola is veering from its traditional red cans, while some deluded sippers feel that the soda tastes different in white cans.

However, the real problem here -- and it's really the only reason the Atlanta icon is actually abandoning the campaign -- is that too many consumers are confusing the new cans with the silver Diet Coke cans. For dieters or those avoiding high-fructose corn syrup, this is resulting in more than just a simple mistake.

Coca-Cola really didn't think this through, and it will now begin shipping the same holiday design on red cans instead.

"The can has been well received and generated a lot of interest and excitement," a spokesman tells The Wall Street Journal.

Really? So why the switch?

This is just a flat-out boneheaded move by Coca-Cola. Loyalists know the Coca-Cola color scheme. Regular Coke is red. Diet Coke is silver. Caffeine-free Coke is gold. White really is too close a kissing cousin to silver, and it's easy to see why folks grabbing the cans at convenience stores, delis, or perhaps even their own refrigerators may make the honest mistake.

Despite the can-popping fizz, the beverage giants are eyeing slow growth ahead. Analysts see Coca-Cola and PepsiCo (NYSE: PEP  ) growing revenue next year by a mere 4% and 3%, respectively. Even the once fast-growing private label specialist Cott (NYSE: COT  ) is eyeing a top-line uptick of only 4% next year.

Are health concerns over soft drinks finally taking their toll? Is the heady growth of SodaStream (Nasdaq: SODA  ) finally denting the market with its home-based soda system?

The answer is likely no to both questions, but this is certainly not the right time for Coca-Cola to pull its biggest marketing blunder since New Coke.

If you want to separate the fizz from the flat, consider adding these pop stars to MyWatchlist.

The Motley Fool owns shares of PepsiCo and Coca-Cola. Motley Fool newsletter services have recommended buying shares of Coca-Cola, PepsiCo, and SodaStream International. Motley Fool newsletter services have recommended creating a diagonal call position in PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.


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  • Report this Comment On December 01, 2011, at 10:24 AM, rathbateman wrote:

    I'm about as worried that KO's earnings and shareholder return will let me down as I am that global warming will prevent my enjoying a white Christmas here in Michigan.

  • Report this Comment On December 02, 2011, at 12:49 PM, dockofthebay wrote:

    Well, it wasn't really a Classic mistake. Buying Coke shares wouldn't be a mistake either. The dividend yield is attractive and even without outstanding growth ahead, it remains a strong defensive position.

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