McDonald’s Going Veggie, Coke Brand Slipping

What is happening to our freedom fries? Just a day after Burger King proudly announced their diet fries, we hear of McDonald’s going veggie. They topped the Satisfries gambit by offering to dump fries from value meals altogether for customers who would rather get a salad or fruit.Most Valuable Brands

On top of all this, the news comes today that Coke has slipped from being the number one brand in the world to number three. This is the 14th year that Interbrand has reported on the value of the world’s top brands. Every year until 2013, Coke has been number one. But now Both Apple and Google have passed America’s favorite fizzy sugar water.

In case you think this is frivolous marketing fluff, think again. These brands are vital business assets worth billions of dollars. It’s that value — brand equity — that determines these rankings. Coke, valued at $79 billion, is now roughly 20% less valuable than the Apple brand at $98 billion, according to Interbrand’s estimates.

The changing brand equities reflect important changes in consumer tastes. To consumers who are increasingly spurning fizzy sugar water and valuing health, relevance of the core Coke brand is dropping. Sure, it’s still the third most valuable brand in the world, but the trajectory is not one that any marketer wants to see.

McDonald’s, on the other hand is holding steady at number seven on the list. Its 2013 value rose 5% (compared to Coke’s 2% gain), which was enough to keep its place in the rankings.

We suggest that the McDonald’s brand is faring better because they are working harder to improve the nutritional quality of their offerings. De-emphasizing their legendary fries was not an easy move to make. But it keeps them relevant.

By contrast, though Coke is fine-tuning their product mix, they are much more timid. Telling people to move more doesn’t help their brand all that much. They remain wedded to full-sugar Coke and defined by it — even though they have plenty of better offerings. And so, the brand is losing relevance.

Fortune favors the bold.

Click here to read more in Slate, here to read more in Bloomberg Businessweek, here to read more in the New York Times, and here to read the Interbrand report. 

Gimme My Salad, photograph © ChrisK4u / flickr

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