INDUSTRY LEADERS SPEAK OUT ABOUT BRAND IDENTITY AND INTEGRITY
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CASE STUDY
Cross-industry companies share best practices for GS1 Company
Prefixes during mergers, acquisitions and divestitures.
INDUSTRY LEADERS SPEAK OUT
ABOUT BRAND IDENTITY AND
INTEGRITY
EXECUTIVE SUMMARY
GS1 Company Prefixes help Consumers recognize companies by their brand names, their products, or
companies accurately track and simply by their company names. Yet, from the time their products leave the
trace their products, giving them manufacturing lines to the time they are purchased, companies are identified
full-stream visibility all the way throughout their supply chains by product identifiers derived from their unique
to retailers’ shelves. GS1 Company Prefixes. To protect their brand identity, companies must effectively
manage their GS1 Company Prefixes when it comes to mergers, acquisitions and
divestitures (M&A).
To do this, internal stakeholders like sales, marketing, and operations, to
name a few, should recognize the importance of the GS1 Company Prefix as
the foundation for accurate data, and support strategies and practices that
properly plan for and transition acquired and divested GS1 Company Prefixes.
During negotiations, legal departments must be especially attuned to care
for GS1 Company Prefixes as licensed-to-use resources in M&A agreements.
Transitioning GS1 Company Prefixes starts with a detailed plan and timeline
created by both the acquiring and selling companies. Decisions about how
to integrate GS1 Company Prefixes should consider cost and time implications
as well as the upstream and downstream impact on the company’s entire
supply chain.
In the end, companies can curtail long-term issues and ensure enduring brand
identity by using best practices from experienced industry leaders and resources
from GS1® and GS1 US™.
2 CASE STUDY: GS1 COMPANY PREFIX BEST PRACTICES—January 2012
Mergers, acquisitions and “More and more companies are embracing GS1 Standards
divestitures appear to be on throughout their supply chains to gain visibility and support
the upswing in today’s global traceability. As a result, they understand the critical need
business economy. In a July for sharing accurate data and the significance of managing
2011 survey, KPMG found that GS1 Company Prefixes during M&A activities.” —GINA TOMASSI ,
67 percent of executives at Director of Customer Supply Chain and Logistics, PepsiCo
food and drink companies
expect their firms to be
involved in merger activity
companies accurately track and trace their products, giving
during the next two years.
them full-stream visibility all the way to retailers’ shelves.
According to its October
2011 report, “Mergers and GS1 US recently talked with industry leaders experienced
Brand Identity Value Acquisitions Outlook,” in managing GS1 Company Prefixes during M&A activities—
in Digital Commerce Ernst & Young advises that Dean Foods, DeMet’s Candy Company, Kraft Foods,
36 percent of U.S. companies Nestlé USA, PepsiCo, The Greenery, Unilever, and an
Consider the value of the
are likely to acquire in the apparel manufacturer. Here are their “lessons learned”
GS1 Company Prefix in
next six months, up from along with recommended best practices when planning
rapidly expanding business-
28 percent a year ago. for and effectively transitioning GS1 Company Prefixes
to-consumer interactions.
Longer-term, nearly half of all for quality data and brand integrity.
In this new digital world,
companies expect to acquire.
consumers have brand
RECOGNIZE THE IMPORTANCE
and product information As corporate assets, liabilities
literally at their fingertips. and contractual rights are All companies offered an initial best practice: Ensure all
With the proliferation of negotiated and transitioned internal stakeholders recognize the importance of managing
social media, smartphones GS1 Company Prefixes for data accuracy—and for the benefit
during mergers, acquisitions
and apps, consumers are of the business.
or divestitures (M&A), one
able to scan barcodes to notable consideration is the Gina Tomassi, director of Customer Supply Chain and Logistics
receive information about GS1 Company Prefix, the with PepsiCo, shares her perspective. “More and more
the product—its description, foundation of a company’s companies are embracing GS1 Standards throughout their
where to buy, whether it’s
brand identity. supply chains to gain visibility and support traceability. As a
subject to recall and much
result, they understand the critical need for sharing accurate
more. Therefore, if accurate A GS1 Company Prefix
data and the significance of managing GS1 Company Prefixes
and complete product and is used to build all GS1
during M&A activities.”
brand ownership information Standard identifiers like
is available, the company can Global Location Numbers As the world’s premier consumer products company focused
gain a competitive advantage (GLNs), Serial Shipping on convenient foods and beverages, PepsiCo (www.pepsico.com)
in a world where consumers Container Codes (SSCCs), is home to hundreds of brands around the globe. Tomassi has
have many choices. and Global Trade Item vast experience with planning for and transitioning
Numbers® (GTINs®), which GS1 Company Prefixes.
are encoded in barcodes.
Doug Naal, global standards manager with Kraft Foods, also
It is assigned to only one company and cannot be shared
has a great deal of experience with M&A and GS1 Standards—in
by multiple companies. It uniquely identifies the company the U.S. and abroad. “We are constantly educating our internal
or brand that owns the product, so if multiple companies teams about the downstream benefits for our business when
unknowingly use the same GS1 Company Prefix, it can cause
confusion among trading partners. For example, purchase
orders may be placed with the company that no longer
sells the product, payments may be made to the incorrect
company, and charge-backs may be applied to the wrong “We are constantly educating our internal teams about the
company during coupon redemptions. downstream benefits for our business when GS1 Company
Prefixes are properly cared for—benefits like customer
If the GS1 Company Prefix is effectively managed during M&A goodwill, speedy time to market, and avoidance of
activities, it enables companies to have complete clarity about unnecessary costs.” —DOUG NAAL, Global Standards Manager,
the identity and ownership of products and brands. It helps Kraft Foods
3 CASE STUDY: GS1 COMPANY PREFIX BEST PRACTICES—January 2012
GS1 Company Prefixes are properly cared for—benefits like “Our [GS1 Company Prefix strategy] user guide gives our
customer goodwill, speedy time to market, and avoidance of attorneys direction about whether to keep or spin-off our
unnecessary costs,” says Naal. Dean Foods’ GS1 Company Prefixes. Our strategy also
includes how we assign Company Prefixes—by brand or
With an expansive portfolio of worldwide brands, Kraft Foods
across brands. For example, if a Company Prefix is shared
(www.kraftfoodscompany.com) is the world’s second largest
by multiple brands or multiple dairies within Dean Foods,
food company, and credits its many mergers and acquisitions
it is retained. This will minimize our company’s associated
in building its global presence.
costs, time and labor.” —NADINE RADOMSKI , Manager E-Commerce
While Naal and the Kraft Foods customer logistics team (of Collaboration, Dean Foods
which Naal is a member) are not literally at the “negotiation
tables” when acquisitions are being worked out, they
recognize that they are in the best position to promote the
importance of GS1 Company Prefixes within the Kraft Foods important,” explains Richard. “Retailers are using the GDSN®
organization. Naal and the logistics team consistently strive (Global Data Synchronization Network™) to catch suppliers’
to keep awareness levels high among the Kraft Foods M&A data inaccuracies before they lead to big problems in
team so that appropriate decisions about the treatment of their supply chains. Our people understand our retailers’
GS1 Company Prefixes can be made on a case-by-case basis requirements and seek to support our constantly evolving
in the context of M&A transactions. data accuracy practices.”
Richard has put in place data accuracy guidelines for product
Naal plans to meet with the Kraft Foods legal team to
managers and others to follow. In addition, internal data
discuss specific GS1 Company Prefix strategies in the context
audits are conducted to maintain Kraft Foods’ high rating
of mergers, acquisitions and divestitures with the goal of
on retailer scorecards.
developing a set of best practices that can be used in a
variety of transaction structures.
PROVIDE GUIDANCE TO LEGAL
Another member of the Kraft team, Ryan Richard is the Nadine Radomski, manager of E-Commerce Collaboration at
global implementation manager for Kraft Foods’ global data Dean Foods, offers her perspective. “Years ago when working
synchronization (GDS) process. Richard agrees that internal on an acquisition or divestiture, we didn’t include decisions
stakeholders throughout the Kraft Foods supply chain about GS1 Company Prefixes. Then as the industry started
recognize the need to effectively manage GS1 Company adopting GS1 Standards, we quickly realized the huge impact
Prefixes, which in turn, helps to facilitate accurate product data. Company Prefixes had on our business. Since then, we have
worked to educate our people internally about how Company
“Retailers are very focused on data accuracy. Retail
Prefixes identify and help protect our brands.”
executives, at the upper-most levels, are examining
suppliers’ data quality performance via scorecards. That’s Radomski is responsible for data accuracy practices across
why maintaining accurate GS1 Company Prefixes is so Dean Foods and is keenly aware of the role of GS1 Company
Prefixes in data management
throughout the supply chain.
“Our leading retailers demand that
new products coming onto their
shelves be synchronized through
the GDSN. If the GS1 Company
Prefix in the GTIN is not accurate,
we basically can’t sell these
products to retailers who are now
auditing for data accuracy.”
As a leading food and beverage
company in the U.S., Dean
Foods (www.deanfoods.com)
produces a full line of dairy and
soy products. “We do everything
from frozen products to fresh
foods—manufactured, licensed and
4 CASE STUDY: GS1 COMPANY PREFIX BEST PRACTICES—January 2012
“As we globalized our master data
management system on SAP, GS1
Standards helped define and drive our data
governance policies. One of our major data
governance goals is to manage data as a
corporate asset. So as brands are acquired
or divested, if GS1 Company Prefixes are
transferred, generally they are explicitly
included in M&A agreements.” —AILEEN NGO ,
B2B Project Manager, Nestlé USA
efficiencies with our information systems.
Establishing a brand identity with fresh
foods is rather difficult, so we kept the GS1
Company Prefix from the acquired trading
private-labeled. We distribute from warehouse to direct store companies to retain the brand identity in the market.”
delivery,” adds Radomski. “Our company’s complex business
Nestlé USA also has a well-defined GS1 Company Prefix
model mandates a clear Company Prefix strategy to drive
strategy and works closely with its legal organization.
data accuracy.”
As the world’s leading nutrition, health and wellness
To that end, Radomski has documented the GS1 Company company, Nestlé USA (www.nestleusa.com) has developed
Prefix strategy for Dean Foods’ legal department. “Our user strong data governance practices that include managing
guide gives our attorneys direction about whether to keep or GS1 Company Prefixes.
spin-off our Dean Foods’ GS1 Company Prefixes. Our strategy
also includes how we assign Company Prefixes—by brand or
across brands. For example, if a Company Prefix is shared by
multiple brands or multiple dairies within Dean Foods, it is
retained. This will minimize our company’s associated costs,
time and labor.” By working closely with Dean Foods’ M&A
attorneys, Radomski has put the needed requirements in place
for M&A negotiations that support data accuracy downstream.
A GS1 Company Prefix
Harry Geelen, business consultant in Information Services, is used to build all GS1
identifiers like GTINSs,
shares The Greenery’s strategy for GS1 Company Prefixes. which are encoded
The Greenery (www.thegreenery.com) is one of Europe’s in barcodes.
largest trading companies of fresh fruits and vegetables.
Originally a cooperative and still owned by Dutch growers,
The Greenery acquired a number of trading companies in
order to shorten its supply chain by selling directly to retailers.
“We decided to keep individual GS1 Company Prefixes
for each of our lines of business since this helped us gain
“Establishing a brand identity with fresh foods is
rather difficult, so we kept the GS1 Company Prefix
from the acquired trading companies to retain
the brand identity in the market.” —HARRY GEELEN ,
Information Systems Business Consultant, The Greenery GS1 Company Prefix
5 CASE STUDY: GS1 COMPANY PREFIX BEST PRACTICES—January 2012
“One best practice that cannot be overlooked is when the
PLANNING BEST PRACTICES
selling company keeps the GS1 Company Prefix. In this
1. Communicate to all internal stakeholders the importance of case, the buyer must change the GTINs using a different
managing GS1 Company Prefixes to maintain data accuracy and Company Prefix and related GLNs for the acquired
brand integrity. products within twelve months from the close of the
agreement, as specified by GS1 Standards.” —WERNER KOLB ,
2. Develop a strategy for retaining, divesting and assigning
Data Manager, Global Master Data Excellence Team, Unilever
GS1 Company Prefixes.
3. Provide strategy guidelines to your legal department for use
during M&A negotiations.
4. Request of your legal team to explicitly call out in your communicate with trading partners for updated product
M&A agreement: replenishment and product data in the GDSN.
• All GS1 Company Prefixes listed individually by number. Tomassi shares a best practice from a lesson learned from
acquired GS1 Company Prefixes. She found some situations,
• User rights for each GS1 Company Prefix.
from years ago, where other companies were using PepsiCo
• Transitioning timelines for GS1 Company Prefixes Company Prefixes. “We now use and recommend the GS1
going forward. GEPIR (Global Electronic Party Information Registry) to check
GS1 Company Prefix registration as soon as possible after the
close of the agreement.”
Data Manager Werner Kolb with the Global Master Data
Excellence team at Unilever agrees. With 400 brands spanning
“Over time, we have worked with our M&A legal team 14 categories of home, personal care, and food products,
to make acquiring GS1 Company Prefixes an automatic Unilever (www.unilever.com) touches many people’s lives
part of their step-by-step process,” says Jasiri Hibler, around the globe. Kolb advises to make sure that acquired
business master data manager. “Whether divesting or GS1 Company Prefixes are properly registered to the selling
acquiring, our strategy is to always try to keep or obtain company before taking over a product portfolio. Kolb explains,
the GS1 Company Prefix.” “Ideally, this look-up should take place during the M&A
Hibler along with Aileen Ngo, B2B project manager, negotiations process; however, this may not be possible. The
and Pradeep Mogili, data management specialist, are next best time for GS1 Company Prefix look-up would be as an
accountable for educating data owners on Nestlé USA initial step during the planning stage. With help from GEPIR,
data quality standards.
“As we globalized our master data management system
on SAP, GS1 Standards helped define and drive our
data governance policies,” says Ngo. “One of our
major data governance goals is to manage data as a
corporate asset. So as brands are acquired or divested, if
GS1 Company Prefixes are transferred, generally they are
explicitly included in M&A agreements.”
START WITH A PLAN
With the M&A agreement completed,
Tomassi with PepsiCo emphasizes the
necessity for a detailed transition
plan as companies come together
for integrating acquired brands or
supporting divested ones. She is
adamant about the value of a plan that
precisely lays out the needed steps to
transition GS1 Company Prefix, re-
label products with new GTINs, and
6 CASE STUDY: GS1 COMPANY PREFIX BEST PRACTICES—January 2012
“With the re-labeling and packaging changes, we also check
the print quality of the barcode to make sure it can be
scanned properly.” — JASIRI HIBLER, Business Master Data Manager,
Nestlé USA
products, however, it would have caused more time and
work to communicate all those changes to our trading
partners. After weighing our options, we decided to buy the
additional number blocks since this was the best solution for
us and our customers.”
The IT manager from a small apparel manufacturer shares a
similar experience. “We purchased a company that dropped
one of the digits from its nine-digit prefix to generate more
GTINs. We purchased more blocks, but it had a real impact on
our business since our largest retailer had stopped all orders.”
The manager concludes with a best practice for transition
GS1 or GS1 US, you can confirm to whom the prefix is properly planning. “In the future, we will request copies of the GS1
registered to or identify any issues immediately.” Company Prefix Certificates from the seller. We can compare
the actual prefix registered with what is being used in GTINs.”
Kolb believes a complete acquisition or divestiture is more
straightforward than the partial acquisition of a brand. “One In its transition practices, Nestlé USA obtains a list of all
best practice that cannot be overlooked is when the selling products using the acquired GS1 Company Prefixes.
company keeps the GS1 Company Prefix. In this case, the “This is a very important step to actually see the GTINs
buyer must change the GTINs using a different Company included in the sale,” says Mogili. “The GTIN list helps us
Prefix and related GLNs for the acquired products within confirm that all GS1 Company Prefixes are accounted for
twelve months from the close of the agreement, as specified and assess the potential data clean-up.”
by GS1 Standards.” Kolb also stresses to follow GS1 GTIN
Conducting a data audit is another Nestlé USA best practice
Allocation Rules when creating new GTINs with acquired
when integrating acquired GS1 Company Prefixes and GTINs
Company Prefixes.
into its master data management system. The team performs
the audit for all product units, checking length, width, and
EXAMINE PRODUCT DATA
height dimensions along with weight for each. “With the
PepsiCo’s Tomassi recalls a seemingly straightforward partial re-labeling and packaging changes, we also check the
acquisition that held a surprise. “We discovered the Company print quality of the barcode to make sure it can be scanned
Prefix we acquired was an eight-digit prefix versus the six-digit properly,” explains Hibler.
one we thought we had acquired. This assumption resulted
in us using additional GS1 Company Prefix blocks that were TRANSITION WITH PRECISION
still luckily unassigned by GS1 US. When we realized what
Jim Gerbo, vice president of Marketing for DeMet’s Candy
happened, we elected to buy the additional eight-digit blocks
Company describes how he and the DeMet’s team transition
versus re-labeling the products, another option we considered.”
acquired products from typically much larger companies. “We
The best practice: Consider the upstream and downstream never get the seller’s GS1 Company Prefix, which is fine since
impact on the entire supply chain when making decisions we prefer to use one DeMet’s GS1 Company Prefix for all of
about integrating acquired GS1 Company Prefixes. Tomassi our brands.”
clarifies, “In this instance, we considered re-labeling the
Ever since George DeMet opened his first candy store back in
1898, DeMet’s Candy Company (www.demetscandy.com) has
been making delicious candies and snacks. “Producing quality
products is what sets us apart,” says Gerbo. “We bake our own
“The GTIN list helps us confirm that all GS1 Company Prefixes pretzels, blend and cook our own caramel, and source only the
are accounted for and assess the potential data clean-up.” finest ingredients such as premium chocolates and nuts. Using
—PRADEEP MOGILI , Data Management Specialist, Nestlé USA one GS1 Company Prefix allows retailers to easily identify the
DeMet’s brand of quality.”
7 CASE STUDY: GS1 COMPANY PREFIX BEST PRACTICES—January 2012
“We work closely with the seller to jointly develop a thorough
transition plan—what actions we will take, what they will
do and when. We also have a back-up plan for scenarios
that could cause delays.” —JIM GERBO , Vice President of Marketing,
DeMet’s Candy Company
Gerbo’s best piece of advice: Closely plan and execute with
the other company, but always take full accountability. “We
never make assumptions when it comes to transitioning the
acquired brand with our retailers and wholesalers. Our goal
is to move the brand forward, keeping our trading partners
informed and happy.”
TRANSITIONING BEST PRACTICES
With more than 10 years of experience, Gerbo has integrated
acquired products into the DeMet’s family of brands. “We 1. Collaborate with the other company’s team to develop a
work closely with the seller to jointly develop a thorough transition plan with well-defined roles and timeline. Develop
transition plan—what actions we will take, what they will do a back-up plan for scenarios that might cause delays.
and when. We also have a back-up plan for scenarios that
2. Consider the upstream and downstream impact on the entire
could cause delays. Our working relationships with sellers
supply chain when making decisions about integrating acquired
have always been quite positive.”
GS1 Company Prefixes.
The DeMet’s transition team consists of multiple players
from the supply chain: sales, marketing, consumer affairs, 3. Follow GS1 GTIN Allocation Rules when creating new GTINs
logistics and warehousing, customer service, and legal. with acquired Company Prefixes.
“Our sales force typically notifies our retailers and wholesalers
4. Use GS1 GEPIR, the GS1 global look-up tool, to confirm the
90 days in advance of the ‘cut-off date’—this is the date
proper registration of acquired GS1 Company Prefixes. If
when our customers will commence ordering the acquired
possible, this step should be taken before or during M&A
product from DeMet’s and not from the previous seller.” Gerbo
negotiations or immediately after the M&A agreement
stresses the need to take accountability for trading partner
is closed.
communication. “We meet with our customers to identify all
of the products currently carrying the seller’s GS1 Company 5. Notify the appropriate GS1 Member Organization to ensure
Prefix, and provide them with the new GTIN encoded with the proper registration of the GS1 Company Prefixes involved in
DeMet’s GS1 Company Prefix.” the M&A.
Prior to the 90-day window, the DeMet’s team is hard at
6. Obtain a list of products and their GTINs to verify the proper
work making decisions and plans for new packaging. “This
registration of the GS1 Company Prefixes.
is the part that can get tricky,” says Gerbo. “If we run into
packaging delays, this is where our back-up plan is called 7. Request copies of the GS1 Company Prefix Certificates
for. For example, we may change the packaging in two steps from the seller to compare the registered prefixes with the
versus one to meet our cut-off date for our customers. We are generated GTINs.
prepared for several contingencies, just in case.”
8. Audit product data for potential clean-up and
quality assurance.
9. Buyers should take full accountability for effectively
“In the future, we will request copies of the GS1 Company transitioning GS1 Company Prefixes and GTINs with
Prefix Certificates from the seller. We can compare the trading partners.
actual prefix registered with what is being used in GTINs.”
—IT MANAGER , Small Apparel Manufacturer
8 CASE STUDY: GS1 COMPANY PREFIX BEST PRACTICES—January 2012
LEARN THE DETAILS
The “Trade Item Implementation Guide for Mergers & Acquisitions” will help you understand
how trade items registered and published in the Global Data Synchronization Network
(GDSN) are affected and managed as a result of a merger, acquisition or divestiture (M&A).
This comprehensive “how to” guide provides detailed steps to effectively manage and
communicate impacted trade item data with trading partners resulting from an M&A.
The guide also addresses over 10 common M&A scenarios and recommended actions.
Scenario examples include: a partial divestiture/acquisition where a product range
is sold; a company with a single Global Location Number that splits into two new
organizations; a full acquisition that results in a single Item Catalogue and single
GS1 Company Prefix. The guide is available in the GS1 Standards Knowledge Centre at
www.gs1.org/gsmp/kc/gdsn/trade_implementation_guide.
CONTACT US
If you would like to learn more about GS1 Company Prefixes and how to prepare for
a merger or acquisition in the U.S. contact the GS1 US Data Maintenance team at
DMaintenance@gs1us.org or call +1 937.435.3870.
“Retailers are very focused ABOUT GS1 US
on data accuracy. Retail
GS1 US is a not-for-profit organization that brings industry communities together to solve
executives, at the upper-
supply chain problems through the adoption and implementation of GS1 Standards. More
most levels, are examining
than 200,000 businesses in 25 industries rely on GS1 US for trading-partner collaboration
suppliers’ data quality
and for maximizing the cost effectiveness, speed, visibility, security and sustainability of
performance via scorecards.
their business processes. They achieve these benefits through GS1 US solutions based on
That’s why maintaining
GS1 global unique numbering and identification systems, barcodes, Electronic Product
accurate GS1 Company
Code-based RFID, data synchronization, and electronic information exchange. GS1 US
Prefixes is so important.”
also manages the United Nations Standard Products and Services Code® (UNSPSC®).
—RYAN RICHARD , GDS Global
www.GS1US.org
Implementation Manager,
Kraft Foods
CORPORATE HEADQUARTERS
Princeton Pike Corporate Center
1009 Lenox Drive, Suite 202, Lawrenceville, New Jersey 08648 USA
T +1 937.435.3870 E info@gs1us .org
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© 2012 GS1 US™
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