The challenges facing once iconic brands
Some of the most iconic retail brands are losing their lustre with owners making multi billion dollar write downs as consumer tastes and buying habits evolve. How are owners trying to recoup their losses – and can they adapt to change? (Axios)
Key points
- $15bn write down at Kraft Heinze as owners realise the brands they bought in recent years are worth less
- $4bn total write downs at Coty on Clairol and Covergirl brands bought from P&G three years ago
- Campbell’s soup sales have declined in eight of the past 10 years
- Influencer brands, direct-to-consumer hitting cosmetics, white labelling and healthier tastes hitting food
- Big meat firms such as Tyson attempting to drive growth from plant-based foods
- Campbell's Soup to launch "plant-based cooking platform"
A succinct summary of the challenges big brands and their marketing teams are struggling to solve in the face of changing consumer tastes and shopping habits.
Axios’s wrap coincides with Lady Gaga partnering with Amazon for her new beauty line, suggesting further pain is in the pipeline for cosmetics brands – at all price ranges - as they are squeezed by value private labels and luxury arrivistes with massive followings.
But what it doesn’t include is the realisation at companies such as 3G Capital Partners, the private equity firm behind Kraft Heinz, that mergers and cost cutting for big CPG may no longer work in the current environment. Brazilian billionaire Jorge Paulo Lemann recently defended 3G’s strategy but said that the company will reinvest in its brands – only it may not be through traditional advertising.
“We are getting more and more consumer focused, and we also want to embrace new technologies, because consumers are changing,” per the AFR. "Now we must create our own platform and talk directly to consumers," said Lemann.
Whether there is a viable DTC route to recovery for Oscar Myer hot dogs and Kraft Macaroni Cheese remains to be seen. But stranger things have happened in marketing.
