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11.2.2011 Brand models must change

Brand owners must nurture a distinctive set of "capabilities" to succeed during the "next wave" of consolidation in the fast moving consumer goods sector, a report has argued. "For decades, CPG companies have made market participation decisions based on the assets that they have … or that they can acquire or build to serve big areas of demand," the Booz & Company report said."To a remarkable extent, however, their strategic thinking has ignored what they do better than anyone else - that allows them to execute better than the competition and deliver superior returns on those assets." The current climate requires that firms identify an "essential advantage" drawing on how they alone create value, and then ensure portfolios and tactics are highly coherent with this vision.

Procter & Gamble divested non-core food products like Folgers and Sunny Delight, bought Wella, Gillette and Clairol, and doubled sales between 2000 and 2010, when its billion-dollar brands rose from ten to 22 in number. Having adopted the mantra of "touching and improving" customers' lives, the owner of the Tide and Pampers brands is now combining the benefits of a worldwide reach, major brands and digital technology to foster an integrated model.

Elsewhere, Unilever's previous "Path to Growth" and "One Unilever" initiatives saw the manufacturer of Knorr and Hellmann's undertake an internal restructure and streamline its stable. The Anglo-Dutch group is embarking on another scheme, the "Compass", snapping up Alberto Culver and Sara Lee's personal care division, alongside detailing plans to enhance environmental metrics. "Confidence is back. The mindset in Unilever is once again a winning one," Paul Polman, Unilever's ceo, said. "The consumer and customer are back at the heart of our business."

B.L. 11.2.2011