Many trade visitors at IFA 2012 were pleasantly surprised to see Braun joining the fair for the first time ever. Braun, manufacturer of shavers, dental products and small appliances, is famous for their design heritage.
The company was the first to introduce modern design for brown and white goods, inspired by the German Bauhaus architectural style. Way back in 1955, at the same IFA we are now at, Braun shocked the world with totally redesigned audio equipment, in white, plexiglass and minimalistic design. Within a few years Braun was the epitome of the modern lifestyle.
Now that Apple has taken that position, Braun lovers are complaining that Apple has taken many design ideas from Braun. And with good reason: The first iPod was an almost exact copy of a Braun T3 portable radio of 1957. If you Google “braun apple gizmodo” you’ll find an article on this. It is no secret at all that Apple’s design chef Jony Ive is a huge fan of Braun’s most famous designer Dieter Rams.
In the late Sixties, Braun became part of Gillette because of its highly profitable personal care products (Together with Philips they are market leaders in shavers and dental care.). Already it showed that the appliance business is quite different from the fast moving consumer products sector. When Gillette was merged with Proctor & Gamble in 2005, speculation was rampant in the appliance industry about the future of Braun. Would it be reduced to the two most profitable product lines, and would the kitchen appliances be left out? And if P&G was not willing to provide motherly love, who would? Maybe Whirlpool?
Many saw them as too big for a mid-sized European brand. BSH already has the Bosch and Siemens brands, and Electrolux saw a huge overlap with its German AEG brand; Philips was the main competitor so it was also not interested. Finally, the solution came from Italy. De’Longhi, one of Italy’s main appliance brands and a 1.6 billion euro company, announced earlier this year an agreement with P&G for using the Braun brand for kitchen appliances as well as transferring patents and production facilities. The shaver, dental and personal care (female hair removal, hair care) products will remain at P&G.
The transfer was received well in the market. De’Longhi, which took over UK brand Kenwood a few years ago, is seen as a perfect new parent company for Braun. Their products are in the same category, but Braun is strong in Northern Europe, a region where De’Longhi is mainly active in coffee products. There is an example: French GroupeSEB (the world’s No. 1 in small appliances) bought German brands Krups and Rowenta years ago and is quite successful with its own multibrand strategy; it is seen as wise for De’Longhi to follow path.
The Braun small appliance portfolio needed attention. Their product portfolio and innovations were suffering. For instance, right before the Gillette-P&G merger they developed a single-portion beverage system together with French food giant Kraft, called Tassimo, unique because it could read a barcode from the capsules containing the preparation recipe. Tassimo is multi-beverage: coffee, cappuccino, cocoa and tea.
But sadly, P&G did not want to co-own a product from a main competitor and Tassimo was sold to BSH. So Braun had no serious offering in the exploding high-end coffee market, just drip filter products. Now, the new combination can make a new start: Consumers still know the brand and the vast combined knowledge of both companies as well as the will to make it work will do wonders. The German staff will have to adapt though: Italian management culture is quite different from German: much more hierarchical, and a frank expression of your opinion (no problem in Germany) can get you in trouble in Italy, especially if the boss feels threatened or insulted. But hey, at least you get to keep your job.
De’Longhi started in 1902 as a small industrial workshop. First they expanded in portable heaters and air conditioning, mainly in Italy, but expanded in all segments of small appliances, including floor care and ironing. They are one of the three European main makers of fully automatic espresso makers, together with Swiss Eugster and Saeco/Philips. Since they took over British Kenwood they have access to Kenwood’s Chinese factories, and they relocated parts of their production there.