Zuegg M&A class presentation
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This document outlines a potential strategic alliance between ZUEGG, an Italian family-owned fruit processing company, and Danone, a multinational food producer. ZUEGG currently has strengths in high quality, natural products and control over its production chain, but also faces threats from large competitors. The proposed alliance would involve ZUEGG supplying fruits and jams for a new Activia yogurt in Italy. This could help both companies grow revenues, position ZUEGG as a quality supplier in Europe, and capitalize on growing demand for healthy products. However, there are risks of low demand for the new product or ZUEGG losing its brand identity through the partnership.
Zuegg M&A class presentation
- 1. Mergers, acquisitions and corporate restructuring Doro Simone Todea Anee-Marie Varesco Michela
- 2. Outline n ZUEGG Presentation n Company Analysis n Industry, trends and consumers’ behavior n Strategy & Forecasting n Conclusions
- 3. Company Information n Italian family-based company n Cultivation and processing of fruit products n Complete control on the value chain n High quality and local products n Presence in Europe: Austria, France, Germany, Italy and Russia
- 4. Swot Analysis Weaknesses • higher prices than competitors • low results in the past years low profits in the sector of baby food • other current liabilities: +75% in 4 years Threats • Russian market: a large portion belongs to Pepsi and CocaCola (acquisition of many small local companies) • big multinational competitors • increasing costs of raw materials Opportunities • (recent) expansion abroad • 3rd rank in Europe for semi-finished products • strategic alliances: new markets and products • high demand in Spain, Italy and UK Strengths • high quality and naturalness of the products • control on the entire production chain (from the raw materials to the finished products) • B2B: 41% of the total revenues (increasing trend) • increase in the extension of the cultivated land • trust of consumers on local and genuine products • Skipper: best brand
- 6. Industry, trends and consumers’ behavior food industry not affected by financial crisis increasing demand for healthy products purchases driven by quality, not by price preference for local products 1. “I want high value, not necessarily low cost.” 2. “Make it easy to be green.” 3. “Keep me safe.” 4. “Help me stay healthy.” 5. “Make my busy life less stressful.” 6. “Make me feel special.” 7. “Understand my cultural context.”
- 7. Strategy - Brainstorming Smoothies No plan for future acquisitions “We are digesting our operations in Russia and it will take a while, we have a step by step policy in our company”. Oswald Zuegg Avantium Retailers
- 8. Strategic Alliance B2B segment: - collaboration already implemented in Russia - expansion of the business - no disproportionate new costs - expand the hectares of cultivated land
- 9. Strategic Alliance B2C segment: Activia Italy Characteristics of the product: sugar-free jam and fresh fruit provided by ZUEGG light yogurt with 0% fat triple amount of proteins the exclusive probiotic culture Bifidus Regularis Flavors: coscia peer, quinci apple, black grapes and Sicilian red orange
- 10. Forecasting
- 11. Strategy – strong points Both companies ZUEGG DANONE -‐ growth in revenues -‐ growth in gross profit -‐ following and being part of the new healthy trend -‐ associa8on with a mul8na8onal -‐ recogni8on as an qualita8ve supplier -‐ be;er presence in Europe -‐ recogni8on as a true italian brand ambassador -‐ recogni8on for qualita8ve produc8on -‐ innova8on in new products -‐ compe88ve advantage in Europe among its peers Strategy – weak points (risks) - low demand on Activia Italy - brand identity lost as a consequence of the collaboration solu%on: good marke%ng campaign and clear message
- 12. Thank you for your attention!