April 25, 2001
By Jack Neff
CINCINNATI (AdAge.com) -- Procter & Gamble Co. made official today what had been widely speculated for months: The company wants to divest its Jif peanut butter and Crisco shortening and oil brands.
P&G said it will consider swaps, sale or "alternate offers" for the brands, which President-CEO A.G. Lafley said are no longer a strategic fit for P&G but "represent a significant business opportunity for the right buyer."
Both brands have leadership positions but in categories that are flat to declining -- and they're North American brands with under $400 million in sales each in a company that wants to focus on global brands with $1 billion or more in sales.
Long ad history
Grey Global Group handles Jif, while Publicis Groupe's Saatchi & Saatchi handles Crisco. Both brands have a long heritage at P&G; Crisco was launched in 1912, with its first ads by J. Walter Thompson. In 1922, P&G launched its longest-lasting agency relationship, assigning Crisco and Ivory to Blackman Co., which ultimately became part of Saatchi.
The fate of the remainder of P&G's food and beverage business had been in doubt since P&G announced plans in February to spin off its Pringles and Sunny Delight brands into a new company jointly owned with Coca-Cola Co. That deal is expected to close in June, pending regulatory approvals.
Would be left with coffee
Should Jif and Crisco be sold, P&G's only remaining entry in food and beverage would be Folgers and Millstone coffees, which also have been subject to divestiture speculation, with Sara Lee Corp. believed by some industry executives to be a possible buyer.
Jorge Montoya, president of P&G's fast-shrinking global food and beverage business, as well as Latin America, said: "We will focus on accelerating the profitable growth of our strong coffee business, as well as the Pringles snacks and juice businesses in the new P&G/The Coca-Cola Co. [venture]."
A P&G spokeswoman said the company wouldn't comment on speculation, but sadi, "Right now we are committed to the coffee business." -- Jack Neff
Copyright April 2001, Crain Communications Inc.