The recession, according to Federal Reserve Chairman Ben Bernanke, is “technically” over. This mid-September pronouncement boosted stocks in the United States, Europe and Asia temporarily, unencumbered by Bernanke’s additional comments that the recovery wasn’t going to be a quick and rapid one.
He cited a jump in August retail sales as a sign that the worst was over. I, for one, am thrilled to hear the chairman “stick a fork” into the Great Recession. And in this instantaneous, media-altering world of ours, I’d like to believe the boon is back, but I have a feeling this is going to take more time than most would believe.
What I’m most curious about, however, is how companies dealt with the downturn and whether they’ve positioned themselves for the upturn. A “hunkering down” mode might have made sense to “bean-counters,” but those executives who have weathered such storms before understand that investments during such lean times typically pay off three- or four-fold when good times return.
Coincidently, Bernanke’s pronouncement proceeded the unofficial end of summer here in the United States, which occurs after the Labor Day holiday (always the first Monday in September). As it turned out, I went on hiatus during that time to attend a family wedding and bask on the shores of Cape Cod afterwards.
Unfortunately, I didn’t do that much basking (weather didn’t cooperate), but neither did Kraft.
It was during this end-of-summer escape that Kraft announced it was pursuing Cadbury and doing so quite determinedly. Funny how the confectionery world continues to turn, even when one’s vacationing.
Well, news of the proposed acquisition prompted a host of analysts’ quotes, with most applauding the deal, albeit with caveats (namely, the final purchase price).
As I’ve mentioned in my column forsweet & healthy(our weekly eNewsletter) the week the news broke, megamergers may look great on paper, offering various growth synergies and cost-saving benefits, but implementation and integration don’t always work out so neatly.
I do credit Kraft with having chutzpah about the move; Irene Rosenfield, didn’t wait for the recession to technically end before opening with the Cadbury gambit. The brain trust at Kraft had done their homework early on, and after being rebuffed by Cadbury, elected to go public with its proposal.
Again, a bit of chutzpah, forcing everyone, including the folks at Hershey and Nestlé, to consider the ramifications of such an acquisition
As for Cadbury, I can see their reluctance. After all, the executives there have done all the heavy lifting, separating themselves from the soft drinks business and implementing a variety of cost-cutting measures.
I’m not sure how this will all end up, and I’m gambling a bit that the deal will still be evolving when our issue reaches your hands.
But if memory serves me well, the proposed sale of Hershey by its Trust several years ago simmered over the summer for many weeks before being resolved. I think this will percolate for some time, as well.
And that gets me back to the subject of being positioned for the rebound. Was your company percolating during these tough times, getting itself ready for a grand entrance when the recession finally made its sorry exit? Or did it hunker down, just hoping to survive? I hope it was the former, since I think you’ll see many forward-thinking manufacturers looking to take advantage of the rebound; consumers will undoubtedly exhale a bit and want to indulge themselves and their families, friends and colleagues with a broad range of confectionery treats.
So I gladly bid adieu to the Great Recession, anxious to see who’s prepared to charge forward with new products, processes and promotions. And a sad “so long” to summer, which zipped by way too fast this year. I’ll miss the Panama hats, khaki shorts and Hawaiian shirts.