Many in the industry will have seen Nestlé Rowntree’s problems coming from a long way off (MW last week). Obviously many factors are in play.
First, Nestlé seems to have become a schizophrenic corporate brand using different brand icons for different divisions (will the real Nestlé please stand up?).
Second, Nestlé does not have the strong, pure chocolate association enjoyed by Cadbury’s Dairy Milk. The thought that it can "do a Cadbury" under a KitKat umbrella is ludicrous – Cadbury’s Dairy Milk equals simply good chocolate with a "glass and a half", equals flexible enough to
be stretched in all sorts of directions. KitKat, on the other hand, equals a chocolate-covered wafer biscuit and "have a break" equals not really very flexible at all, doesn’t it?
But what Nestlé Rowntree’s marketers appear to have failed to grasp is that chocolate is a highly emotive product. It does not have the strong, warm chocolate associations Cadbury has. Nestlé has never seemed to capitalise on the "touchy, feely" confectionery values inherent in the Rowntree brand, which are so important when it comes to selling chocolate/ expertise, heritage and trust that rivalled Cadbury’s.
What Nestlé does have are some incredibly strong "icon" brands. However, the endless inappropriate extensions, variants and product innovations have chipped away at valuable brand equity. Giving up icons such as the Smarties tube and failing to grasp the importance of the rituals associated with the KitKat foil have resulted in the loss of some of its brands’ most valuable assets.
When you start dismantling these emotional attachments and brand icons, which have taken many years and much investment to find a place in consumers’ hearts, you shouldn’t be surprised to find yourself on a sticky wicket sooner rather than later.
Chief executive officer