ANALYSIS: Why HP Foods is being shaken up

Claire Murphy examines the problems which prompted HP’s French parent,

Danone, to restructure its UK marketing

Last week it emerged that the consolidation of French company Groupe

Danone’s sauces and dairy businesses in the UK will mean the removal of

director-level marketers.

The marketing structure at GD’s UK subsidiaries Danone and HP Foods is

likely to resemble that of their sister company, Jacobs, with

decentralised categories headed by a general manager and a marketing

manager. So what’s going on?

It may be the third biggest food company in Europe, the world’s top

biscuit maker and second largest producer of mineral waters, but the

performance of Groupe Danone’s UK brands lags well behind.

The most promising growth prospects for Groupe Danone are in Eastern

Europe and Asia. Its problems cracking the UK, where none of its brands

are in the ACNielsen top 100, are down to the fact that its core

categories - biscuits, sauces and mineral waters - are under particular

pressure from own-label.

Brand building is clearly in order and the company has increased ad

spends on its biggest names as well as investing in new product

development, particularly in sauces. It has also begun to ad the Groupe

Danone logo to various products.

But the sticking point appears to be culture clash. In 1988, Danone

chairman Antoine Riboud bought the quintessentially British brand, HP

Sauce, from The Hanson Trust. The idea was to use HP as the ‘royal road’

into the UK, the US and Australia by taking advantage of its

distribution system.

The UK businesses have had a succession of managers, many of them

French, who have had varying degrees of success getting on with British

marketers. HP chief Andrew Marsden left last week in similar

circumstances to those of his predecessor, Chris Bruce, two years ago.

Groupe Danone is committed to building its UK businesses, but the

question is whether its brands have much potential for growth in their

difficult categories and whether the company should take a more hands-

off approach to UK marketing.

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Danone’s UK brands

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Biscuits

Jacobs, Club, Twiglets, Ritz

Dairy

Danone yoghurts

Beer

Kronenbourg

Sauces

HP, Daddies, Lea & Perrins, Amoy

Mineral water

Evian, Volvic

Pasta

Agnesi

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This article was first published on Marketing