WPP making ‘good progress’ despite profit plunge
WPP is on track to deliver its transformation plan, according to CEO Mark Read, despite profits plunging by 30.6% to £1.46bn during 2018.
Last year, the advertising giant’s billings rose 0.4% to £55.8bn, however revenue dropped 1.3% to £15.6bn and EBITDA fell 8.8% to £2.3bn. WPP, which is in the midst of a three-year turnaround plan, spent a total of £302m on restructuring and transformation costs in 2018.
The results show the group’s revenue is weighted towards the second half of the year across all regions and sectors, especially the faster growing markets of Asia Pacific and Latin America. As a result, WPP earns around 40% of its profits in the first half the year and 60% in the second half.
In the UK specifically, constant currency revenue (less pass-through costs) was down 2.4% in the final quarter and down 2.7% on a like-for-like basis. According to WPP, its UK media investment management and specialist communications businesses performed particularly strongly, with data investment management improving.
However, performance across its public relations, public affairs and direct, interactive and ecommerce businesses was slower.
Read says since September WPP has made “good progress” implementing its new strategy, acting on its vision to become a “more client-centric company” and showing intention to simplify its offer through the creation of two new integrated networks, VMLY&R and Wunderman Thompson.
“We are showing early signs of success in attracting new business and new talent to WPP,” explains Read, who pointed to the fact WPP had six ad spots during the Super Bowl and highlighted the “strong start” of VMLY&R, which generated client wins totalling $25m in its first 90 days.
Read acknowledges 2019 will be challenging, particularly in the first half of the year, due to “headwinds from client losses in 2018”.
“However, we start the year with fewer clients under review than we did in 2018, and investments in creativity and technology will further improve the competitiveness of our offer,” he adds.
Gap splits business in a bid to ‘revitalise’ the brand
Gap is splitting off its Old Navy brand and closing 230 stores globally in a bid to revitalise the brand.
While the Old Navy brand will operate as a standalone business, Gap and its other brands, including Banana Republic, will be part of an as yet unnamed new company. The majority of the store closures will be in North America, with 55 Gap stores having already been closed. Post restructure, this leaves Gap with 742 stores globally.
Gap believes the spin-off will enable each company to “maximise focus and flexibility”. Gap Inc board chairman, Robert Fisher, says that Old Navy’s business model and customers have “increasingly diverged” from the wider group and now the companies needed a “different strategy to thrive moving forward”.
The new unnamed business will have a “unique and differentiated portfolio”, says Gap, and will be “better positioned to continue to evolve its leadership role in sustainability and social responsibility.” The company adds that being separate will enable the Old Navy brand to evolve its omni-channel model and expand its product categories “to continue to successfully resonate with value-focused customers”.
Channel 4 ramps up trial of ad-free online service
Channel 4 is to invite selected registered users to trial All 4+, a paid-for upgrade to its video on-demand service that shows programmes without ads in commissioned content.
Any decision to extend the All 4 + service, which launched as a small-scale test in late 2018, will be determined by the response from the registered users invited to pay to watch content without ads.
Head of All 4, Richard Davidson-Houston, says the scaling-up of the All 4+ trial shows thebroadcaster is “getting serious about a paid upgrade to the free service”. Last year was the most successful year for All 4 since it launched in 2006, with views up 25% year on year.
Channel 4 has also created a new All 4 logo, developed by its in-house agency 4creative and branding agency DixonBaxi. The rebrand will be rolled out across the whole of All 4, including promotional trails, social media and VoD across mobile, big screen and desktop.
Alice Tonge, head of 4creative, describes the rebrand of All 4 as the “final piece of the bigger portfolio rebrand”, which kicked off last year, aimed at aligning “all our brands around the master brand”.
In addition, the broadcaster has also launched a new iOS app built to be faster and more intuitive, as well as boasting better download capability, the ability to start programmes again when watching live and to stream audio-described content on iOS for the first time.
Race for Life campaign celebrates ordinary people doing the ‘extraordinary’
Cancer Research UK’s Race for Life is rolling out a new campaign playing with the concept of ordinary people doing extraordinary things.
The campaign, developed by creative agency Anomaly, turns the concept of being a superstar athlete on its head by showing that while everyday people may not be athletic, rich or famous, by taking part in the Race for Life they can do something even more important.
The campaign features four films, including one 30-second advert and three 10-second adverts. The shorter spots, which hero individual characters from the longer film, will be used across social and digital. The ad launches today on TV and will appear on VoD, radio, outdoor, digital and across social media from Monday.
The out-of-home campaign will feature signs on the back of Race for Life runners with inspiring slogans such as “We don’t break records. We beat cancer” and “Everyone wins this race (except cancer)”. The radio adverts will spoof interviews between sports presenters and athletes.
“Our new campaign puts our amazing Race for Life participants and the cause right at the heart,” says Sarah Pickersgill, head of events marketing at Cancer Research UK.
“We want everyone to feel inspired and know that you don’t need to be fittest or fastest, and every penny you raise, whether it’s £10 or £100, helps fund Cancer Research UK’s life-saving research into more than 200 cancers.”
ASA cracks down on small print in TV ads
New standards for on-screen text come into force today compelling advertisers to ensure text is sufficiently clear and legible to consumers, or risk facing sanctions.
From now on, advertisers must ensure any on-screen text, or small print, sufficiently emphasises particularly significant qualifying information and allows viewers sufficient time to read the text. Brands must take greater care over the choice of typeface to avoid the use of stretched or elongated text and adopt a stricter approach to ensuring an adequate contrast between the on-screen text and background.
The Advertising Standards Authority (ASA) and Broadcast Committee of Advertising Practice (BCAP) introduced these standards off the back of research last year which found viewers often struggle to read and comprehend text in TV ads that contain important qualifying terms and conditions to an offer, which risks misleading consumers.
“The new standards will ensure that TV viewers are not being misled by the small print they see on the screen,” says Guy Parker, ASA chief executive. “It’s crucial that viewers can read and understand any qualifications to claims being made in ads, so they can make informed decisions.”
Thursday, 28 February
Kellogg’s to give its cereal boxes a makeover
From Kellogg’s Corn Flakes to Crunchy Nut and Coco Pops, the company has revealed plans to redesign its cereal boxes in Europe, marking the largest portfolio-wide revamp in the company’s 113-history.
Kellogg’s says the new look will be instantly recognisable and will “reflect the naturalness of the food and the heritage of the Kellogg story” while adapting to the changing nature of the business and evolving consumer trends.
The idea was borne after the company analysed consumer insights into what they look for in packaging. It found nearly 70% of consumers were able to find the packs on shelf easier and the new design increased purchase intent by almost 50%.
According to Kelloggs, the new design “fulfils consumers’ demand for more transparency”.
“The Kellogg’s brand is one of the most recognisable brands in the world and our cereal boxes are present in over 90% of UK homes. We know people love, connect and engage with our brand and we wanted to make it easier for them to do that, which is why we’ve updated the entire portfolio at once,” says Paul Humphries, VP of marketing at Kellogg’s Europe.
Additionally, the new visual language is designed to help consumers understand more about the food and the brand.
Citymapper to rival Oyster with new travel card
Citymapper is launching a new travel card that offers cheaper fares than Oyster.
The transport app first outlined plans for a subscription-based travel pass last week, which offers unlimited travel on any mode of transport in London Zones 1 and 2 for £4.10 less a week than the Transport for London’s option.
The Citymapper ‘Super Pass’ costs £31 a week for unlimited journeys compared to the £35.20 that TfL charges, but Citymapper users have to pay for four weeks upfront whereas TfL allows you to pay as you go with Oyster or contactless payments.
Citymapper is also offering a ‘Super Duper Pass’, which covers Santander bike hire and £10 worth of Citymapper cab rides.
“Cities are complicated. Our mission has been to simplify them. We’ve solved (and are still improving) many hard problems in urban mobility: multimodal routing to help with directions, a data factory that fixes open data so users can get accurate information, and a myriad of product features that solve everyday use cases,” a blogpost from the company reads.
“But we’ve always been missing something: ticketing and payment integration so that we can help users with the complete experience… we believe ease of ticketing is essential for public transport to compete with private players, and this is important for the future of congested and complex cities.”
London is the first city to experience the roll-out, but the company says it plans to ensure the pass can soon work globally so users don’t have to worry about catching foreign public transport.
The passes – physical or virtual – are available to buy through the Citymapper app.
Labour calls for tougher online gambling regulations
Labour’s deputy leader Tom Watson is pushing for an overhaul of online gambling laws which would include new restrictions on how often customers can bet and would involve having checks in place to stop gamblers from placing bets they cannot afford.
He deems gambling to be “Britain’s hidden epidemic” and says current laws are “unfit for the digital age”.
“Whereas gambling in the offline world is highly regulated, the lack of controls on online gambling is leading to vulnerable consumers suffering huge losses,” he says.
“Online gambling companies have a responsibility to protect their customers from placing bets that they cannot afford.”
Labour’s proposed new rules would also involve restricting the speed at which people can gamble.
The BBC reports that according to the Gambling Commission, Britain has the largest regulated online gambling market in the world, generating £4.7bn for companies per year and it’s expected to grow.
Watson added that gambling should be considered a “public health emergency”.
The news comes after gambling firms agreed to a ‘whistle-to-whistle’ television advertising ban.
Ted Baker issues profit warning as shares plunge
Ted Baker has issued a profit warning, declaring its full-year profits will be about £10m lower than predicted. The news has promoted the fashion retailers shares to plunge 11% (£17.79).
The company expects profits for the year to January 2019 to be about £63m compared to previous expectations of £73.5m.
Ted Baker is blaming a £5m write down on the value of “aged stock” in Asia and the US as well as losing £2.5m on foreign exchange rates while uncovering another £2.5m of product costs after a system upgrade.
Ted Baker was hit by scandal last year when its founder and chief executive Ray Kevin was accused of harassment for allegedly forcing hugs on staff as part of a company policy.
The company will present its full-year results on 21 March.
UK car output nosedives in January
The UK’s car output has plunged 18% in January, driven by a decline in demand in both Britain and its major export markets, marking the eighth month of decline.
Output plunged to 120,649 vehicles last month, the Society of Motor Manufacturers and Traders (SMMT) says.
Britain’s car industry is now recording falling sales, investment and production with Honda feeling the biggest hit having revealed it would close its British factory which produces more than 10% of the nation’s 1.5 million cars.
According to SMMT, overall production fell 18.2%, and output destined for export was down by 21.4%. For instance, output for China was down 72% and in the EU it was 20% lower.
SMMT chief executive Mike Hawes says the industry faces “myriad challenges”.
“From falling demand in key markets, to escalating global trade tensions and the need to stay at the forefront of future technology,” he says.
“But the clear and present danger remains the threat of a ‘no deal’ Brexit, which is monopolising time and resources, undermining competitiveness.”
In addition to Honda’s factory closure, Jaguar Land Rover (JLR) and Nissan are also cutting production and jobs.
Wednesday, 27 February
BBC and ITV to launch Netflix rival
The BBC and ITV are in the “concluding phase of talks” over a streaming service to rival Netflix.
The two broadcasters have agreed a joint vision for the service, to be called BritBox, which they intend to launch by the end of 2019.
BritBox would feature only British boxsets and original series. The service would have both classic television shows as well as new commissions from British production companies specifically created for BritBox.
Carolyn McCall, CEO of ITV, says: “BritBox will be the home for the best of British creativity – celebrating the best of the past, the best of today and investing in new British-originated content in the future.“
McCall joined ITV last year from budget airline EasyJet. Since joining, she has been vocal about growing ITV’s direct-to-consumer plans as part of her “more than TV” strategy for the broadcasting giant.
BBC director general, Tony Hall, adds: “A new streaming service delivering the best home grown content to the public who love it best. The service will have everything from old favourites to recent shows and brand new commissions. It’s an exciting time for the viewing public.”
The BBC and ITV anticipate that other partners will be added to BritBox and plans to speak to regulators and the wider industry about the proposals.
BritBox is already available and popular in North America and Canada having launched in the US in 2017. It has now crossed the 500,000 subscriber threshold.
Both broadcasters have their own online streaming services, TV Hub and iPlayer, which already provide access to their content online but Britbox would bring all that together in one place.
It is unclear whether users would need a TV licence to use BritBox in the UK, or have to pay a fee. There are also questions over whether it will be ad-free like rivals Netflix and Amazon Prime.
M&S and Ocado confirm £750m ‘transformative’ home delivery deal
Marks & Spencer and Ocado have confirmed a “transformative” deal that will mean M&S can offer a home delivery service for the first time.
Under the deal, M&S will buy a 50% share of Ocado’s retail business for £750m, with the joint venture being called Ocado.
Steve Rowe, M&S CEO, says: “I have always believed that M&S Food could and should be online. Combining the strength of our food offer with leading online and delivery capability is a compelling proposition to drive long-term growth.
“This is a transformational step forward in shaping the future of M&S and in becoming a truly digital first retailer with at least a third of the business online.”
M&S will start deliveries from September 2020 and is expecting to generate £70m in savings per year by the third year following completion
These are expected to arise from increased buying scale, harmonised buying terms, conversion of M&S customers who currently account for about a third of online grocery spend, joint marketing, shared innovation, and complementary category and regional mixes.
The news comes less than 24 hours after the two companies released statements confirming discussions after the Evening Standard reported that the pair were discussing the terms of the tie-up.
Ocado has become synonymous with M&S rival Waitrose since they partnered in 2002. But Waitrose has since created it’s own delivery service and that contract is set to end in 2020. This Friday (1 March) marks the last date at which either could trigger the 18-month break clause.
Tim Steiner, Ocado CEO, says: “This is a transformative moment in the UK retail sector with the combination of two iconic and much-loved retail brands set to provide an unrivalled online grocery offer.
“The combination of Ocado and M&S will allow us to grow faster, add more jobs, and create more value, as we lead the channel shift to e-commerce here in the UK. We are very excited by the many opportunities ahead.”
Talk Talk and BT ads banned
BT and Talk Talk ads have been banned after both telecom giants were found to have been misleading the public on claims of their exclusivity.
A BT ad that claimed the company provided the UK’s most powerful broadband signal, while Talk Talk told consumers it was the only provider to offer no mid-contract broadband price rise.
As part of BT’s Infinity broadband package marketing it claimed it was the “UK’s most powerful WiFi vs major broadband providers” in newspapers and wrote it had the “most powerful business WiFi signal” on its website.
Virgin Media complained to the Advertising Standards Authority that this claim was misleading and could not be substantiated.
When contacted by the ASA, BT cited in-house tests that it said showed how its routers performed better than competitors. However, in its ruling, the regulator says BT had not tested for all significant forms of interference that could affect the speed of a home WiFi connection.
The ads must not appear again in their current forms, the ASA ruled. It adds: “We told BT not to claim that their routers were ‘the UK’s most powerful’ unless they could demonstrate that they could provide a stronger signal than other major providers when subjected to other forms of non-WiFi interference, and unless they could provide recordings of the levels of all types of interference when each router was tested to demonstrate that each router was subjected to consistent levels of interference.”
Talk Talk also came under fire from rival Plusnet after its TV ad and website featured the claim: “We’re the only major provider to guarantee no mid-contract broadband price rises on all our plans”.
TalkTalk responded that the claim was based on market share so only included BT, Sky, Virgin Media and itself, and of those providers, only it offered fixed prices on all broadband plans. Despite acknowledging other providers have fixed price plans, such as Plusnet, it asserted that based on their market share they were not a “major provider”
The ASA told the company that in future it could not make such claims when companies which “consumers would readily identify as leading names in the industry” also provided those benefits.
Wonga compensation claimants ‘fending for themselves’ following collapse
Wonga compensation claimants have been left to “fend for themselves” after the controversial payday lender went bust, MPs have warned.
Wonga fell into administration in August last year, with these customers awaiting ombudsman rulings on whether they were mis-sold loans. Around 10,500 people had outstanding claims, the Financial Ombudsman Service says, as it admits it has no way of helping people get their money back.
Treasury Select Committee chair Nicky Morgan says: “It cannot be right that more than 10,000 people who may have been mis-sold loans are just cast aside, especially as many will be vulnerable consumers.
“These people have been left to fend for themselves by Wonga, the FCA and the FOS. They’ve been allowed to fall through the cracks with nobody taking responsibility for their mistreatment.”
A spokesperson for Wonga’s administrators Grant Thornton says: “Our aim is to treat claims fairly and efficiently, and to maximise the assets we receive in order to best compensate creditors, including claimants.
“We monitor those customers who may be vulnerable (including financial difficulty, financial hardship and health and wellbeing) and are working to ensure appropriate support for these people.”
Co-op launches campaign to celebrate mid-week curries
The Co-op is launching an ad campaign to celebrate mid-week curries with its own brand range.
The ‘Feel the Heat’ campaign aims to celebrate bringing families together in a new TV ad that sees parents sit down with their daughter’s new boyfriend. Soon the father and boyfriend compete to see who can handle the spiciest curry, while the mother enjoys a tame korma. As the daughter cools her father down by waving a tea towel in his face, the ad reads “Curry night is better together”.
Ali Jones, customer director at Co-op, says: “As a convenience retailer, the Co-op is at the heart of local life. We are here to serve the community great quality food and help shoppers make those mid-week evening meals more exciting and delicious.
“We know that food really brings people together and when it comes to curry, it turns into a competition about who can handle it the hottest. We want to create a conversation which the whole nation can relate to and encourage discussions around the dinner table.”
The campaign includes TV, social, OOH and radio and is a continuation of ‘ a year of eating’ together strategy, launched in 2018, which promotes its locally sourced food and emphasises their role in local communities.
Tuesday, 26 February
Twinings and Primark owner warns of ‘terrible consequences’ of a no-deal Brexit
Associated British Foods, which owns brands including Kingsmill, Ryvita and Twinings, as well as Primark, has warned a no-deal Brexit will lead to “severe disruption” and food shortages.
The company’s finance director John Bason says it’s unbelievable that leaving the European Union without a deal in place is still an option as it will result in the “real possibility of food shortages” and “terrible consequences”.
Talking to Bloomberg, he said: “A Brexit where there is no agreement would be very disruptive and people need to understand that and the effect it would have on food.”
Bason has upped his warning since last month when he said a no-deal Brexit would be reckless.
Karren Brady called to face MPs amid Philip Green harassment allegations
Baroness Karren Brady has been called to appear in front of MPs as part of a parliamentary inquiry into the use of non-disclosure agreements (NDAs) to silence sexual harassment complainants.
According to the Daily Mirror, Women and Equalities Committee chair Maria Miller MP has written to both Brady and Arcadia boss Philip Green requesting their attendance as part of the inquiry.
Yesterday Brady resigned as chair of Sir Philip Green’s retail group, weeks after the Topshop boss was accused of sexual misconduct and racial abuse to staff.
Brady had been non-executive chairman of Taveta Investments, the holding company of Green’s Arcadia business, since July 2017.
Green strongly denies the allegations and Brady had initially stuck by him stating she had a “real sense of duty” to staff, including her daughter who works as a social media content assistant at Topshop.
She gave no reason for her resignation.
Beer alliance could be threatened by spat between Bud Light and MillerCoors
A campaign conceived by the world’s biggest beer makers to revive the category following a period of declining sales could be halted following a public disagreement between MillerCoors and AB InBev over the latter’s Super Bowl ad.
The commercial for Bud Light took aim at MillerCoor’s use of corn syrup in its Coors Light and Miller Lite brands, with the brewer responding on Twitter and with a full-page newspaper ad to defend its use of the ingredient, which it says it only uses in the brewing process.
Molson Coors Brewing, which owns US arm MillerCoors, alongside AB InBev, Heineken and Constellation Brands have been discussing the potential for a million-dollar, industry-wide campaign to reignite beer sales, but following the public dig, MillerCoors has pulled out of an upcoming meeting, according to the Wall Street Journal.
MillerCoors’ communications chief Pete Marino called it a “waste of time and money” to work on the campaign “while the dominant industry leader is spending millions of dollars demonising beer ingredients.”
He also believes AB InBev’s ads could damage beer sales generally as many brands use corn syrup, including AB InBev for some of its other brands. “AB InBev’s misguided attempt to gain a competitive advantage threatens to single-handedly set back the health of our category for a long time,” he adds.
Laura Ashley rebuffs alleged takeover bid
Laura Ashley faces possible takeover as investment firm Flacks Group says it is in the early stages of evaluating a £20m bid for the struggling retailer.
This is however, despite the fact its current owner insists it has no plans to sell the brand.
Laura Ashley’s shares fell 1.2% to 3.2p amid the news as the offer values the company at 2.75p a share. Last week, Laura Ashley issued a profit warning, telling investors its full-year results were to be lower than forecast because of difficult trading decisions.
The brand’s chairman says while the board will “assess any offer on its relative merits”, he went on to rebuff potential investors stating that as major shareholders of Laura Ashley “we have no intention of divesting our shareholding”.
“While I understand why potential parties would think we are significantly undervalued, I have complete confidence that we will be able to grow profitably and in a sustainable manner so as to create long-term value for our shareholders,” he adds.
Heist launches marketing campaign to support brand extension
Tights startup Heist has extended its product offer to include shapewear and is launching an out of home campaign to support the launch.
The ‘Rip It Off’ campaign, which has been created alongside Jack Agency, shows models ripping off uncomfortable shapewear to reveal the Heist product.
The brand will also be launching a shapewear amnesty on 28 February, asking consumers to send in their existing items in exchange for Heist’s product The Outer Body.
A previous campaign for Heist’s tights, which showed models leaping through the air wearing nothing but tights, was banned by Transport for London for being “overtly sexual”. Heist was forced to put a black bandeau across the models’ backs but Ellie Howard, the brand’s head of community, says all this did was make the brand “more determined”. “The support that we saw validated that it was well and truly time for there to be a change in the way women’s bodies are portrayed in the media.”
Monday, 25 February
TfL junk food ad bans comes into effect
The ban on advertising junk food on London’s transport network comes into force today as part of Mayor Sadiq Khan’s attempt to tackle child obesity.
The ban includes advertising on the London Underground and at bus stops across the capital. It includes food and non-alcoholic drinks that are high in fat, salt and sugar according to Public Health England guidelines. That means the ban will impact products such as sugary drinks, chocolate and cheeseburgers, while products including raisins, unsalted nuts and sugar-free drinks are exempt.
The move comes after a public consultation found 82% supported a ban. More than a third of children aged between 10 and 11 in London are overweight, according to PHE.
While the ban has high-profile supporters, including chef Jamie Oliver, there are concerns that it will cost Transport for London £13m a year at a time when it needs to pay for infrastructure upgrades. There are also question marks over how effective it will be, given that YouGov polling shows children make up just 3% of total footfall on the network.
YouTube stops anti-vaccine channels running ads
YouTube is stopping anti-vaccine channels from running ads, cutting off their ability to make money from their content.
A report by BuzzFeed finds ads, including those for major health companies, have been running before anti-vaccination content. However, advertisers told the publication that they were not aware and not happy that their ads appear on anti-vaccine content, with some pulling their ads before YouTube introduced the ban.
YouTube now says anti-vaccine content cannot be monetised because it contravenes its policy around “dangerous and harmful” content.
“We have strict policies that govern what videos we allow ads to appear on, and videos that promote anti-vaccination content are a violation of those policies,” they told BuzzFeed News. “We enforce these policies vigorously, and if we find a video that violates them, we immediately take action and remove ads.”
YouTube will replace the ads with an information panel that links to a Wikipedia page about “vaccine hesitancy” and describes it as a “top 10 global health threat”. It will also make changes to its algorithm so that anti-vaccine videos don’t auto-play in its ‘up next’ section.
Separately, Pinterest is looking at how it can halt the spread of anti-vaccine content on its platform. It has made changes to its search bar so that if ‘vaccine’, ‘vaccination’, or ‘anti-vax’ are typed in no content pops up, according to the Wall Street Journal.
Nike encourages women to ‘dream crazier’ in Oscars spot
Nike is championing female athletes in a new spot as part of its ‘Dream Crazier’ campaign to celebrate 30 years of its iconic ‘Just Do It’ slogan.
The 90-second spot, which first aired on TV during the Oscars last night (24 February), features great sporting moments from female athletes including gymnast Simone Biles, footballer Chloe Kim and fencer Ibtihaj Muhammad, as well as rising stars and young female athletes. It is narrated by tennis player Serena Williams, who also features, talking about her “crazy” accomplishment of having a child and going back to professional tennis.
“If we show emotion, we’re called dramatic… if we dream of equal opportunity, delusional,” says Williams. “If they want to call you crazy, fine. Show them what crazy can be.”
The video is the start of Nike championing women in sport ahead of the Women’s World Cup in France this summer.
Nike was one of a number of major brands to advertise during The Oscars last night. Others include Google, McDonald’s, Disney, Marriott and Cadillac in the US.
Kraft Heinz mulls sale of Maxwell House as it looks to reshape business
Kraft Heinz is reviewing options for its Maxwell House coffee business that could include a sale as the food giant looks to reshape its business following poor quarterly results.
CNBC claims Kraft Heinz has tasked Credit Suisse with reviewing the options for its coffee business, which could fetch up to $3bn based on earnings of $400m. The sale is likely to be one of a number of divestitures for Kraft Heinz as it looks to turn around struggling performance.
Its fourth-quarter earnings and revenue were sharply lower than analysts expected and the company slashed its dividend by 36% and took at $15bn write-down on two of its biggest brands – Kraft and Oscar Mayer. While owner 3G Capital made its name by combining huge companies and cutting costs, changing consumer trends mean there is no longer so much advantage in having large brands and cost cuts have negatively impacted its brands.
Supermarkets ‘misleading’ shoppers on healthy eating
Supermarkets are being accused of “confusing” customers by marketing products high in salt and saturated fat as healthy.
An investigation by BBC Radio 5 Live found Sainsbury’s, Morrisons and Tesco were stocking products high in saturated fat and salt in sections of their stores marked ‘healthier choices’ and ‘healthy and diet meals’.
At Morrisons, for example, its ‘healthier choices’ section contained a vegetarian steak slice with almost 10g of saturated fat, while Sainsbury’s edamame, coconut and lemongrass falafel had more than 6g of saturated fat and was also in the ‘healthier choices’ section. Tesco’s ‘healthy and diet meals’ section included a lamb hotpot with 8.5g of saturated fat. Women should eat no more than 20g and men 30g of saturated fat a day.
The British Dietetic Association says the supermarkets are being “unhelpful” and “confusing” customers, while The Royal Society for Public Health has called for an independent supermarket regulator. The supermarket say they are committed to promoting healthy eating.