Tamara Minick-Scokalo resurfaces as Kraft’s European confectionery chief

February 4, 2010

I’m reliably informed that the “senior role” at Kraft being taken up by former Cadbury European chief  Tamara Minick-Scokalo is head of European confectionery.

She will therefore be the pivotal figure in integrating Kraft’s existing product range – principally Toblerone and Milka – with the newly acquired brands at Cadbury.

Readers of this blog may recall that she left Cadbury in slightly mysterious circumstances at the beginning of last July. An American with 20 years experience in Procter marketing, Minick-Scokalo moved to Europe a few years back (she is based in Geneva) and took on the top marketing/general management roles at US wine maker E&J Gallo, then Elizabeth Arden. Two years as head of global commerce at Cadbury Schweppes followed. She afterwards became European president of the demerged Cadbury confectionery operation, in January 2009. As such, Minick-Scokalo sat on the Cadbury executive board, reported directly to chief executive Todd Stitzer, and had control over Cadbury’s confectionery operations in both East and West Europe: that is, over 10,000 employees, €1bn annual sales and numerous factories.

But Stitzer, up to this point her champion, let her go after only six months in what appears to have been a selective senior management cull designed to cut costs.

How fortuitous then, that Kraft should launch a takeover bid for Cadbury in September and, having sown up the deal a few days ago, hire Minick-Scokalo to mastermind the brands’ integration from March 1. Whatever else may be wrong with the corporate “merger” (Warren Buffett is the expert on that matter, not me) integration of the two confectionery operations in Europe looks like an obvious fit. Cadbury, outside the chocolate-gobbling UK, is a patchwork quilt in need of further rationalisation; Kraft, on the other hand, already has strong Euro brands in Milka, Toblerone and Terry’s.

I do hope the senior managers who stay on at Cadbury (the top three having already quit) were nice to Minick-Scokalo before she left. Ignasi Ricou, who succeeded Minick-Scokalo as Cadbury president of Europe, and Phil Rumbol, UK marketing director, will no doubt be polishing their CVs just in case.

I imagine she will also have a hugely enhanced fan club in the marketing services world. Ogilvy, for example, handles the Toblerone brand and JWT does Kraft corporate advertising. Fallon need not lose all hope, however. Minick-Scokalo championed the ‘Gorilla’ advertising campaign.


Will Kraft know what to do with Cadbury’s brands?

January 19, 2010

Now that Kraft has acquired the highly-prized Cadbury brands – and turned itself into the world’s largest confectioner ahead of Mars/Wrigley – will it actually know what to do with them?

First, let’s get something out of the way. There’s been a lot of phony sentimentality about Cadbury and its brands during this protracted takeover. The global geographical fit between these two companies is highly complementary and the cultural gulf far less of a chasm than it appears. Sure, Kraft is a machine conglomerate that munches brands for breakfast: I won’t waste time on that. But Cadbury is not quite the pure-play quintessentially British property it seems. A Quaker tradition and two hundred years of family history cannot disguise the fact that Cadbury these days is an international corporation like any other. Its key shareholders are American, its chief executive is American; the breadth of its markets is such that Britain accounts for a small part of them. Of a workforce of about 45,000, only 11% are based in the UK. Certainly it has proved an invaluable training ground for generations of UK marketers, who retain an affection for the company, and produced some great and quirky advertising (latterly through Fallon). But I doubt whether that has much bearing on how the company is regarded outside the UK.

The truth about Cadbury is it was – like a number of other great British corporate brands such as United Biscuits, Beecham, Boots and ICI – a relic of the British Empire. The Empire gave it favourable and abiding access to invaluable growing markets which would these days be recast as “emerging”. India springs to mind as a superior example. Nevertheless, just like the rest of these British brands, it created insufficient momentum to transform itself into a genuinely global corporation. Cadbury, whether as a soft drinks operator (Cadbury-Schweppes) or as a pure-play confectioner, conspicuously failed to crack the single greatest market in the world, the United States of America. Its long-term fate, in a globalising economy, could not therefore be in doubt. The surprise, if anything, is that it has taken so long to pass under the hammer.

That said, is Kraft the right global corporation to buy it? Whatever Kraft executives may say in public, the squeeze on Cadbury’s assets will start sooner rather than later. It will have to. Cadbury, it almost goes without saying, always meant a lot more to Kraft’s future than the other way around. A low-growth US-focused conglomerate in desperate search of high-growth emerging markets (such as Cadbury’s), Kraft needs not only to appease long-suffering investors (Warren Buffett being the largest) but to pay down a vast amount of debt it has incurred as a result of the takeover. By my calculations, this alone is about £7bn. The total figure is about £22bn. The near 20,000 jobs it shed and 35 sites it closed in the UK between 2004 and 2008 (mostly Terry’s) will be as nothing to the cost-cutting stringencies it inflicts on the Cadbury estate. Attila the Hun’s scorched earth policy may come to be judged mild by comparison.

Ultimately, however, there is a more important strategic issue at stake. Will Kraft know how to make best use of the brand culture it has acquired? I rather fear it won’t. Kraft is very good at text-book, incremental marketing. It knows how to build on existing brands by rolling them out internationally, as it has done very successfully with Oreo and will probably shortly demonstrate with TUC. It is less gifted in the new product development area. It’s hard to believe Kraft executives would ever have had the wit, or self-confidence, to acquire Green & Black’s; still less to build from almost nothing some of the world’s fastest-growing chewing-gum brands (Trident et al). You could, of course, argue that, thanks to Cadbury, the essential building blocks are now in place. All that is required of Kraft is to deploy superior resources to ensure that they are properly, if less imaginatively, exploited.

Even there, I find room for doubt. Mars, now it has acquired Wrigley, seems better balanced to exploit its global position; it remains essentially a confectioner. Kraft, on the other hand, looks like a corporate identity crisis in the making. Its confectionery elements remain only one part – admittedly a very important, unwieldy part – in the portfolio of a maker of groceries and “sweet snacks”.

Is Kraft’s Crunchie approach going flaky?

November 4, 2009

Irene RosenfeldCadbury is not looking such an endangered species after a set of third quarter results from Kraft that failed to wow. Unlike Cadbury’s own sparkling financial performance unveiled the other week. Where was the sucker punch before the knockout blow –  a firm bid on the table by next Monday? Or maybe that was exactly the point: Kraft is seeking to lull Cadbury into a false sense of security before Kraft ceo Irene Rosenfeld delivers the coup de grace. “We remain interested but will maintain a disciplined approach” to the Cadbury bid was her muted gloss on the Q3 results. You bet she remains interested. If she fails to produce a convincing bid, she’ll soon be history. No one at Cadbury is in any doubt that she will deliver.

Cadbury fights for its life

September 7, 2009

CadburyOne of our national treasures looks set to disappear. No, no,no. I am not talking about Sir Tel being replaced at Radio 2 by Chris Evans, but of Cadbury, which faces a £10.2bn hostile bid from Kraft Foods.

The chances of Cadbury retaining its independence after this unwanted intervention do not look good. Of course, it may not be Kraft that emerges the eventual winner. According to City analysts, the Kraft bid – though superficially attractive at a 31% premium to the pre-bid share price – is pitched far too low. What they have in mind is the same multiple that Mars paid for Wrigley last year, which would mean about £10 a share – a long way up from the 745p on the table. Also, only £4.1bn is in cash, so the bid is far from knock-out.

But maybe we’re getting too technical here. Cadbury is definitely in play and Kraft is, at first sight, better positioned to haul the booty away than Nestlé or Hershey. In fact, it cannot afford not to win; neither can its competitors stand idly by and let it. Here is a landscape-changing deal in the offing, which would propel Kraft to the world’s largest confectionery company in an industry where scale is increasingly important (as the Mars deal showed).

Nestlé and Hershey would have considerable problems with the competition authorities (even if they divided the spoils between them), but there are few apparent conflicts of interest affecting a Kraft/Cadbury combo. Kraft, which owns Milka, Terry’s and Toblerone, is strong in confectionery in Europe and Latin America, where Cadbury is weak. Cadbury, on the other hand, offers Kraft a high-growth gum business and exposure in a number of invaluable emerging markets.

Kraft has suggested it will keep the Somerdale factory going, which Cadbury itself is threatening to close. That’s politically astute, but it won’t alter the fact that any alternative Cadbury owner will have to make some medium-term decisions likely to squeeze the culture out of the acquired company. Nestlé did no less when it acquired Rowntree, another Quaker company, over 20 years ago. There will be too many cost synergies involved, debts to be paid off and shareholders appeased, post-deal, for Cadbury culture to be maintained in aspic.

What of the brands? The Cadbury Dairy Milk kids may well twitch their last in one big wide-eyed rictus, which would be a great pity. But, if the Kraft deal does come off, I know someone likely to come out smiling. Kraft places a fair bit of its promotional spend with JWT, which also has a toe-hold in the Cadbury gum business.

And lastly, what of Nestlé? If Kraft triumphs in the takeover battle, that will leave Nestlé’s carefully laid plans for becoming the dominant global confectionery player in tatters. There’s more on this in my column this week.

RB restores lustre to dulled FMCG careers

July 14, 2009

RBReckitt Benckiser is demonstrating its customary approach to risk and innovation with an ambitious corporate marketing communications campaign.

RB has long outperformed its rivals in what to the uninitiated is the dull household sector. With the aid of a clutch of power brands such as Vanish, Cillit Bang, Finish, Nurofen and Clearasil, it regularly bests them on organic growth and profit margins, facts not unnoticed in the City. Not only that, it is virtually the only packaged goods company which continues to beat supermarket own-labels at their own game, proving the consumer will pay a premium for branded goods as long as they are a) better and b) better marketed.

While the RB success story is well rehearsed in the marketing and investment communities it is, I would guess, almost unknown to consumers, who buy solely on the strength of individually marketed products. In this, RB has been missing a trick. And the surprise is, missing it for a long time, considering the trail blazed by the likes of Cadbury or Unilever.

AndraeaThe new global campaign, which is being masterminded by corporate affairs director Andraea Dawson-Shepherd (herself a recruit from Cadbury), sets out to remedy this deficiency in the wake of RB’s corporate rebrand last spring. Handled by Euro RSCG, it is weighted towards building awareness among 22-32 year olds, via social media. But it aims to do a lot more besides.

“Our power brands are already well known,” says Dawson-Shepherd. “We need to make ourselves better known among the next generation of people considering a career in consumer goods and let them know what the company has to offer.” Noting that financial services isn’t the magnet it used to be for ambitious marketers, she hopes to restore the dulled colours of a career in FMCG.

Lateral thinking in the middle of a recession. Size of communications budget almost no object. Now there’s a thing.

Diverted Boulton makes safe landing at Nationwide

July 9, 2009

James BoultonJames Boulton, the ex-HSBC marketing director and brother of Sky TV presenter, Adam, has finally landed at Nationwide after a bizarre mini-Odyssey involving British Airways.

In circumstances still not entirely clear, Boulton seems to have quit HSBC at the beginning of the year in the belief that he had a job in the bag – a good one too – at BA as global marketing director, following in the footsteps of Tiffany Hall.

Only to discover that he did not. Having led him up the garden path, BA either withdrew the offer or halted the process. Boulton had been applying for a job that would no longer exist, due to a management “rationalisation”…

It’s another example of just how ruthless companies have become in slashing key personnel once they are deemed too expensive. Equally unsettling was Cadbury’s recent decision to get rid of its European president, Tamara Minick-Scokalo, only six months after elevating her from group commercial director.

Boulton may not have got the CMO role he was evidently looking for after HSBC declined to expand his duties (I note his successor, Brendan Cook, has been given additional responsibilities – product development and research). But he could have done a lot worse than end up at Nationwide.

In effect, he takes over the high-profile position occupied for many years by Peter Gandolfi, although the title, like much else, is different. Plenty has changed at Nationwide under the leadership of Graham Beale, including most of the key personnel. That’s only to be expected. The sleepy mega-mutual is well positioned (unlike almost any other financial services organisation) to benefit from the Credit Crunch. Big mutuals – friendly, conservative and, above all, reliable (it says in the script) – are back in fashion. And since Nationwide is by far and away the best branded and biggest – at over half the sector’s capitalisation –  it should be able to exploit this new mood much better than anyone else.

Beale has, perhaps justifiably, been whingeing about the ridiculous capital ratios (money kept back as security) being imposed on his organisation (given it is not particularly reliant on the wholesale money market, exposure to which has been a major cause of vulnerability). I notice this has not prevented Nationwide from launching an eye-catching 125% mortgage aimed at attracting people in negative equity who want to move.

Boulton, with his packaged goods skills acquired at Unilever and PepsiCo, has a promising canvas to work on.

Why is the head of Cadbury Europe quitting?

June 30, 2009

Tamara Minick-ScokaloTamara Minick-Scokalo, head of Cadbury Europe, is leaving the company at the end of July. That much we know for a fact. The more interesting question is why.

According to Cadbury ceo Todd Stitzer, the departure is no more than a delayering exercise aimed at surmounting the “cost challenge” belabouring us all in these straitened times. Ignasi Ricou, currently head of Cadbury commercial operations Europe, looks like being the gainer. He will become president while retaining his commercial functions.

But wait a minute, wasn’t Minick-Scokalo Todd’s blue-eyed girl? That’s certainly what the P&G-bred marketing executive was billed as. She joined only two and a half years ago, from Elizabeth Arden, as global commercial chief and was catapulted to president of Europe last January.

It’s strange, even careless, to let your head of Europe go after six months in the post. Perhaps there were personal reasons? Perhaps she wanted to move on? Maybe. In which case it’s a curious coincidence that her departure has been wrapped up in a management reshuffle that also involves the legal department.

At any event, Fallon London (of ‘Gorilla’ and twitching eyebrows fame) should watch its back. She was the agency’s biggest champion.

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