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Nestlé backtracks after re-branding blunder

By Catherine Boal , 27-Oct-2006

Swiss confectioner Nestlé has been forced to relaunch one of its signature European brands following the failure of its original re-brand.

Sales of Cailler dropped significantly in Switzerland after a re-branding exercise earlier this year drew criticism from environmental groups, retailers and consumers.

In April, Swiss consumer groups FRC and COTMEC conducted a study into the environmental impact of Cailler's packaging, which was designed by French architect Jean Nouvel, and lambasted the brand for its high content of non-recyclable PET plastics.

Further concerns were raised over a price hike with retailer Denner refusing to stock the chocolate and even launching a controversial advertising campaign bearing the phrase: 'Cailler sells packaging. Denner sells chocolate.'

According to local news source, Swissinfo, Nestlé, who produce brands such as Crunch and KitKat, saw Cailler sales fall by half from mid-August to mid-September this year, compared to the same period in 2005.

The company hope a return to its original form will appease consumers and pressure groups as well as breathing new life into sales.

But in a statement, FRC warned: "For FRC and COTMEC, the new chocolate packaging forecast for 2007 must take into account ecological concerns - from production to disposal."

While the blunder has damaged the company's image in its native Switzerland, Nestlé has recently also felt the need to restructure elsewhere in Europe, with a renewed focus on its main UK brands.

New product development failed to entice British customers with changes to established brands such as KitKat meeting with a lukewarm response.

Nestlé introduced flavours such as Peanut Butter and Strawberries and Cream but admitted in August that these had failed to boost sales and acknowledged there was room for improvement in the UK sector.

Production of mainstream lines such as Smarties was shifted to mainland Europe last month.

At the time of the announcement, chief executive Alastair Sykes said: "The UK confectionery market is very competitive. Our Nestle Rowntree business has market-leading brands and strong potential, and this restructure and investment programme will ensure that it is competitive and fit for the future."

Despite shake-ups in Switzerland and the UK, Nestlé results released last week showed 1.7 per cent year on year growth in the company's chocolate, confectionery and biscuits sector and a 9 per cent increase in overall sales to CHF72.2bn (€45.4bn).

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