Kraft / Unilever – a story of two reputations

There’s a headline in the Telegraph today that just about sums up the collective response to Kraft’s proposed (and now withdrawn) takeover of Unilever. It reads ‘Kraft Heinz: how to lose a deal and irritate everyone’.

From a reputation perspective, the moment I read about Kraft’s proposal, I thought, ‘what on earth are they thinking? This deal cannot go through, it would be cultural suicide for Unilever.’

Unilever has built a reputation as a values driven business that has balanced commercial success with corporate responsibility. Over the past decade it has put sustainability at the heart of its operational strategy, innovating to reduce packaging and its environmental impact. In doing so, it has demonstrated that a sustainable business model can work for all stakeholders – from investors through to society. It’s a company that most people trust to do the right thing. This positive reputation has been built over many years. We often use it in our work with clients as a case study in doing it right.

Kraft on the other hand has a less than positive reputation in the UK. Most of us associate Kraft with the worst in corporate aggression after it reneged on its promises to Cadbury following its takeover. It closed factories, shed jobs and showed zero appreciation for the founding culture of Cadbury’s – a business first established by Quakers with one of the earliest models of corporate responsibility, long before it became a buzz word.

In short, Kraft isn’t trusted in the UK. And it doesn’t have a good enough reputation to garner the level of support required for such an audacious takeover bid.

Unilever was right to flatly reject the offer. To accept it would have risked unravelling many years of good work in building a great culture, corporate brand and reputation. It would have been cultural suicide.

And what of Kraft following this failed bid? My advice is that Kraft must invest in rebuilding its reputation in the UK and across Europe. It simply doesn’t have the level of support from governments, regulators and society required to see through a successful takeover bid such as Unilever.

Kraft’s reputation recovery must start with the fundamental question of – beyond making profit – what does it stand for? And in answering that question, it could look to Unilever for help!


Spencer Fox is a reputation and corporate brand expert and has advised companies such as AstraZeneca, ITV, L’Oréal and Tesco. He is a founding partner of Tovera Consulting – brand and reputation advisers. Tovera provides research, measurement and advice that helps companies build both strong corporate brands and reputations as evidence shows both are essential to long-term business success.