Sara Lee Corporation has announced that it would be splitting itself into two separate companies to refocus on specific product categories: Hillshire Brands for its meat-centric food products and D.E. MASTER BLENDERS 1753 for its coffee and tea business. This announcement follows the footsteps of Kraft which announced that it would be splitting into two last year.
Splits seem to be becoming a trend as companies seek to gain more specialisation in each category after a long period of consolidation. Brands can also benefit by being more nimble to changing consumer tastes and trends. In light of the rise of social media, companies have realised that they need to put in more effort in engaging their customers. People are no longer content to simply consume, but want to find avenues to participate in brand building. This is also coupled with an increased consumer awareness, making the consumer goods business more than simply selling a product and making sure that people know about it through traditional advertisements.
It might be silly nostalgia on my part, but I feel that such moves often disregards the brand equity existing in names. Sara Lee and Kraft are both globally known brands that consumers have interacted with for many years. Although a change in the corporate brand has no visceral impact its consumer products, these companies are giving up a name that comes quickly into the minds of consumers, and diminishes years of efforts in brand building.