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Jamie Oliver – the ingredient brand that became the whole meal

July 14, 2011

So farewell, Sainsbury brand ambassador Jamie Oliver. You were the exception that proves the rule – the celebrity endorser untouched by scandal or degrading personal conduct. The ultimate ingredient brand that spiced up Sainsbury’s fare without overcooking it.

Oliver’s uncompromising stand on food and animal welfare gave Sainsbury’s brand an unimpeachable wholesomeness at a time when its reputation and performance were being winded in the solar plexus by Tesco and Asda. Like all such felicitious relationships, an element of luck was involved. Right at the beginning of his tenure in 2004, chief executive Justin King was advised to drop Oliver from the advertising (agency, AMV BBDO), on the grounds that his reputation was overexposed and past its sell-by date. How wrong that judgement was, and how wise King to ignore it. One year later, Oliver was leading the charge as the great white knight of children’s healthy nutrition in the School Dinners TV series.

There was, of course, rather more to the success of the 11-year marriage than Jamie’s teflon-coated moral demeanour. In truth Oliver’s crusading fervour could be very trying; several times, he seems to have entirely forgotten who was paying £1m a year into his bank account for services rendered.

Five years ago, King must have been sorely tempted to fire Oliver when he condemned parents for putting junk food (for which read typical Sainsbury products) into children’s lunchboxes. Two years later, Oliver drew even closer to the line when he very publicly condemned Sainsbury’s refusal to take part in a television debate on battery-farmed chickens during his programme Jamie’s Fowl Dinners.

To the credit of both parties they twice pulled back from the brink, rightly judging the overall benefits of the relationship to be more important than the occasional tiff.

However wayward Oliver can be, it’s worth reflecting for a minute on what he is not: Marco Pierre White. MPW epitomises the once great chef whose celebrity has fallen on hard times. Seemingly, no brand endorsement is anathema –  Knorr and Bernard Matthews spring to mind – so long as it fends off the next alimony demand.

With Oliver, the problem is the polar opposite. His brand value has waxed to the extent that it now threatens to eclipse that of the product he is endorsing. Analysts were quick to point out that Oliver’s latest book – 30 Minute Meals, the fastest selling non-fiction book of all time – played a major role in boosting Sainsbury sales by over 10% last Christmas. No doubt, but the ingredient has now become the meal and it’s time to move on – for both parties.

None of this detracts from the Oliver/Sainsbury partnership being one of the most successful endorsement relationships of all time. As a brand ambassador only Gary Lineker – who began fronting Walkers ads in 1995 and continues to do so to this day – bears comparison.

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Can we bank on Hornby to put some welly back into Boots?

June 8, 2009

Andy HornbySo, it’s back to the track for one of Leighton’s Lads. The surprise, given his identity, is that he has been rehabilitated so early.

Yes, step forward Andy Hornby, who is to be the next chief executive of Alliance Boots, after a gap of two years. Oxford-educated Hornby was one of Harvard Business School’s most brilliant alumni, passing out first in his year. His gilded career was capped  – he and many others supposed – when, at 39, he was appointed the youngest-ever ceo of a major bank. The trouble being that bank was HBOS. It is now apparent that Hornby was in over his head. Excellent, as his track record would suggest, at the retail side of banking, he either failed to notice or simply didn’t care enough about the near-criminal risk-taking on the commercial-lending side that helped to bring the bank down. Maybe his predecessor, Sir James Crosby, was ultimately culpable, but it was on Hornby’s watch that it all went so dreadfully wrong.

So, why Alliance Boots? As I said, retail is really Hornby’s thing. He was in his element as a thrusting subaltern at Asda under the leadership of Allan Leighton during the nineties. Hornby proved a more-than-competent manager as head of retail and md of the fashion unit, George. Among his illustrious colleagues at the time were Justin King, now ceo of Sainsbury, and Richard Baker, later ceo of Boots (prior to its Alliance Unichem merger).

Ordinarily, Hornby would not even be considered for such a high profile position as the one at Boots, given the seismic fallout in the City created by his HBOS tenure. But Alliance Boots is not some run-of-the-mill FTSE 100 company; in fact it isn’t publicly quoted at all, being in the hands of a private equity consortium financed by KKR and run by maverick Italian entrepreneur Stefano Pessina. Pessina has obviously made a judgement that the need to recruit top retail-bred management skills far outweighs the risk of having to go to the City, cap in hand, for more funding. It’s a mature judgement at that: Hornby had already been considered for the job, ahead of Baker, when his star was in the ascendant as chief operating officer of HBOS in 2003.

Boots  itself has held up reasonably well during the recession, thanks in part to a strong performance from its cosmetics portfolio. But it labours under a tower of debt – the present management team having pulled off the biggest leveraged buyout in Europe right at the top of the bull market.

Worse, Boots’ strategic path is unclear. It is gradually, but inexorably, losing ground to the supermarket majors as a retail brand. Successive management teams have failed to unlock a convincing new rationale. Personally, I’m glad Hornby has landed the job. He’s certainly got something to prove, and that can only be good for Boots.


The greening of chief executives

June 1, 2009

Sir Terry LeahyIt was to have been Sir Tel’s big week. Ahead of a ground-breaking speech at the London School of Economics advertising Tesco’s wholehearted commitment to green innovation, its chief executive had lined up a couple of showcase initiatives.

First up is the trial of electric-car charging facilities, and shortly afterwards Tesco will announce that it is building ‘the world’s first zero-carbon store’ in Cambridgeshire.

Then along comes Greenpeace and pours acid rain on Leahy’s parade with a report insinuating that Tesco, and numerous other famous brands, have been encouraging illegal destruction of the Amazon rainforest by sourcing their meat from unscrupulous ranchers who have systematically climate-raped the region.

Leahy’s predicament is typical of that facing many chief executives of major brands. How do you reconcile the provision of value for money with the broader communitarian needs of your customers – and not find yourself in the dock accused of hypocrisy?

The answer, if you are a progressive business leader, is that sometimes you cannot. But many judge the risk well worth taking; indeed they believe they have no real alternative but to embrace sustainability as an integral part of their corporate social responsibility programme. Despite the fact that it may consume a considerable part of their management time; and sometimes turn them, reluctantly, into figures of controversy.

That’s why a number of leading UK businessmen – among them James Murdoch, Justin King of Sainsbury, Ian Cheshire of Kingfisher, and Carphone Warehouse’s Charles Dunstone – recently wrote a letter to The Times openly proclaiming their opposition to Government plans for a third runway at Heathrow. Even though the project might, in the short term, create new jobs; even though their opposition also brought them into conflict with their natural constituencies at the Confederation of British Industry and the British Chambers of Commerce.

Mostly, however, espousing the cause of sustainability is a lot less controversial. Last week, for example, Cheshire helped to launch Eat Seasonably, an initiative aimed at persuading people to eat fruit and vegetables at their “seasonal best”. It’s the first leg of a two-year programme masterminded by himself and National Trust director-general Dame Fiona Reynolds which, with the backing of both Government and non-governmental organisations, will focus not simply on the food we eat, but the way we run our homes, what we throw away, what we buy and how we use transport.

I asked Cheshire why he was prepared to make such a commitment to the cause. And how he found the time to do it, on top of running a FTSE 100 company.

More in the column this week.


Is Sainsbury’s King’s crowning achievement?

May 19, 2009

 

Justin time?

Justin time?

Another set of dreadful results from Marks & Spencer: annual pre-tax profits down nearly 40%, and the dividend sliced by a third.

Could anyone else, in the circumstances, be doing a better job than executive chairman and retail doyen Sir Stuart Rose, who must shortly retire from M&S? Headhunters are actively putting together a list of potential successors. Strongly favoured is Justin King, who has turned around the once-hopeless case of Sainsbury’s. King says he’s not for sale, at the moment. All the same, he’s beginning to look like the uncrowned monarch of British retail.

More on King’s reputation in this week’s column, out tomorrow.


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