Big food and drink brands have ruled the roost for many years on supermarket shelves but an increasing number of people have lost their appetite for the established global products. Nowhere has the shift – let’s call it a revolution – been more noticeable than at the global giant Kraft Heinz.
The company’s share price has collapsed in recent weeks as it has dawned on investors that the strategy of believing that big brands are impenetrable is flawed and it has potentially run its course. Kraft Heinz management has previously fuelled share price growth by cutting costs and thereby boosting the profitability of its core brands. This coincided with too little investment in new product development (NPD) and innovation.
Where the company – and others in its league – finds itself is with little opportunity to cut more costs, withering interest in the core product range, and too little of appeal on the NPD runway to entice consumers. What also afflicts large companies is the inability to really think innovatively. The divide between young companies and the massive incumbents is growing and it’s the smaller players that are moving into the driving seat.
Read the full article from the Retail Insider here