From this week's 'Brand Bulletin' - could this really happen?
It would certainly be welcome!
New Owners for Nestle?
Possible sale sparks mass interest in confectionery industry
Cote D'Or KitKats? It could happen if Nestle go ahead with plans to sell off the confectionery arm of their business, with the Belgian-based chocolate manufacturers poised to make a bid believed to be in the region of 6.45bn.
Since their purchase of Rowntree Mackintosh in 1988, Nestle have become a major player in the worldwide confectionery market, largely thanks to the ongoing success of the KitKat brand. However, the failure of recent high-profile variations on this brand, such as the KitKat Editions range, and the rise of Cadbury's Dairy Milk 'superbrand' have hit the Swiss corporation hard. Add in to that the acrimonious departure of UK CEO Chris White in 2006, and it's perhaps unsurprising that Nestle has been quietly searching for a buyer for its confectionery arm.
While Cadbury and Masterfoods seem like obvious interested parties, it is Cote D'Or, a division of Kraft Foods, emerging as the surprising front-runner. The success of the company's launch in the UK as an 'affordable quality' brand has led to a 37% increase in worldwide profits, with top level management suggesting the acquisition of Nestle confectionery is an ideal way to capitalise on this. The move is also unlikely to meet with opposition from the Monopolies and Mergers Commission; something which would have to be a consideration were either Cadbury or Masterfoods to make a move.
'Gaining control of internationally successfully brands such as KitKat, Aero and Rolos would propel Cote D'Or into a completely different stratosphere', claims industry expert Olaf Riplo. 'It would also give them a foot in the door to the North American market, which is potentially massive'. Crucially however, any deal with Nestle would not give Cote D'Or the right to distribute KitKat in the US, the licence being retained by Hershey under a decades-old agreement with Rowntree Mackintosh.
Cote D'Or has recently increased its visibility in the UK market through their sponsorship of the ITV1 drama series Wild at Heart.
smurfboy2007-04-01 11:52:31
