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is possibly curving back up, banana-style. Operating income had doubled over the preceding two years to $156 million, not exactly a colossus, but respectable enough. Bananas still account for 60 per cent of the business, but that’s a big improvement on the position five years earlier when they made up 98 per cent of sales. Debts have been halved and profit margins are up a full percentage point, with bananas delivering a profit to sales ratio of 8.2 per cent. New products such as Chiquita minis, Chiquita Fruit Bites, and their latest addition, Chiquita Fruit Smoothies, seem to be gaining ground.

Lessons from Chiquita

‘Catch-22’ situations should be avoided. Chiquita tried to stretch its brand when banana sales were slipping. This led the company into debt, because it wasn’t selling enough bananas to cover costs. It needed to move beyond bananas to bring in more money, but more money was needed to move beyond bananas. A classic ‘catch-22’.

Historical identities are hard to shake off. The company has been linked with bananas since the 1940s and that association has been difficult to undo.

A brand is never under total control. The development of a brand is only ever predictable to a certain extent. Some factors will always be beyond control. Chiquita’s expensive attempts at diversification left the brand ill-prepared to cope with unavoidable situations such as Hurricane Mitch, the excessive production of bananas from Ecuador and the Euro’s weakness against the dollar.

To understand the risks of brand extensions it is worth taking a brief look at 10 more extension failures.

29 Country Time Cider

Country Time Lemonade Drink was launched in 1976 by Kraft foods as a powder mix, and soon became the top-selling lemonade product sold through US grocery and convenience stores. It successfully extended its line with Country Time Pink Lemonade, which was introduced in 1977. However, when the decision was made to extend the well-known Country Time brand to apple cider, the brand experienced its first failure. Although the brand managers may have thought the brand was chiefly associated with ‘good old-fashioned taste’ (a Country Time slogan) – an attribute which could be applied equally well to cider – the reality was that the brand simply meant ‘lemonade’ to most customers.

30 Capital Radio restaurants

In November 1996, London station Capital Radio acquired the My Kinda Town themed restaurant company. Rather than keep the My Kinda Town name, the company decided to set up a Capital Radio themed restaurant. As with Planet Hollywood and the Fashion Café, these restaurants were never able to generate enough return custom. Although Capital Radio could boast millions of listeners, very few could see a logical connection between the station and food – because, of course, there wasn’t one.

31 Smith and Wesson mountain bikes

In the United States, gun manufacturer Smith and Wesson is a well-known brand. When it decided to capitalize on this wide recognition by launching a range of Smith and Wesson mountain bikes, the company clearly failed to grasp the golden rule of brand extensions. Namely, that the extension must link with the core brand. There needs to be some kind of correlation between the original product (in this case guns) and the extension. Guns and bikes may both be made out of metal, but other than that it is hard to perceive a connection.

32 Cosmopolitan yoghurt

Yes, that’s right. Cosmopolitan – the world’s biggest selling women’s magazine – launched its own brand of yoghurt. However, although this extension failed (the yoghurts were off the shelves within 18 months), Cosmopolitan has had success with other crossovers. For instance, Cosmopolitan is now the UK’s second-biggest bed linen brand. The connection in this instance is obvious. Namely, sex. There are also plans for Cosmopolitan cafés, which may also fit within Cosmopolitan’s ‘sex and the city’ identity.

‘I’m not surprised Cosmo yoghurts failed,’ says Jane Wentworth, a senior consultant with the brand consultancy Wolff Olins.