Baking a Strategic Dilemma

News by CBC that the Weston empire is selling its namesake bakery. ‘History’ and “Legacy’ are nice, but times change. I’m surprised it took this long for Loblaws, a grocery & commercial property giant, to exit the brand supplier biz. Fast Moving Consumer Goods (FMCG) is a very different business than Retail or e-tail, arguably more strategically demanding & less day-to-day ‘execution dependent’. It involves different strengths, investment time horizons & marketing training /emphasis.

https://www.cbc.ca/news/business/weston-food-grocery-1.5960329

Can Weston Bakery rise to success with Ace, Wonderbread & other brands, without its powerful parent? imo the firm (division?) has acted like a FMCG player for decades: investing in brand, innovating with new entries, avoiding the ‘down & dirty’ end of the market (unlike many house brand manufacturers). However, if Loblaws cuts ties, then (a newly independent) Weston must ensure its entries legitimately earn their way into distribution at Canada’s #1 retailer (its current parent, Loblaws) and associated banners. I doubt Weston entries have had a free ride, but I also suspect Weston parentage has worked in their favour in the Weston family empire.

A dilemma: is Weston Bakery better off as an IPO/Indie FMCG player? or better off acquired by another FMCG player? I hope for the first option, for the sake of the Marketing staff. If Weston Bakery is bought & the acquisition plays out like a typical FMCG takeover, most Weston Brand Management and R&D staff will need to find new jobs, pronto. Not to be negative, but that’s how it works in FMCG. The gobbler staffs the brands they acquire with ‘their people’.

Either way- for the bakery firm, there are both sunny and cloudy signs ahead:

In their favour: they’ve proven able to identify & seize upon consumer trends such as ‘artisan’, upscale offerings, multiculturally appealing lines, ‘Pull support’ for their brands- as per any successful FMCG firm. Also: the Bakery’s ‘Loblaws linkage’ has likely limited their success to date at Loblaws’ direct competitors -Metro, Sobeys, etc. Erasing that iffy parent tie may result in more lines carried at Grocery stores nationwide.

Going against them? The gluten-free and anti-carb trends- and the new reality of fighting for shelf space, paying full rent for those lovely (and effective!) secondary display racks in the Deli section, etc.

In my home, fresh Ace bread is an affordable indulgence – a ‘treat’ that doesn’t break the bank. That’s good enough for me to hope this soon-to-be-ex Weston entity keeps baking up success.

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