Insight: Brands, truth and failed take-overs
As the father of two boys hurtling towards their teenage years and yet unseen mischief, there is one rule that I try to instill above anything else. I tell them I'm not that bothered if they spend a little too much time in front of a screen; I tell them I'm not that bothered if they dye their hair blue and wear trousers that are too tight; I tell them I'm not that bothered if they don't always get top grades in school. But the one thing I do insist on is that they tell me the truth. Because honesty for me is paramount; it is about trust and respect and understanding; it is about knowing right from wrong and being true to yourself and to those that care for you and invest time in you.
And for me, the same principle applies to brands, which means embracing - or being forced to embrace, honesty.
Social media has provided a platform by which companies and people can be quickly exposed - even more important and relevant today in our era of 'fake news' and 'alternative facts'. So, if ‘truthfulness’ isn't at the core of everything that brands do, they run a huge risk of being found out, being exposed and suffering significant reputational and financial damage.
Forbes magazine recently carried out a survey and ranked their Top 100 brands in terms of the attribute, “is it honest and trustworthy.” Hershey came out on top. Known for ‘Kisses’ but also for community outreach, Hershey gives back and is rewarded with consumer loyalty and affection for the brand.
In a separate report, Label Insight writes "According to the 2016 Food Revolution Study, 94 percent of consumers say transparency is important to their purchase decisions. Empowered by choice and information, customers have a greater expectation—and demand—for transparency from brands."
We know that we want to spend time with and work with people we can trust. And many of us have learned, from bitter experience, that when trust is broken it is difficult to rebuild, because we feel betrayed. Similarly, when given the choice between a brand that is honest and transparent and a brand that we're not sure about, there is only ever one option. We want to know where our clothes are made; how charities spend our money; where our food was grown and how employees are treated.
Now, more than ever, informed consumers, partners and investors demand to know the truth.
Which brings us to the recent attempted take-over of Unilever by Kraft Heinz, at a proposed cost of a cool $143bn. This was, in part, influenced by hard times at Kraft Heinz and other big consumer brands, once considered the world’s most stable. As the Economist noted, ‘shoppers want products that are deemed healthier, more natural or more authentic’. The ensuing collapse of the deal was explained in various ways; by a difference in cultures; by Unilever’s emphasis on ‘sustainable growth’; by Kraft Heinz’s aggressive cost cutting and laying-off of staff; and most interestingly, by a perception that Kraft Heinz don’t always keep their promises. Following the failure of the very same Kraft Heinz to honour their pre-acquisition promises to protect jobs when they purchased Cadbury Schweppes, could it be that the second largest takeover in corporate history fell apart because of a perception that Kraft Heinz and their 3G owners aren’t quite as honest as they should be?
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