CARGILL'S NEW BRAND STRATEGY BUILDS ON COMPANY GOAL TO CREATE DISTINCTIVE SOLUTIONS FOR CUSTOMERS
Debbie Coakley, Contributing Editor
For four years running, Cargill employees and customers around the world have seen a new company taking shape. And these changes are not just cosmetic. They're part of a business strategy that is focused on making Cargill a true solutions company for its farm and food company customers.
Cargill Inc. was founded in 1865 as a single grain elevator in Iowa. Now headquartered just outside of Minneapolis, the company has evolved into an international marketer, processor and distributor of agricultural, food, financial and industrial products and services. It employs more than 98,000 people in 61 countries. Cargill's strategy is to provide customer solutions in agriculture, supply chain management, food applications, and health and nutrition.
"While the company has undergone various changes and transformations, many people continued to view it as being mainly involved in commodities trading," says Jim Hield, vice president of marketing services. "That's what drove us to invest more in Cargill's brand strategy."
A 10-YEAR JOURNEY
During its 138-year history, Cargill had built a reputation for integrity, dependability and market knowledge. But it hadn't necessarily been viewed as being creative, innovative and willing to share its expertise with customers.
Four years ago, the company set out to transform itself by building on its expertise and reputation for integrity by adding skills and capabilities to deliver distinctive value to customers. "We've introduced a variety of products and services to deliver on our new promises," says Ann Ness, director of advertising and brand management. "At the same time, we're working to ensure that our brand positioning captures the essence of the new Cargill taking shape."
The company was reorganized into 90 business units to allow employees to focus more intensely on current and potential customers. "To keep pace with these changes, we recognized that our vision statement and corporate identity could not remain static," Ness recalls. "This is a large, complex and dynamic organization. We faced a fundamental question: What is the identity we are trying to communicate?"
Rob Johnson, senior vice president, led the effort to address that question. "We learned from employee focus groups that our former mission statement's focus to 'raise living standards,' while compelling for some, did not resonate with many of our employees around the globe," he explains. "Worse, few employees could describe our mission statement or remember our core beliefs."
The Corporate Leadership Team became convinced that Cargill needed a short, aspirational and unique vision statement. The result is a vision statement (see page 26) intended to lead the company forward as it embarked on a 10-year journey to transform its business.
Here's how Cargill's brand positioning has evolved:
In May 2001, the Cargill Brand Council was established to oversee implementation of the company's new brand strategy, including the introduction of a new logo and identity system. The Brand Council draws on the expertise of senior leaders from public affairs, marketing, organizational excellence, human resources and the businesses.
In June 2001, the Council, led by Larson, defined the company's new brand architecture and spent the next six months developing nomenclature and a corporate signature system. Hield says the goals were to reinforce a comprehensive solutions focus, build brand equity in the master brand and maximize synergies among business units.
"Brand architecture is the organization and structure of a brand portfolio that specifies the roles and natures of the relationships among brands," Hield explains. "Cargill is moving toward a 'branded house' system, with Cargill as the master brand of a company offering a diverse array of products and services ranging from grain processing and commodities trading to financial risk management tools, supply chain management services, health and wellness products, and innovative new food technologies."
Hield adds that while most of the businesses are branded with the Cargill name, some business units, joint ventures and subsidiaries operate under other brand names. Some of these "sub-brands" may eventually migrate to the Cargill master brand, while others will retain their separate names but will be endorsed as "A Cargill Foods Company" in packaging and advertising and on business cards.
In February 2002, Cargill introduced its new logo and identity system with festivities at its Minneapolis headquarters that were broadcasted live to celebrations at company locations worldwide. "This was a fun and exciting event," Ness says. "Senior management introduced our logo to employees in six different languages, and large food company customers commended employees on the transformation they had witnessed at Cargill."
Ness notes that the campaign to announce the new logo initially focused on employees to generate excitement throughout the company. A couple weeks before the introduction, the company sent postcards to the homes of 40,000 employees. The postcards read: "There's a new Cargill taking shape." Each included a different comment: "I am not a silo." "I am not a commodity." "I am not a cocoa bean."
Posters with the same theme were placed at the headquarters and locations around the world. Then, the night before the logo introduction, these posters were replaced with ones featuring brand-affirming statements such as: "I am an innovator." "I am a problem solver." "I am a partner."
Following the logo introduction until October 2002, the company developed its brand identity standards. "The new identity will nourish us as we embark on the aggressive goals set forth in our Strategic Intent," Ness notes. "It also will align the Cargill brand with our strategy of providing distinct customer solutions."
From October 2002 through March 2003, Cargill conducted baseline customer research to help clarify the brand strategy. Phone interviews were conducted with 350 customers. Then in-person, one-on-one interviews were conducted with 28 executives at 14 of Cargill's largest customers, such as Nestlé and Wal-Mart. Researchers also interviewed employees from around the world to get their thoughts.
In May 2003, Cargill was ready to introduce its new brand positioning. "This work is the next incremental step in our 10-year strategic action journey," Ness says.
In September, the company unveiled a new communications initiative directed at showing key customers and constituents that Cargill is "transforming its knowledge and insight in the agrifood chain into action that helps customers succeed," says Larson.
This collaborative theme will be the focus of messaging to customers and potential customers for the next two years. The fall 2003 campaign includes advertising in business print such as the Wall Street Journal and Forbes, agricultural and food industry trade publications as well as TV ads in the United States.
SIGNS OF SUCCESS
Ness says the impact of a new business strategy and vision, combined with the introduction of a new logo and identity system, provides the makings for a powerful brand - potentially.
"Any company concerned about branding needs to recognize that employees are the heart and soul of the brand," she explains. "Their actions build the brand."
That is why Cargill directed its branding efforts primarily at employees, in an effort to raise employee awareness of - and buy-in for - the customer solutions orientation, Ness adds.
Reaction to the new customer focus has been positive. Consider Buffalo, N.Y.-based Rich Products, for which Cargill is the exclusive supplier of wheat and soy flour, corn sweeteners, chocolate and other ingredients. Nine joint Cargill-Rich working groups meet regularly to establish "touch points" on everything from procurement to online bill paying. "A truly strategic alliance is about the best interest of one company also being the best interest of the other company," says Bob Grow, Rich's director of global procurement.
There's also financial value to be gained in a well-managed brand. Consider that for fiscal year 2003, Cargill reported net earnings of $1.29 billion, compared with $798 million in 2002 and $333 million in 2001. A contributor to these increases, according to CEO Warren Staley, is the progress Cargill is making to build a "more enterprising foundation from which to serve customers and grow."
Ness notes that although it is difficult to know what progress a company is making with brand strategy, the company has baseline measurements that it will benchmark against. "A year from now, we'll conduct research with customers to see how we are performing on our goal of collaborating with customers for our mutual benefits," she says.
SIGN OF CHANGE
Cargill's new logo - and the brand identity system that goes with it - signals change in the company in a visible way. It's a flag for Cargill's new vision statement.
"A new logo is a time-honored way for an organization to send a message about a fundamental shift in its business," says Joel Goren, a branding strategist who helped Cargill in the early stages of this initiative. "If people look at this change only as, 'they changed the logo,' then they're missing the point."
The new logo was a hit when it was introduced to top executives in November 2001. "They liked how it incorporated aspects of the old logo into a modern and more progressive design," Ness notes.
Franke discovered a way to pick up the top of the old stylized Cargill "C" as a design element he calls the "banner." Ness says some people perceive the shape as a bridge, leaf or horizon - all logical images to associate with Cargill activities.
The rest of the design was fairly straightforward. Research revealed that more people around the world recognized the Cargill name than the logo, Ness explains, so the new logo would be based on the Cargill name.
The logo has the advantage of being a "wordmark," meaning it integrates the company name. This type of design reduces tampering, Ness points out, and the new style guidelines encourage more consistent application of the logo.
A logo and identity system's power comes from consistent use, notes Dave Larson, Cargill, who led the branding effort. "A new logo provides a fresh start to bring needed discipline to our brand management."
The logo caught the attention of The Conference Board, a not-for-profit organization that creates and disseminates knowledge about management and the marketplace. In its March/April 2003 issue of Across the Board, identity specialist Tony Spaeth recognized the logo as the best of all new logos in 2002.
Cargill's grain elevator and origination business, called Cargill AgHorizons, has led the charge to become more customer focused. Cargill AgHorizons has created a variety of product and services - including grain marketing consultation services, risk management tools, crop inputs advice and other tools - to help farmers prosper.
"These offerings reflect the collective input during the past several years of listening to our farmer customers and working closely with them to help develop better ways to manage - and market - their grain crops," says Dan Dye, Cargill AgHorizons president.
Cargill AgHorizons managers will continue to rely heavily on feedback from customers through annual surveys, customer council meetings and one-on-one interactions to identify ways that improve efficiency and promote best practices to benefit customers.
One customer who has witnessed the changes in Cargill is Bob Bendfeldt, a grain producer from Gibbon, Neb. A Cargill AgHorizons customer for 15 years, he utilizes services such as grain marketing contracts and help in managing his fertilizer inputs.
"They appear to be more geared toward what customers want and need, and they offer more innovative marketing programs," Bendfeldt says. "I've seen competitors follow Cargill AgHorizons' lead in an array of risk management areas such as its Premium Offer, Floored Average and Pro-Pricing contracts." AM
Debbie Coakley is a freelance writer based in Warrenville, Ill.