Food Mergers and Acquisitions that will shape 2014

Brilliant overview by Paul Conley/FoodDive: three expected trends in the food industry.

1.  Buying market share
2.  Dumping the non-core (refocusing on core)
3.  Buying younger (and more innovative) companies

“This week saw two more giant deals for the food industry in a year that has been filled with mergers, acquisitions and divestments. Sysco announced it would spend $3.5 billion to buy competitor U.S. Foods; meanwhile, WhiteWave announced it would spend $600 million to acquire Earthbound Farm.

Those deals, as different as they were, pointed to a series of business trends in food and beverages that dominated the headlines in 2013. These are hardly new concepts in the mergers and acquisitions world, but they did seem to take on a new urgency this year. And we see no reason why those trends won’t continue into 2014.

BUYING MARKET SHARE
There’s a change-management and business theory known as “corporate lifecycles” that we adore. Without spending a lot of time explaining what is a fairly complex approach, suffice it to say that the theory tracks the growth of companies at various stages of their existence.​

(Image credit: Flickr user karen_2873) One of those stages is called “aristocracy,” when a company tends to struggle to find growth, shies away from new markets, and focuses on short-term financial gains. Aristocratic companies often take to merging with other aristocratic companies in an effort to control market share.

The Sysco-U.S. Foods merger is a classic example of such a royal wedding. But it’s not the only one we’ve seen this year.

Dairy Farmers of America, although structured as a cooperative, has been acting the part of the aristocratic corporation in its mergers with Dairy Maid and other similar companies. Another approach common among aristocratic companies is to buy up smaller competitors in smaller markets. That’s the approach J&J Snack Foods seems to be taking as it buys up every other pretzel maker in North America.

DUMPING THE NON-CORE
When aristocrats age they often enter the stage called “early bureaucracy,” a time marked by corporate restructuring and blame placing. It’s also a time when a corporation will announce with great fanfare that it is shedding non-core assets, returning to its roots, and “doing what we do best.”

(Image credit: Wikimedia Commons

No company has better illustrated this trend in 2013 than Nestle. The world’s largest food company has suddenly taken to selling anything that doesn’t seem Nestle enough. Jenny Craig? Dump it. Givaudan? Who needs it?

Other companies in a similar position include Chiquita — which hired a new CEO in 2012 who plans to focus on the core” and “eliminate distractions ​— and Del Monte Foods, which has decided its core is actually pet food.

BUYING YOUNGER COMPANIES
Aging corporations often look to regain their youth by buying a much younger company that is presumed to have expertise in new markets. Examples this year include Coca-Cola, which is seeking shelter from the anti-soda movement and completed its takeover of coconut-water bottler Zico Beverages; Campbell Soup, which is seeking shelter from the declining market for canned soups by buying Silicon Valley darling Plum Organics; and Post Holdings, which is seeking shelter from the collapsing market for cold cereal by buying every company it can find that doesn’t make cold cereal.

(Image credit: Flickr user sfllaw)The corporate lifecycle approach to understanding businesses isn’t flawless, but it can be illuminating. And nearly every transaction we’ve seen this year fits into the model. (WhiteWave’s purchase of Earthbound Farm is a particularly wacky one. WhiteWave was spun off as non-core by Dean Foods just 14 months ago, and is buying Earthbound as it exits the “adolescent” stage, when company founders step aside.)

And if nothing else, corporate lifecycle theory is pretty good at predicting what a company is likely to do as growth slows. Which is a sort of long-winded way of saying we expect A-B InBev and SABMillerto merge in 2014 in one of the largest aristocratic marriages in food and beverage history.”

 

What Keeps Marketers Up at Night?

Key Issues for Marketers are driving growth, ROI and digital capabilities, per MarketingProfs #marketing #brands

What Keeps Marketers Up at Night?

                   by Ayaz Nanji  |

September 26,  2013

Not surprisingly, the foremost worry for marketers is reaching customers,  with 82% saying it is a major concern, according to a recent survey by Adobe.

The next most common worries are understanding whether campaigns are working  (79% of survey respondents) and proving campaign effectiveness (77%).

Demonstrating return on investment for marketing spend is the fourth biggest  concern (75% of respondents), followed by using digital tools effectively  (70%).

Below, additional key findings from the report, Digital Distress: What Keeps Marketers Up at Night?, which  was based on data from an online survey of 1,000 US marketers (263 digital  marketers and 754 generalists).

   

Digital Demands

  • Only 48% of the digital marketers surveyed feel highly proficient in digital  marketing.
  • Generalists are even less confident, with just 37% saying that they feel  highly proficient.
  • Overall, only one in three marketers think their companies are highly  proficient in digital marketing, and only two out of five marketers think their  colleagues and peers are highly proficient.
  • In particular, marketers feel ill equipped to tackle the digital challenges  of e-commerce, personalization, and measurement.

Marketing Proficiency and Change

  • In general, marketers have low confidence in their organization’s marketing  performance. Only 40% think their company’s marketing is effective.
  • Just 44% say their marketing departments have a great deal of influence over  their organization’s overall business strategy.
  • 76% of marketers think marketing has changed more in the past two years than  the past 50.
  • Marketers are mixed on what areas to focus on in the future—with social  media, personalization, digital advertising, and cross-channel marketing all  seen as rising in importance over the next three years.

ROI

  • 83% of respondents said proving return on investment on marketing spends is  important.
  • 79% say it will be even more important to prove ROI in the next 12  months.

About the research: The report was based on data from an online survey of 1,000  US marketers (436 decision makers, 499 staff members; 263 digital marketers, and  754 marketing generalists). The survey was conducted between August 26 and  September 11, 2013.
Ayaz Nanji is a digital strategy and content consultant. He  is also a research writer for MarketingProfs. His experience includes  working as a strategist and producer of digital content for Google/YouTube, the  Travel Channel, and AOL.

Samsung’s Strategic Apple Smackdown

Samsung continues to brilliantly challenge, and deposition, the Apple brand in its newest Galaxy S4 advertising campaign. Reminiscent of Apple‘s classic “I’m a Mac. I’m a PC” strategy, in which Apple strategically portrays IBM as inferior, old, and tired, Samsung contemporizes that idea by showing itself as the superior, younger, and cooler option. This continues Samsung’s successful strategy of demonstrating wins on brand performance and image vs. Apple that it has employed for several years.

It’s working beautifully, particularly at a time when Apple has finally shown some vulnerability. In fact, according to Interbrand‘s recent Best Global Brands report, Samsung was the biggest rising star in brand valuation – up 40% versus the prior year, now placing it as the world’s 9th most valuable brand. In addition, Samsung has grabbed the #1 market share position in smartphones, jumping ahead of Apple and Nokia. According to Ad Age, Samsung’s market share jumped to 30%, up 9 percentage points vs. the prior year, partly at Apple’s expense, who lost 2 share points. Beyond portraying Samsung’s users as far more savvy, bright, and aspirational, the campaign also persuasively communicates several of Samsung’s feature and performance advantages.

Samsung’s innovation and communication strategy beautifully position themselves as a leader, while strategically redefining the competitive brand as an inferior option.

Lessons learned:
1. Brand challengers can effectively surpass the leader by building brand performance and image superiority. The strategy works particularly well when you win on the primary benefits that drive brand selection and loyalty.
2. Exploit your competitors’ weaknesses and vulnerabilities. Even the most dominant brands have ‘chinks in the armor’ that you can exploit.
3. Innovate quickly and often. Market leaders often innovate and execute more slowly, deliberately, and have higher volume hurdles.

Marketing Innovation: How to be among the Successful 5%

Marketing innovation is a key source of revenue and profit growth, as well as a great opportunity to strengthen your brand and competitive advantage. Most companies’ annual plans rely on marketing innovation. According to Ernst & Young and BASES, only 5% of U.S. new products are successful. These are the seven Best Practices, including the avoidable common mistakes, among successful innovation companies:

1. Set Innovation Goals and Accountability – This is a simple idea, but it is often overlooked. Successful innovators consistently set clear innovation goals, specifically:

• Sales, profit, and payback goals for the entire Innovation effort (all products and services), typically for a one-year or five-year timeframe and
• Sales, profit and payback hurdles for each project to merit consideration
• Both Marketing and Product Development have inter-dependent accountability for delivering these goals

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2. Demonstrate project viability before committing resources – Each potential new product should have demonstrable financial viability and market need before resources are allocated. This simple step is skipped with alarming consistency and is a major cause of downstream profitability problems and innovation failures. Answer these two questions at the Idea stage:
• Is the product financially viable? Insist on reviewing crude Year 1 and Ongoing (typically Year 3) Profit & Loss statements on each proposed project. This demonstrates whether the project is financially worthy of being considered, needs rework, or should be thrown out. The Year 1 P&L is important to understand the potential investment issues. The Ongoing P&L illustrates the ongoing business model.
• Is there a true consumer unmet need for the product? You must be able to answer: 1) who is the target; 2) what is the relevant consumer benefit? (Note that it must be an important, motivating benefit to consumers, not a “nice to have,’ lower value benefit) 3) how is it superior to competition? When you launch a new product or service, you are betting that consumers will change their existing purchasing behaviors and choose you. You must be superior to their current options and solve issues they care about. Be sure. Ask your target market.

2. Leverage True Core Competencies – The most successful innovators exploit what they can and do best. They wisely avoid areas where they lag competitors. Innovation winners have a deeper self-knowledge of core competencies than the superficial “leader in X industry.” The Management Team has rigorously evaluated and determined their best internal processes, to find what they do, or realistically can do, better than their competitors. For example, Frito-Lay fully understands and leverages its store-door delivery, manufacturing, and snack innovation core competencies. Conversely, even uber-performer Frito-Lay has made the costly error of presuming snack food brilliance would translate to success in the very different cookie industry. Play from strength. Know and stick to your core competencies.

3. Drive Collaboration to Optimize Outcomes – Extraordinary innovation results consistently occur when R&D, Marketing and Operations collaborate and continue to improve the idea throughout its evolution. Continue reading

12 Valuable Tips for Video SEO Beginners

See on Scoop.itMarketing Strategy Tips from Katz Marketing Solutions

Excerpted from article on Search Engine Watch:

“If you aren’t optimizing your videos to match what people are searching, your videos are likely to get lost and not reach their intended audience. Without reaching their intended audience, they serve no purpose.

 

Use the following 12 valuable tips to get your video to reach the first page of Google and YouTube, but most importantly build visibility to a large niche audience that is interested in what you have to offer.

 

1. Content Quality Check:
Ensure your videos are relevant, informative, and rich with content. Don’t waste time producing videos that have nothing to do with your brand or service.

2. Title:
Capture the potential viewer’s attention with a catchy title that contains related key phrases that are relevant to your brand or service.

3. Tags:
Optimize your video with important key phrases or keywords. Don’t use complicated words or terminology that may not be common to the average person.

Continue reading

Brand Marketers Totally Miss Social Media Influencers

See on Scoop.itMarketing Strategy Tips from Katz Marketing Solutions

Tammy Katz ‘s insight:

Brand Marketers underspending on influencers, overspending on Facebook ‘acquaintances.’      Are you strategically identifying influencers?    Do you have an influencer strategy?  Are you measuring social media conversion (vs noise?)

See on www.cmo.com

Super Bowl XLVII Ad Winners and Atrocities

No spectacular ads last night (except for the Beyonce brand), but several excellent ads that were well worth the $4.0 million investment for the ad time, pre- and post-game public relations and social media legs.     Super Bowl advertising with strategically sound brand communications that focused on persuading consumers to buy and garner a return-on-investment, rather than sophomoric – or just lame – humor at the expense of a selling message.   Budweiser, Tide, Doritos, Skechers, and Milk Processors most of the car ads were particularly effective at keeping their products central to  the main message (vs. prop ‘afterthought’) and told engaging stories about the quest for the brand.

But some spectacularly cringe worthy ads too:   GoDaddy (disgusting, patronizing and unclear message) and Samsung (fatal flaw: inside jokes about how advertising is developed amuses no one except those who made the ads and unclear message).

Special kudos to Oreo’s brand team and brilliant agency, 360i,  for their nimble Oreo ‘You Can Still Dunk in the Dark’ mega tweet  (over 10,000 tweets) which was created on the spot during the power outage (and depleted chicken wings).    Another bravo to Beyonce’s breathtaking performance (done gratis, but 13 minutes is worth $104 million in advertising).

Here are the winners (and worst) from four marketing mavens – USAToday’s AdMeter (panel popularity), Mullen and Radian6’s Brand Bowl (twitter volume and sentiment),  us (effectiveness), and AceMetrix (Persuasion and Watchability)

USA Today – AdMeter                              

Best:
1.   Budweiser Clydesdale (horse and trainer reunited) 


2.   Tide (Miracle Stain)
3.   RAM (farmers)
4.   Doritos (fashionista Dad)
5.   NFL (Deion Sanders returns)

Worst:  GoDaddy – So awful it doesn’t deserve a link – get domains at 1and1, just in protest.

Mullen and Radian6’s BrandBowl

1.  Volkswagen (get happy office guy)  


2.  Bud Light (voodoo)
3.  Calvin Klein (guy in underwear)
4.  Audi (prom)
5.  Taco Bell (viva young)

Worst:  iRobot

Katz Marketing Solutions

1.  Tide (Miracle Stain) 


2.  Coca-Cola (security camera)
3.  MILK board (Rock running)
4.  Budweiser (horse and trainer reunited)
5.  Skechers (cheetah race)

Worst:  GoDaddy

AceMetrix

1.  Budweiser (horse and trainer reunited) 


2.  MILK board (Rock running)
3.  Coca-Cola (security camera)
4.  Jeep (home again)
5.  Doritos (goat 4 sale)

Worst:   Calvin Klein

5 Ways to Maintain Brand Growth and Relevance: StarKist’s Revitalization Strategy

StarKist‘s marketing strategy is a rich example of maintaining brand relevance and accelerating profitable growth.    Despite having some significant brand challenges:  a mature category, a mature brand, dated brand equities, and pricing challenges, their strategy is spectacular and effective.

Here are the 5 brand revitalization best practices they’ve nailed:

1.   Maintain a clear, consistent, and relevant brand positioning  –  StarKist’s brand’s positioning is the best brand of high quality, nutritious tuna.   This has been a virtual constant for over 60 years.   Consistency is relatively easy, but maintaining relevance over time is more difficult and even treacherous, if you don’t do it.    They have brilliantly adapted, but not radically changed, the brand positioning to ‘the best brand of high quality satiating nutritious tuna.’     That transformative “tweak” moves pre-packaged tuna from dated and increasingly irrelevant, to a brand that is contemporary, appealing and compelling for today’s consumer.

  

Continue reading

AZO Advertising is Amiss: Talk to your Consumer

The AZO campaign features a fatal flaw that can kill the effectiveness of any advertising:  it’s not clear.   While AZO is advertising a compelling and effective urinary pain reliever, the commercial uses “company speak,” not consumer language.  

Throughout the spot, AZO is presented as a solution for UTI’s.  That’s great if you are a doctor or work for AZO and know what that is.   Sadly, however, most consumers don’t know that they mean ‘urinary tract infection.’

It’s a tragically common, and avoidable, mistake in marketing communication.   Companies get caught up in their own knowledge and internal language and forget who they are talking to.    Remember, when you do any marketing communication, you must talk to your consumer in THEIR language, not yours.

So, sadly, this commercial only reaches and persuades a fraction of their potential audience.    Make sure you keep it simple and avoid wasting money.  Keep it simple and talk directly to your consumer.

Lessons Learned:
1. Keep your target consumer at the forefront of all marketing communications. Talk to them in their language, not yours.
2. Before you produce anything, double-check that your communication is clear with unbiased consumers, or even internal employees  who are not involved in the marketing or technical development.   They are often too close to the process to stay unbiased.
3. Stay flexible.   If you happen to overlook an important, fixable issue like this, fix it!    In this case, the small cost of changing the words (with a new audio recording), would dramatically increase the effectiveness and sales impact of this advertising campaign.

Ad Bowl 2012: Return to Sanity

While there were no must-see, spectacular ads last night, there were many excellent ads that were well worth the $3.5 million investment for the ad time, pre- and post-game public relations and social media legs.      Super Bowl advertisers returned to their senses with strategically sound brand communications that focused on persuading consumers to buy one return-on-investment, rather than misguided attempts to win on entertainment and humor.   Doritos, Oikos, Skechers, H&M and most of the car ads, just to name a few, had their brands central to the storyline (vs. prop ‘afterthought’) and told engaging stories about the quest for the brand.

Special groans for Chevrolet’s dark and tasteless Silverado apocalypse ad.     Visuals of tragic wreckage, in which the guy in the Ford perished.    Disgusting and a terrible statement, if any, about the brand.

Here are the winners (and worst) from three marketing mavens – USAToday‘s AdMeter (panel popularity) and  USAToday’s Facebook AdMeter (FB popularity), Mullen and Radian6’s Brand Bowl (twitter volume and sentiment), and us (effectiveness).

USA Today – AdMeter                              

Best:
1.   Doritos (dog bribes cat owner)


2.   Volkswagen (dog gets fit, Star Wars)
3.   Skechers (dog in sneakers wins race)
4.   Doritos (sling baby)
5.   M&M/Mars (Mrs. Brown)

Worst:  GE (turbine workers make energy)
Continue reading