Investment bankers had pitched a breakup to Kraft Heinz for years without success, sources said. The company finally agreed to a split when it realised that two simpler companies would be easier to manage and understand, garnering higher stock prices.
This strategy is gaining momentum in the world of food & beverage conglomerates.
Read the full article on the Yahoo Finance website
NAM Implications:
- Essentially, the whole idea of brand franchise is being re-evaluated.
- i.e. because of suppliers need to pass on unprecedented cost increases…
- …and relying on brand loyalty overmuch in terms of willingness and ability to pay higher prices (without question?) has caused massive migration of former brand-loyals to try own label equivalents and discounters in a search for value…
- …and finding the compromise not to be as great as years of brand advertising had implied.
- Plus the fact that a strong brand heritage can be a constraint on how a supplier’s other brands are positioned…
- …means splitting a product portfolio into logical portions can provide greater freedom of movement.
- Kraft-Heinz is but one example of what is currently being discussed in some boardrooms…
