SunTrust's Soft-Drink Mystery Solved

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Is trouble brewing between SunTrust Banks Inc. and Coca-Cola Co.?

Maybe, maybe not. Coke has moved its closely guarded secret formula out of a SunTrust bank vault in downtown Atlanta, the hometown of both companies. The beverage giant unveiled its new home Thursday: a vault inside an expansion of the World of Coca-Cola museum several blocks away.

The move may be more of a publicity stunt than an end to the longtime relationship between the two firms, but it certainly adds to the sense that they are not as close as they once were.

The ties between Coca-Cola and $166.5 billion-asset SunTrust span more than 90 years. Trust Co. of Georgia, which helped take Coca-Cola public in 1919, was a predecessor company of SunTrust's. A piece of paper containing the formula for the brown-colored, sugary drink was placed in a Trust Co. of Georgia bank vault in 1925.

In recent years, SunTrust sold off more than 40 million shares of Coke stock that it had held since 1919 to raise capital. And Coca-Cola lately has hired other investment banks for big securities offerings; BNP Paribas, Citigroup Inc. and Goldman Sachs Group Inc. are the lead banks on Coca-Cola's $2 billion notes offering for this year.

The move Thursday coincides with the 125th anniversary of the formula. Rather than being stored in a dark basement of an anonymous office tower, the secret formula will now be located in a vault that any member of the public can view, Coca-Cola said in a press release.

But don't get too excited about getting a peek at one of the world's most-famous trade secrets. Visitors to the World of Coca-Cola can only see the black box itself, not the actual document. The box is held inside a bank vault, complete with an old-school, round-shaped vault door. A multimedia presentation will give visitors something to do besides gaze upon a black metal box.

In the news release, Coca-Cola detailed how the formula made its way from the brain of its inventor, Atlanta pharmacist John Pemberton, to a piece of paper. Pemberton invented the formula in 1886, but he never wrote down the recipe and shared it with a very small group of people. In 1919, Ernest Woodruff and some investors purchased Coca-Cola Co. from Asa Candler. For a loan that he secured to finance the acquisition, Woodruff provided as collateral a piece of paper with the formula; Woodruff had asked Candler's son to commit the formula to paper. The paper was held at Guaranty Bank in New York from 1919 to 1925, when it was transferred to the Trust Co. of Georgia.

Neither Coca-Cola nor SunTrust responded to requests for comment.

Until Thursday, a recent report about that the formula was on the move had created a mystery.

John Sicher, the publisher of Beverage Digest, a Bedford Hills, N.Y.-based trade newsletter for the industry, had written that Coke was withdrawing its formula from its longtime resting place.

"They're moving the secret formula, and I do not have confirmation where they are moving it to," Sicher said Wednesday. He cited "industry sources."

Another curiosity were recent messages sent from a Twitter account with the handle "@DocPemberton." Named for John Pemberton, the Atlanta pharmacist credited with concocting the secret formula, the DocPemberton tweets appear to be written from inside the Coca-Cola corporate fortress, Sicher says.

The DocPemberton tweets (which do not reveal the identity of the author) hinted that something was amiss: "Well … it looks like it's time to panic. If you see any document marked 'John Pemberton's Secret Coca-Cola Formula' please ignore & return."

"I've checked all of my pantaloons, bloomers, breeches, britches, clam diggers, dungarees & jodhpurs & still have not found the formula," a tweet Tuesday said.

Beverage novices may wonder how plants around the world make the product if the formula is locked away. The famous trade secret is known only to a few employees at Coca-Cola Co., according to accounts of how the company operates. The formula is for a syrup concentrate that the company makes at its own facilities. It sells the syrup to bottling companies; some of those bottling companies are owned by Coca-Cola itself. Then the bottlers combine the syrup concentrate with water and sweeteners, package the finished beverage, and distribute the drinks throughout their assigned geographic franchise.

In truth, the formula may be more about creating a mystique than a business edge. Coke's real formula is its long history, mastery of marketing and prowess in global distribution, many experts have said.

The secret formula supposedly has been revealed before, in places such as the This American Life radio show this year and in a 1979 article in The Atlanta Journal-Constitution. Sicher said he does not think Coca-Cola's decision to move the formula out of a SunTrust vault is connected to that alleged leak (no pun intended).

There is still a connection through the companies' boards of directors. Sitting on Coke's board are former SunTrust Chief Executive James B. Williams and Maria Elena Lagomasino, the chief executive of GenSpring Family Offices LLC, a SunTrust wealth-management subsidiary. And former Coke CEO Doug Ivester is a SunTrust director.

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