Kraft-Heinz Merger Media Analysis

Kraft-Heinz Merger Media AnalysisMay 2015

ContextMerger announcement March 25

Heinz set to take over Kraft later in 2015 with 51-49% ownership split

Small handful of companies control vast majority of consumer goods – especially food and beverage

Analysis Objective Hypothesis:

The Kraft-Heinz merger announcement will be met with negative reactions due to perceived

monopolization of the food industry.

Research Methodology

FACTIVA SEARCH STRING

(("Heinz-Kraft")or(Heinz

and Kraft))and(monopoly or

"food giant" or takeover)

DATE RANGE

First 3 days surrounding merger announcement

FILTERS

•Publications only

•Remove Dow Jones

•Remove duplicates

•English only

Metrics and CriteriaPUBLICATIONS

•Unique publications

•Original articles from same publication

•Influence

RELEVANCE

•Headline

•Topic• Merger• Industry/ consumer

impact

•Key phrases• Food giant• Take over• Monopoly

SENTIMENT

•Tone• Informative• Positive slant• Negative slant

•Angle• Financial• Factual/News• Commentary

Metrics and CriteriaMOST QUOTED

•Alex Behring

•Warren Buffet

•John Cahill

•Bernardo Hees

MESSAGE PULL THROUGH

•Language from press release• Unparalleled portfolio • Powerful and icon brands• 3rd largest in NA; 5th largest in world• Synergy opportunities; global

expansion• Increased investments in marketing

and innovation• Driving innovation; growth; leadership

position in industry• Commitment to local charities

QUOTE PREVALENCE

•Number of quotes lifted from press release

Key Findings

Relevance

80%

20%

Coverage (186) Original Articles Relevant to the Hypothesis (46)

Measuring Relevance • Headline contained key terms or noted the merger directly

• Body copy spoke to anticipated results of merger rather than exclusively investor, shareholder and , stock information

Publications

Influential PublicationsArticle Publication Influence Score Circulation DataHJ Heinz buying Kraft; New company will be $28B food giant Associated Press, Inc. 99 n/aKraft and Heinz merger to create food giant CNN 73 Kraft Foods And The Rise Of Wall Street's Buy And Hold Kingpins Forbes 77 930,391Heinz deal: Cheeses can't save Kraft New York Post (Regional) 85 477,314

ANALYSIS-As 3G digests Kraft deal, rivals will focus on organic firms Reuters News 99 n/aPRESS DIGEST- British Business - March 26 Reuters News 99 n/a3G Is Said to Be in Talks to Buy Kraft The New York Times 99 2,149,012

Morning Agenda: Buffett's and 3G's Bold Bet on Kraft Foods The New York times 99 2,149,012Buffett and Heinz Say Nuts to Soup The Wall Street Journal 99 2,294,093Deal-Hungry Brazilians Came Knocking, Found Welcome Mat The Wall Street Journal 99 2,294,093Meet the Father of Zero-Based Budgeting; Pete Pyhrr’s strategy reached the White House in 1970s, then almost disappeared; now Heinz, Kraft are adopting it The Wall Street Journal 99 2,294,093

Heinz will buy Kraft Foods in mega-merger for American food The Washington Post 98 436,601

Headlines Relevant to Hypothesis

• “Merger”• “Takeover”• “Food Giant”• “Buffet”• “3G”• “Largest”• “Growth”

Headlines Relevant to Hypothesis

“Kraft Food Group Inc. Stockholders Encouraged to Contact Securities Law Firm

about Takeover”

“UK unions worried as Heinz swallows rival giant Kraft”

“Heinz to buy Kraft in deal backed by Tim Hortons’ owner and Buffett”

“Heinz gobbles up Kraft in 'merger' worth £19bn “

Message Pull Through Measuring Message Pull Through

• None = fewer than two messaging themes and/or quotes

• Some = three or more messaging themes – doesn’t necessarily need quotes

• Prominent = four or more messaging themes, at least one quote

Prominent (9), 9

Some (23), 23

None (12), 12

Sentiment Criteria1. Were readers warned about potential

negative consequences of the merger?

2. Were any investors or organizational reputations bad-mouthed or discredited? (Heinz, Kraft, 3G or Berkshire)

3. Was there any reference to monopolization of the food industry?

4. Did the author use terms similar to “cutting” and “loss” (as opposed to “saving” or “improving margins”)?

1. Was there mention of the merger

ultimately benefiting the consumer re: offer “healthier” or “better” products?

2. Was there mention of positive economic impact?

3. Was there positive mention of possible new job opportunities?

4. Did the author position potential job losses positively (“improves margins”, “saving” and “lean”)?

NEGATIVEPOSITIVE

Sentiment ResultsPositive (5)

10%

Negative (6)12%

Neutral w/Somewhat to No Message Pull

Through (35)67%

Neutral w/ Prominent Messaging Pull Through (4)8%

Neutral w/ both Prominent Message and Quote Pull Through (2)

4%

Positive (5)

Negative (6)

Neutral (35)

Neutral w/ Prominent Messaging Pull Through

Neutral w/ both Prominent Message and Qupte Pull Through

Negative Article Analysis• Consumer & Gaming

• Irish Independent

• National Post (Canada)• Influencer rating: 76 • Circulation: 177, 782

• New York Post (regional)• Influencer rating:85 with • Circulation: 477,314

•The Charleston Gazette• Influencer rating:67 with • Circulation 32,755

• The Daily Telegraph

What they’re saying…

• “Buffett has found a way to outsource the dirty work of restructuring and lay-offs”

• “Kraft faces job cuts and factory closures like those 3G has carried out at Heinz”

• “The merger is expected to lead to job losses in the US”

• “…likely to…fire much of its staff….”

Who’s talking…

Positive Article Analysis• The Washington Post • Influencer rating:98 • Circulation: 436,601

•Daily Mail

•Middle East North Africa Financial Network

•Pittsburgh Post-Gazette

•Sunday Express

What they’re saying…

• “…saw the opportunity…as even more compelling…”

• “The main emphasis…will improve margins and create a lean organization”

• “With that leanness, the new company is expected to invest in sprucing up its healthful image”

Who’s talking…

Organic Themes1. “Takeover” describes Heinz buying Kraft, not food

industry consolidation (18x’s)2. Fear of job loss (12x’s)3. “Aggressive” cost-cutting (8x’s)4. Changing consumer taste preferences (13x’s)5. Organic/smaller food companies attractive (6x’s)6. Additional future acquisitions (3x’s)7. Campbell’s snub (3x’s)

“The merger is expected to lead

to job losses in the US”

-- Irish Independent

Social Media Analysis

Day 1March 25, 2015

www.buzzomo.com - search kraft heinz merger

http://www.buzzomo.com/


Day 2March 26, 2015




Day 3March 27, 2015



Social Media Interest Over Time

www.google.com/trends - search kraft heinz, kraft, heinz

http://www.google.com/trends

Social Interest by RegionColor saturation represents density of social commentary regarding “Heinz” “Kraft” and/or “Heinz and Kraft”www.google.com/trends - search kraft heinz, kraft, heinz


Sources Scott Olson/Getty Images

"A Handful of Companies Control the Food Industry." Food Convergence. Food Convergence, n.d. Web. 30 Apr. 2015. <http://convergencealimentaire.info/>.

Image by Megan Pendergrass for “Kraft and Heinz merge to create food giant.” CNN Money. CNN Money, Web. 25 Mar. 2015. Accessed 30 Apr. 2015. <http://money.cnn.com/2015/03/25/investing/kraft-heinz-merger-3g-capital/>.


www.google.com/trends - search kraft heinz, kraft, heinz



Kraft-Heinz Merger Media Analysis

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