A Cadbury insider said, “At that price they can have us. No one can run our business better than us.” And that’s where people start scratching their heads. “Why do the deal?”

Sara Lee is moving into coffee and off-loading non-strategic brands.

The boardrooms of other grocery conglomerates are busy off-loading non-core brands to either raise money for restructuring, or to build a war chest.

But it takes someone like Warren Buffet to make people sit up and stare at the grim face of reality.  The richest investor in the world stated that Kraft had paid too much for Cadbury and that it could potentially cripple the global grocery brand for years to come.

On January 5th Warren Buffett is quoted as saying…

“What we know with certainty…is that Kraft stock, at its current price of $27, is a very expensive ‘currency’ to be used in an acquisition. In 2007, in fact, Kraft spent $3.6 billion to repurchase shares at about $33 per share, presumably because directors and management thought the shares to be worth more.”

As sterling continues to decline on the world currency markets Buffet’s comments only serve to underline his unofficial title as the sage of Omaha. But if we look closer we see that Buffet, through his company Berkshire Hathaway, has invested heavily in Kraft stock, even before the Cadbury acquisition.

Berkshire Hathaway’s Annual Report stated that 130 million plus shares were purchased at a cost of $33.24 each. Buffet’s business partner Munger also invested an additional $300 million in the same year.

The significant investment is Nelson Peltz who bought 3% of Kraft stock when it was IPO’ed from Altria (formerly Philip Morris) in November 2007. It’s believed that Peltz has been setting the agenda for the Kraft acquisitions trail.

What’s surprising is that no one thought that £11.7 billion was too high a price to pay before. The problem the Cadbury board faced at the time of acquisition was this; the price was so good at £11.8 billion that the Cadbury board had no option but to sell. To sweeten the pill for the work force, Prime Minister Gordon Brown stepped in at the last moment to offer a restructuring incentive for Kraft, to preserve UK jobs. Yet more money was thrown at this deal with no visible signs of return.

Ironically Brown’s incentive has quickly unraveled as Kraft seeks to move Cadbury HQ to Chicago and close down a number of UK factories already identified by the Cadbury board for closure.

A Cadbury insider said, “At that price they can have us. No one can run our business better than us.” And that’s where people start scratching their heads. “Why do the deal?”

Recently Sara Lee has sold ‘Ambi Pur’ to Proctor and Gamble for $470 million to compliment P&G’s ‘Febreze’ line (sold mainly in the US). In buying, P&G has boosted its consumer product sales in Europe. This deal is expected to close in Qtr 1 2010

Sara Lee also off-loaded its’ King Cotton’ and ‘Circle b’ brands to Monogram Food Solutions in 2005 along with Sara Lee’s ‘Trail Best Meal’ Snacks plant in 2006.

In the same year Sun Capital bought Sara Lee’s European branded apparel business. This includes such brands as Dim, Playtex, Wonderbra, Lovable, Abanderado, Nur Die, Unno and Bellina. In September 2009 Sara Lee sold its Global Body Care Division to Unilver for a reported €1.275 billion.

In late 2009 speculation mounted that Sara Lee would buy  Maxwell House from Kraft. Despite the price offered by Sara Lee at the end of 2009, Kraft still required $9 bn of institutional funding to meet the Cadbury buy price. This rumour still persists with no deal just yet.

This need by Kraft for more funds allowed Kraft to sell its North American frozen pizza business to Nestlé for $3.7 billion. Brands that moved across include DiGiorno, Tombstone and Jacks brands in the United States, the Delissio brand in Canada and the California Pizza Kitchen trademark licence. It also includes two Wisconsin manufacturing facilities in Medford and Little Chute. The business generated 2009 net revenues of $1.6 billion, with 3,400 employees.

And the financing continues. Recently Coke announced a plan to float the European business on the London Stock Exchange. Recent announcements suggest that investors have identified a number of companies worth backing this year. According to Retail Week these include Carpetright, who wish to expand into Europe, Hobbycraft have put themselves up for sale and Findel are looking to off-load its home shopping brands whilst Next expands into the US.

These second tier investment brings long awaited liquidity to the financial sector and necessary competition to the High Street tenancies. Recent changes in landlord taxation combined with the downturn, has prevented retail tenants from negotiating much needed rental relief. A quick drive down any High Street will tell you this. Shops and businesses have closed or moved into more attractive rental premises, being replaced with ‘To Let’ signs. In a recent survey in The Times, Wolverhampton was the worst performing High Street with 45% of retail property vacant.

This picture is being repeated across most European and US cities and towns as consumers save their cash. For everyone liquidity is the name of the game. The financial markets are still crippled and will be for some time to come. Those individuals and institutions with cash can pick up some real bargains, whilst those with debts have little control over the future. Savings and investments are not providing the returns and yet the US output is growing at 5.8% as quoted by the Federal Reserve on Friday 26th February 2010.

It has been said that ‘sentiment doesn’t play a large role in business and when it does its time to sell the business.’ Those of us who believe iconic brands are immune from global market stresses are in for a rude awakening. The UK is up for sale.

This week Kettle crisps were sold to US company Diamond Foods for £400m. Previously owned by Lion Capital, Kettle Crisps have a UK manufacturing plant based in Norwich. Cable and Wireless are due to split in two next week as the parent organisation removes its loss-making UK arm from the more profitable overseas unit. The weak pound, unprecedented debt, reduced tax receipts and increasing unemployment leads us into the unenviable place of having a garage sale or three.

With over 30% of our workforce now employed in the public sector (CBI data) UK Plc has few options left but to trim that wage bill. Strikes at BA and the Post Office only confirm what the rest of the working population already knows. Systemic union militancy on previously nationalised businesses is still endemic. Brand UK suffers from overseas investment the more headline grabbing strikes we have. The UK worker has a fistful of European legislation with which to fight unreasonable and demanding employees. You only have to look at the fines imposed on Siemens, our Armed Services and Fiat to understand the extent that the European Directive has on our working conditions today.

Business has to evolve to survive and with that comes job losses and job opportunity. Opportunity is always Government led, through advantageous tax regimes, workforce education and deregulation. The UK created two of the most successful companies to emerge in the last 25 years, namely O2 and Vodafone. Both were born out of the deregulation of the radio frequency spectrum, previously used exclusively for the military. What impact have they had on our High Street, rents and GDP? How much did these companies pay the Exchequer for the 3G licences in the late 1990s?

As our tax regime becomes more punitive companies like Vodafone and O2 will not start up. WPP, the world’s largest advertising agency and British, has moved HQs to Ireland and more are expected to follow to avoid paying tax. Now whilst this might be morally wrong, it is legitimate and reduces the tax receipts paid to the Chancellor. Profits made by O2 now go to Telefonica, O2’s parent company, who are based in Spain. The Spanish taxpayer now benefits from O2’s profits not the UK. The same can now be said of Cadbury.

We need a strong banking system to help us grow our economy. Mergers and Acquisitions are good as they stimulate this sector. However bonus regulation may invite another tranche of successful UK companies to move abroad.

These headline acquisitions therefore underpins the investment opportunities for hedge funds and institutional investors such as Berkshire Hathaway in the global Grocery business. By stimulating the dormant M&A and IPO markets money starts to be released as the world slowly creeps out of one of the world’s worst recessions in generations.

Those organisations with large debt mountains are selling to pare down the debt, whilst those with limited debt are selling to move into more lucrative markets. Other global organisations are buying to consolidate their position, as in the case of Kraft, Nestlé, P&G and Unilever, whilst disinvesting themselves of brands that are no longer required.

CategoryVision.com has one simple aim: to be the source for consumer news analysis for senior executives creating, leading and transforming the category function.

CategoryVision.com has one simple aim: to be the source for consumer news analysis for senior executives creating, leading and transforming the category function. Each week we review consumer news from around the world and analyse the impact this will have on the shopper.  We trend forward, the impact mergers and acquisitions of household names will have upon buyer behaviour in the short medium and long term, and we address the need for manufacturers to revitalise brand, market place and supply chain to maximise product growth.

Features, news and views are provided as ‘think pieces’. Where possible we look at events through the eyes of the shopper. We provide insight on how the customer will view a category, what the buyer drivers are and where the proposition sits on the shelf.

Finally we review the tools plans and tactics used by the category teams to meet the shopper needs and we assess the impact technology, finance and people development can have on meeting the category objective.

Please enjoy this and don’t hesitate to tell us what we need to add and improve.

Regards

David Edwards

Editor

I was invited along to one of these sessions to observe and contribute. The first departure from the norm was to see my friend open up the meeting with a summary of company performance and an assessment of his own performance across the month. This included where he had ‘dropped the ball’ and where he thought he had ‘saved the day’ or where when he knew he was on the ‘hot spot’

One of the issues with teamwork is that it means many things to different people.  A very good friend of mine who is highly successful believes that teams are best left on the sports field.  He believes very strongly that clear leadership combined with a huge infusion of savvy is all you need to be successful.

On closer examination you discover that his employees work in small focussed groups with each group interdependent upon each other.  Each week he briefs his team leaders on priorities, responsibilities and objectives.  He allows no time for discussion and builds his success around clear command and control behaviours.

However, each month he steps away from his usual weekly behaviours, and invites his team leaders to attend the meeting in a local hotel, where he facilitates a root and branch feedback session on orders, accounts and pipeline.  Production, distribution, sales, marketing, accounts and operations all discuss the disconnect, that invariably occur within any month of business.

And here is the first key to his success – continuous improvement and the removal of blame culture.

I was invited along to one of these sessions to observe and contribute.  The first departure from the norm was to see my friend open up the meeting with a summary of company performance and an assessment of his own performance across the month.  This included where he had ‘dropped the ball’ and where he thought he had ‘saved the day’, or when he knew he was on the ‘hot spot.’

Each one of these three areas had three entries and each section was brainstormed by the whole team for five minutes, all outcomes were noted and the process moved on to the next team leader.  With 12 team leaders this process started at 8am and finished at 2pm, a working lunch was provided, and no drinks breaks were  allowed.  Toilet breaks were taken at will and all phones, BlackBerrys and computers were banned.  No interruptions were allowed.

By 2pm the outcomes had been pinned around the room and for the next two hours fluid assessments were agreed and solutions found.  The meeting breaks at 4pm sharp.  This happens every month with participants working with each other to find results.  The team has been together for over 5 years and demonstrates a deep respect for each other that permeates across the whole company.

As this process has grown, trust and team spirit has evolved alongside it.  These meetings have developed into a morning’s work, as team leaders develop solutions on the fly.  These are then presented in the ‘saved the day’ slot – and the ‘penalty’ and ‘dropped the ball’ slots are invariably empty.

The afternoon is then spent either with the family or doing what they want.  No one is allowed back into the business until 8am the next day.

The irony is that my friend, who doesn’t believe in team ethics, drives a very successful team-orientated business.  The difference is that he does run a fat structure, a hierarchical business and he has a passionate disbelief in management by committee.

The idea of the team ‘hot spot’ is to flag up clients who are exhibiting behaviours of distress.  Once the team agrees the client’s status, the client is transferred to the incubation team who take full responsibility to bring the client back to full corporate health.  The client is eventually taken back by the original team and the new behaviours fully engaged.

To me, my friend has evolved a system of ‘concierge teams that dominate the organisation.’

One of the issues with teamwork is that it means many things to different people. A very good friend of mine who is highly successful believes that teams are best left on the sports field. He believes very strongly that clear leadership combined with a huge infusion of savvy is all you need to be successful.

On closer examination you discover that his employees work in small focussed groups with each group interdependent upon each other. Each week he briefs his team leaders on priorities, responsibilities and objectives. He allows no time for discussion and builds his success around clear command and control behaviours.

However, each month he steps away from his usual weekly behaviours, and invites his team leader to attend the meeting in a local hotel, where he facilitates a root and branch feedback session on orders, accounts and pipeline. Production, distribution, sales, marketing, accounts and operations all discuss the disconnect that invariable occur within any month of business.

And here is the first key to his success – continuous improvement and the removal of blame culture.

I was invited along to one of these sessions to observe and contribute. The first departure from the norm was to see my friend open up the meeting with a summary of company performance and an assessment of his own performance across the month. This included where he had ‘dropped the ball’ and where he thought he had ‘saved the day’ or where when he knew he was on the ‘hot spot’

Each one of these three areas had three entries and each section was brain stormed by the whole team for five minutes, all outcomes were noted and the process moved on the next team leader. With 12 team leaders this process started at 8am and finished at 2pm, a working lunch was provided, and no drinks breaks were provided. Toilet breaks were taken at will and all phones, Blackberry’s and computer were banned. No interruptions were allowed.

By 2pm the outcomes had been pinned around the room and for the next two hours fluid assessments were agreed and solutions found. The meeting breaks at 4pm sharp. This happens every month with participants working with each other to find results. The team has been together for over 5 years and demonstrate a deep respect for each other that permeateswith a deep respect working across the whole company.

As this process has grown and trust and team spirit has evolve alongside it.s, These meetings have developed into a mornings work, as team leaders develop solutions on the fly. These are then presented in the ‘saved the day’ slot – and the” penalty” and “dropped the ball” slots are invariably empty.

The afternoon is then spent either with the family or doing what they want. No one is allowed back into the business until 8am the next day.

The irony is that my friend who doesn’t believe in team ethic drives a very successful team orientated business. The difference is that he does run a fat structure, a hieratical business, and he has a passionate disbelief in management by committee.

The idea of the team ‘hot spot’ is to flag up clients who are exhibiting behaviours of distress. Once the team agrees the client status, the client is transferred to the incubation team who take full responsibility to bring the client back to full corporate health. The client is eventually taken back by the original team and new behaviours fully engaged.

To me, my friend has evolved a system of ‘concierge teams that dominate the organisation’*. Groups of customers are assigned to teams who manage the client for life. Customers are identified by segment, behaviour or with customers with certain quintile value or frequency of involvement with the corporation.

He does question the price of success, when the only decision that can be made by the CEO after the 6 month strategic review, and the 3 months of re-organisation that will inevitably take place, is what car the CEO orders. You see the 24 month CEO has it down to a fine art. That Harvard degree wasn’t a total waste of time, just ask Jo. The 24 months CEO strategise and re-organises for 12 months and watches his plan fail over the next 12 months.

Danny had worked hard to develop the middle class American accent of an educated man, and had erased the Bronx slang. He had married Sammy, a fine girl from Up State New York and had the type of life Jo could only dream of. Over the years Danny had learnt to adapt his behaviour to any given situation.

Jo is a retired mail man having worked in the mail room at ABC inc for over 30 years. Jo has seen it all before, and wonders why nobody sees the difference. This extract has Jo greeting his nephew Danny just after his last day at ABC Inc.

That evening Jo watched the usual Monday night ball game. The Cincinnatti Bengals were loosing to the Seattle Seahawks 23 -15 in the third quarter when Danny Jo’s nephew dropped by.

Jo had got Danny his job at ABC Ltd after he had graduated from NYC and each year Jo had seen Danny’s career progress, by the mail Jo had filed for Danny in the mail room. Being a mail man at ABC Inc had its advantages.

“Hey Uncle Jo, you well?” said the 35 year old Vice President of Global Operations, as Jo opened the door to his small apartment for his nephew.

“Danny how you doing?” replied Jo in that deep bronx accent that was so loved by the New York blue collar workers. Uptown America referred to the NY accent as the ‘does and dare’ This was a reference to the ‘th’ being replaced with the ‘d’ so ‘those over there’ became ‘d’oes over d’are”

Danny had worked hard to develop the middle class American accent of an educated man, and had erased the bronx slang. He had married Sammy, a fine girl from Up State New York and had the type of life Jo could only dream of. Over the years Danny had learnt to adapt his behaviour to any given situation.

Apart from his education, this ability had allowed him the advance quickly in ABC Inc. With his business degree, Danny joined as a junior in sales and quickly excelled and two things: beating his targets and working with his managers.

Jo often felt that Danny tried to hard to please and that someday he would loose momentum. That day had come when Danny had to decide whether to provide everyone in his department a performance package. This initiative was sponsored by the board of ABC Inc and was accepted positively by Danny’s team of 2000. This team operated not only in the States, but also Europe and the Middle East. Each region applauded the new initiative, even before people had had time to read detail, Jo thought.

But the plan went ahead. Everyone was targeted, incentivised and measured. Each month Jo would ask the same question as he filed the pay-check for the Xerox boy. ‘How do you incentivise someone for copying documents?” Danny had found a way and each quarter the Xerox boy got an additional blue envelope. The problem was that everyone in Danny’s team got the same blue coloured envelope every quarter.

In time the bonus envelope became an expected ‘reward’ and productivity started to fall off. Each month employees and managers alike found new and inventive ways to ensure that bonus’s were paid. And each quarter the profits of ABC Inc declined.

“This pay scheme encourages people to create targets and measures for jobs that can not be measured” thought Jo, every time he filed the pay cheques.

As Jo welcomed Danny into his apartment, he remembered what Stanley had said when Jo joined ABC Inc after leaving the army.

‘Son’ he said ‘as an inventory man and a Vietnam vet you have had a target and been a target all your adult life. Here at ABC Inc the only target we care about is the customers that we sell to. They are our targets now. The more customers we have the stronger we will be”

In the background Jo listened to Dylan’s words ‘ Times they are a changing”

So what of these questions? They consisted of various opposites including “Summer or Winter? Or Book or TV” Different questions were posted on LinkedIn each day over a 30 day period. We expected little but we were surprised. Those who answered had various profiles and the responses were wide ranging, some were controversial in places, but above all were thought provoking.

Recently on Linked In we asked a series of questions relating to partnership or pairs. Like most relationships we were intrigued with the notion that opposites attract. We started with simple phrases, allowing people to respond to the word or phrase they preferred. We recognised that Linked In as a closed group, and the responses were those who chose to answer these curious set of questions.

So what of these questions? They consisted of various opposites including “Summer or Winter? Or Book or TV” Different questions were posted on LinkedIn each day over a 30 day period. We expected little but we were surprised. Those who answered had various profiles and the responses were wide ranging, some were controversial in places, but above all were thought provoking.

When we analysed the results we quickly realised, we needed to develop a sampling model that was more encompassing, that had a wider reach and that utilised a more credible methodology. You can participate in our new questionnaire here.

We focussed on popular culture, ranging from rock bands, through movies technology to lifestyle. Questions included – Stones or Beatles? Bill or Mac? Snow or sun?

So back to the questions polled. Another thread quickly emerged, as we tried to increase the momentum of questions supplied. Namely the understanding that people had for the perceived good over bad. It is often anticipated that in times of economic down turn the majority of respondents choose safe and traditional answers. E.g. more people chose the Beatles than the Stones. However we also realised that people also challenged the norm depending on brand recognition. Apple over PC? Apple tended to be favoured. Summer vs Snow – people chose snow.

What else did our survey tell us? We learnt that people instinctively recognised the value of team. When asked about Lennon or McCartney people still preferred the collective talents of the Beatles and McCartney over Lennon? Although the iconic songs remained with Lennon.

Maybe the Stones remain top of the Pops because the team of Jagger and Richards play to each others strengths. Break the team up like Lennon and McCartney and the individual parts do not out perform the sum of the parts.

So maybe the conclusion is that employers need to think long and hard before teams are broken up to save costs. To do so may lead to irreconcilable differences

Now as a bloke I started a spreadsheet – for my wife all this was in her head. I

Now I don’t know about anyone else but I quite fancy myself in the kitchen.  I enjoy the creating, but hate the washing up afterwards.  So I am always looking for ways to reduce the pain of the post-cooking tidy up.

The other thing you need to know about me is that I love John Lewis Partnership – more specifically the Audio and Kitchen departments.  The answer is obvious, it’s the gadgets.  Just love the gadgets.  It’s the only way my wife will go shopping with me.  I am deposited in either department and told not to spend anything.

That’s hard isn’t it?  But I have satiated my desire for everything Audio and have now turned my attention to everything Kitchen.  I am looking to find tools or gadgets that save preparation time or washing up time.

So what do I need?  A kettle to boil water, obviously, but it’s got to get past the ‘wife’ test. i.e. it has to be matching, functional and reliable.  Simple you would think – but for those in the know – this is not as easy as it may seem.

How much do you pay?  What do you want it to do?   Boiling water is not as easy as you may first think.  Does the kettle have to be automatic, cordless, metal chrome or silver plastic?  Black, pink, green, red or blue?  What brand do we like, aspire to or expect?  Do we want the design to be retro or modern?  How will we fill it and where will we fill it from?  Do we want a built-in water purifier, and, if we live in a hard water area, how long will it be before we have to de-scale it?  Therefore what kettles are compatible with what de-scaling products?

Now, as a bloke I started a spreadsheet however, for my wife all this was in her head.  I was being very scientific and as objective as the analysis would allow.  After many hours of research I concluded that the kettle my wife had selected in John Lewis, 2 weeks previously, was the same as the one my spreadsheet had chosen.

Rule 1: Women are always right (unless they are multi-tasking of course)!

This exercise got me thinking – what time saving devices do we have and why?  Here is a selection:

• Toaster Dualit – has been replaced twice in 18 months.  6/10

• Kettle Morphy Richards – perfect.  9/10

• Coffee Maker Nespresso – fantastic but the coffee has to be bought on-line.  4/10

• Ice Cream Maker Magimix – used 3 times – pointless.   Too much faff.   3/10

• Pasta Maker Jamie Oliver – one failed attempt.  0/10

• Cooker Britannia – 2 cookers and 6 rings – why?  5/10

• Slow cooker Slo Cook Used 3 times – just use a saucepan.  5/10

• Sandwich maker Tefal – simple.  8/10

• Electric Grill George Foreman – bought and binned.  0/10

I am sure that kitchen manufacturers are colluding with the fashionista buyers of kitchenware who demand more kitchen storage.  Tupperware falls into this bracket.  We have yards of the stuff.

Best device so far is the kitchenette blender.  The design is suitably retro and the speed, function and noise is understated.  I am sure we all have similar stories of ‘must-have gadgets’ that never see the light of day.

I know that we, the shallow shopper, only have ourselves to blame, but the books – where did they come from?  Just look around your kitchen and ask yourself, where did that cookery bookshelf come from?  How did it get there and where did all those celebrity chef cookery books come from?

Then ask yourself, when did you last cook from the ingredients upwards?  I ask this as I make a Spaghetti Bolognese, using my Paul Newman sauce, Napolina spaghetti and organic Waitrose mince.

Utensils used include: two wooden spoons, two saucepans and 4 kettles of hot water, bread from the supermarket and a lovely bottle of fridge cold Montana Rose.

Now that’s cooking, man-style!

It is widely considered that diversity is about increasing racial, national, gender or class representation, by recruiting members from the traditionally under represented ‘identity groups’. But recent studies indicate that this is a flawed assumption. Recruiting ‘traditional' identity groups provided inhibited effectiveness.

We make no apology for this article in light of the recent national debate on ethnicity.

In our enlightened society we support the notion of cultural diversity as a way to enhance performance, understanding and integration, all practical traits of team work.  Many managers have approached the issue of diversity from the basis that discrimination is wrong.

This has extended itself across, not just racial boundaries, but sexual discrimination, ageism as well. Even now less enlightened organisations are selecting on the grounds of health or more directly ’subjective perceptions of obesity’.
If this underground fashion of sizism, moves from the fringe to the mainstream, where will that morally put the manufacturers of foods that maybe perceived to be promoting ‘unhealthy foods’ or ‘ who are actively encouraging the next generation to play roulette with the national health service’.

If you are a smoker today you are found outside offices in all weathers, if you enjoy a drink this is becoming fround upon. Should you be a banker as well as a smoker and drinker you are now held in the same regard as a murderer. Is this right? We all make choices but now it seems that society is making those choices for us.

Generally the law makers have got it right with discrimination and ethnicity. But is our society interpreting the laws of th land sympathetically or pragamatically?

It is well documented that the more diverse the workforce the greater the access to new segments in the market place, enhanced productivity and increased morale. It has been a long term belief that diversity is good for business.

This is at the heart of success, but we can find little evidence that businesses are embracing this widely held view. Where are the positive impacts of diversity in corporate UK. Where are the women C.E.O’s, the disabled M.Ds or the African Caribbean Directors. In the last 20 years numerous and varied initiatives have been introduced to increase diversity in the corporate work place. But despite this, there have been few if any remarkable leaps in organisational effectiveness. Indeed it could be argued that many attempts to increase diversity have backfired, sometimes even heightening tensions among employees and hindering company performance.

It is widely considered that diversity is about increasing racial, national,  gender or class representation, by recruiting members from the traditionally under represented ‘identity groups’. But recent studies indicate that this is a flawed assumption. Recruiting ‘traditional’ identity groups provided inhibited effectiveness.

Organisations expect women and people of colour to blend in. That is ‘Approach No1′. Approach No 2 sees companies assigning these groups to jobs that relate specifically to their backgrounds. In the USA, African American M.B.A’s often found themselves marketing products to inner city communities; Hispanics frequently market to Hispanics of Latin American subsidiaries. In this situation companies are making an assumptive virtue of the knowledge the employee has of the desigated identity group. Is this authentic?

Diversity isn’t about quota. Its about understanding varied perspectives and approaches to work that members of different identity groups bring.

So as margins get tighter and markets continue to decline, is now the time for food manufacturers to focus on the specialist markets?  By developing strategies, tactics and tools that provide an authentic understanding of the numerous identity groups that make decisions at the point of purchase can brands become more authentic?

Our supermarket shelves are full of blended mass produced vertical market offerings. The assumption is that its all about price at the expenses of quality. We would argue that its about quality and breadth of offering. Our goal is to to help business leaders see what their own approach to diversity currently is, and how it may already have influenced their companies diversity efforts.

Women, African Caribbeans, Disabled (in all its forms), Asian British and Europeans, don’t bring with them their ‘insider information’. They bring alternative , important and competitively relevant knowledge and perspectives about the work place that translates into authentic buying decisions on the High Street. Society is developing informed products for the ‘Pink’ market, but what about the others.

Is it not time that we looked at niche marketing more holistically. When companies start thinking about diversity as providing a fresh and meaningful approach to purchasing, and stop assuming that diversity relates simply to how a person looks or where he or she comes from, will they be able to reap its full rewards.

By this time the consumer was burnt out and so were the corporates. It was all too confusing and the markets were changing too quickly.

A TV programme last night summarised branding as a promise, an experience and a memory. I was initially impressed with the clarity of this sound bite until I thought about all those products that showed immense promise, delivered a fantastic experience and left me with wonderful memories.  Like a new exercise regime, the latest “must have” electronic gadget or a very entertaining event, and still they failed.  Then there are those products that only partly deliver on these three cornerstones… and become mega brands.

It could be said that brands have to grow with the aspirations of the end consumer, but experience tells us otherwise.

In the mobile market space there is one clear winner in the UK market at the moment and that is O₂.  They were until recently the market leader having bought the iPhone to the UK consumer, on the back of the Apple marketing machine.  The iPhone continues to deliver a great user experience and remains the brand of choice with which to be seen.

BlackBerry had dominated this market for years and was sold as the product of choice for the hard working global executive.  It instantly alienated itself from the largest part of the mobile market place, namely the ‘kid in the street’.  They didn’t want to be seen with a phone their parents used 24/7.  They wanted their own.

But the BlackBerry offered the global warrior the experience, always delivered on the promise and offered great memories of receiving that critical piece of information that saved the day.  It was a ‘white knight’ product.  The corporate world lapped it up, and even Presidents decided they could not be without it.

So the fashionable teenagers spent most of their time using iPods and Sony phones.  They were the fashionable ‘tools’ to have.  And this is where the iPhone was born.  Integrating the iPod to the mobile phone closed the gap for the high street consumer. Ask any network provider such as T-Mobile, O₂, Vodafone, 3, or Orange and they will all tell you that the high street consumer accounts for approximately 66% of the connections and turnover.  The problem with the consumer is that we are fickle.  We always want more for our money and we do not want to be seen with last year’s mobile phone.  The mobile phone has become a fashionable necessity.

To counteract this, the mobile network providers sold to the corporate space, offering 3 – 5 year contracts with fixed line rental, accessories and single billing.  The maths in the deal became the key differential for the network.  The more connections offered the better the discount.  At one point mobile phone operators were providing zero connection charge for 1000 connections, whilst the corporate customer only wanted an 18 month to 3 year deal. Now the operators had a problem.  Premium pricing had ceased to exist in both markets and profits were due to head south.

Territory acquisition became the order of the day.  Moving firstly into Europe, then the US, quickly followed by Africa, India and China allowed the networks to show growth by using the ‘war chests’ accumulated in the 80’s and 90’s.

At the same time the offering changed as 3G data networks were invested in, with huge amounts of money being given to the UK treasury for the 3G licence.  This investment was never to be recovered, as the roll-out programme was too slow and technology took over. Within 5 years wireless networks and Skype were eating into the ROI models of the 3G licence for all the network providers.

In that time handsets hadn’t moved on.  The two global market leaders, Motorola and Nokia had lost their way.  They were being chased by Sony, Samsung. Toshiba, Panasonic and many more.  So consumer confusion reigned.  As the network providers expanded into new territories, new billing systems confused the consumer further.  It became a standing joke that every time you went abroad not only did you spend the rest of the year paying for the holiday in Crete but you also had to do the same with your telephone bill.  And you never knew what the final cost was going to be until 3 months after you got home.  All networks had the same problem, separate billing systems and currency changes proved impossible to monitor accurately.

So to remain ahead of the consumer, the networks adopted a system of confusion marketing. Retail outlets popped up all over the place.  Each one had a different offering.  The consumer was sold ‘choice’ but in reality it was confusion.  Different tariffs, many handset options, connection charges and contract lengths were offered at the point of purchase.

And in all this confusion, the network operator profits increased, the number of connections increased and texting became the application of choice.  Texting was a ‘mistake technology’.  None of the network operators realised it existed until text traffic started to impact upon revenues and network performance.  So the consumer had to pay.  This opened the network up to another revenue stream, video and data transmission.  Vast sums were invested to find the next ‘killer mobile app’, Sky on your mobile or video conferencing on the handset. But the networks were too greedy and Skype already did that. And why would anyone want to watch TV on a small mobile screen?

By this time the consumer was burnt out and so were the corporates.  It was all too confusing and the markets were changing too quickly.

In that period some networks remained fiercely independent but forgot about the consumer experience in the process.  Others merged with European Telecommunication Operators and re-established its relationship with the High Street Consumer.  There were new entrants and recently a huge merger, which joins the commercial flexibility of T-Mobile with the infrastructure of Orange.

Apple exploited the gap, producing the iPhone for TV, movies, phone apps and a lot more besides.  The market changed as the handset became the consumer driver not the network of the tariff.

Vodafone remains independent, has a deep ‘war chest’ and manages itself as a global mobile operator.

O₂ is the operator who stands to lose the most over the next 12 months as Apple opens up the distribution of the iPhone.  What has been exclusive to O₂ will be marketed by Orange and Vodafone from 2010.

But what of the consumer?  Who has the power?  The consumer with the help of the EU is getting back some control.  But for now the handset manufacturers are coming back.  This year will see the launch of 5 handset platforms in the UK alone, all with the killer app – the application suite carved out by the Apple iPhone.  Nokia, BlackBerry, Sony, Apple and Motorola will give more feature rich content to the users than could possibly be required.  But when one developer can make £150,000 over three years by developing one application for the iPhone, you can see where the next gold rush will be.

And that’s good for the consumer and may finally give the networks the wake-up call they need to provide a better experience and deliver on those promises to give us all better memories than we have had so far.

Are the opportunistic mergers and acquisitions that we have seen in the retail sector over recent months becoming a business trend?

Stanley and Black & Decker are seeking shareholder approval to merge.  Kraft have agreed terms with Cadbury and Sainsbury’s are being courted by the Dubai Investments once again.  On the surface it seems as if the last 24 months were just a dream.  But scratch deeper and this activity could indicate the demand by the markets to reduce operating costs, whilst developing new markets, with the Stanley B&D announcement supporting this belief.

Twenty four months ago M&A activity in this sector was driven primarily by the demand for consumer reach.  Now that the consumer has become dormant M&A activity is based on complimentary acquisitions that extends consumer reach, whilst consolidating the competition in the market place.  The other factor is that sterling is cheap, making overseas interest in the UK companies very attractive.

But what of the large majority of companies we find on our High Street, not owned by shareholders?  Companies such as United Biscuits, Premier Brands and Fat Face; how are these companies performing in today’s recession hit market?  In truth we don’t know, the only time we know the true value is when these companies are sold.

But what we can look for are companies with a confused message on the High Street and my one to watch over the next 12 months is Fat Face.  When did such a focussed, intelligent and authentic brand become so confused?  Do the urbanites who buy Fat Face really require a foldaway dog bowl?  Do the extreme sport enthusiasts Fat Face aspire to impress really need expensive ‘T’s’ and jumpers that either shrink or stretch after one or two washes?  These were never the authentic attributes of the original brand values.  But over time the core of the product seems to have been replaced with clothing that appeals to a sector of the market that is being hardest hit by this recession namely the 15 – 25 age group.

If I look at White Stuff, Weird Fish and Crew products they seem to have wider appeal and they attract a cross section of buyers who want authenticity.  They know what these brands stand for. It’s a shame that the same cannot be said of Fat Face.  As with any private equity backed company, (Fat Face is one), without people entering the shops, there is little chance of people spending.  This can only go on for a short period before the stakeholders in the business start to question the validity of the original investment.  Fat Face opened new stores across the UK just before the recession really hit consumers’ pockets.

The number of High Street businesses struggling to pay the rent has been a major factor in a number of recent collapses.  Just look at Threshers, but don’t forget MFI.  The question being asked by some industry pundits is, ‘How long will it be before Fat Face has to restructure?’