Why some brands might benefit from 'foster care'
The potential Kraft Heinz/Unilever takeover brought the impact that further consolidation could have on some of Britain’s best-loved brands into sharp focus. Unilever’s CEO Paul Polman, well-known for championing sustainable business development through ‘brands that have purpose’, fully understood the threat that the takeover posed to his ambitions for Unilever.
Mergers and acquisitions inevitably pose the question of how to maximise the value and growth potential of a vast and diverse portfolio of brands; in particular, how to manage non-core brands. The default solution is to focus on selected ‘power’ brands, leaving the remainder to languish until they are either sold or stagnate.
Kraft Heinz’s move has fuelled speculation over the break-up of the Unilever portfolio, with the firing squad setting its sights on the spreads division, potentially putting brands such as Flora and Bertolli up for sale. Reports are circulating that private equity firms have expressed an interest.
Rather than divest a brand through sale - often complex, disruptive and time-consuming - or consigning it to the ‘non-investment’ category, there is an alternative: ‘brand fostering’ - an affordable, commercial cost option that offers significant value creation for brands, business plans and strategies.
The benefits of brand fostering are numerous. It’s a solution that enables a business to retain one of its most valuable assets - its brand portfolio - without having to lose the equity and value of brands it has built either through organic growth or acquisition, optimising sales potential and maximising shareholder value.
Handing over care for an under-performing or neglected brand to an experienced third party puts it into an environment that opens up opportunities for it to blossom, while enabling a company’s marketing department to focus on its ‘power’ brands.
The brand guardian breathes new life into the brand, bringing focus, speed, agility and cost-efficiencies that re-invigorate the brand. But the benefits don’t stop there. Brand fostering can also re-assess and re-engineer the brand to tap into current market trends; open up access to new trade channels or territories; and optimise return on investment from smart portfolio management and sales force implementation.
Brands fostered by the Ceuta Group have the backing of a vast range of global services from shopper, category and data insights to brand strategy and creative design, from field and experiential marketing to multichannel sales and distribution. All of the support a brand owner can provide… and often more.
Widely used in the pharmaceutical industry, brand fostering is under-utilised in the grocery sector. It could be a solution for any brand owner looking to optimise ROI from their portfolios as well those looking to expand their footprint into new markets or trade channels.
Polman is to be applauded for his vision of creating sustainable business through brands that have purpose. The question is how to make that commercially viable too - brand fostering could provide the answer.
Edwin Bessant is CEO of Ceuta Group