• by Manfredi Ricca , Yesterday

In a $48.7 billion deal, Kimberly-Clark agreed to acquire Listerine, Tylenol and Band-Aid manufacturer Kenvue joining KC’s household staples from Kleenex and Huggies.

This move marked a sharp change in trajectory for Kenvue, which spun off from Johnson & Johnson in August 2023. Since then, Kenvue has struggled to gain any momentum leading to a 35% decrease in share price since their IPO compared to J&J’s 13% increase.

What appeared to be a clean break-up evidently saw one partner better off in the long run. So what happened at Kenvue, and how can Kimberly-Clark revitalize these struggling brands?

What went wrong at Kenvue?

Kenvue inherited a star-studded portfolio from J&J including Tylenol, Motrin and Listerine. This should have set it on a steady, successful course, but its status as an independent company revealed challenges that affected consumer and investor confidence.

Litigation, especially related to talc-based Johnson’s Baby Powder, cast a shadow over the company. Recalls on children’s medicine and eye drops further eroded trust. Uncertainty and negative headlines plagued Kenvue from the offset.

Though well-established, Kenvue’s brands have seen little meaningful innovation. The portfolio was caught between the expectations of health-conscious, ingredient-savvy consumers on the one hand and aggressive private-label competitors on the other, making it difficult for the new company to establish a meaningful narrative.

Meanwhile, cost pressures squeezed margins for Kenvue’s mature brands, struggling to generate the kind of growth investors look for. Being a household name implies recognition, but it doesn’t mean you’re getting plucked off shelves.

As a portfolio, Kenvue brands lacked the scale to fight the efficiency game as well as the momentum to command premium valuations.

The J&J success story

Johnson & Johnson flourished post-split. Freed from the slow-growth consumer health segment, J&J concentrated its efforts on the higher-growth pharma and medical device business. J&J tapped into the profit pool of what we call the Thrive Arena: a competitive space where different categories and assets, including tech and science, collide to deliver wellbeing as well as life- and health-span.

This strategic focus allowed it to concentrate on new drug launches and pipeline advancements. Investors reward J&J for its clarity, innovation and higher margins found in healthcare and biopharma.

Is a Kenvue turnaround on the cards?

Kimberly-Clark is a giant of consumer staples, with deep expertise in brand management and operation efficiency. The deal offers significant opportunities for synergies, supply chain optimization, and cross-brand marketing. But scale isn’t everything.

To rejuvenate Kenvue’s brands, Kimberly-Clark needs to act quickly. Through reformulations, new product lines and digital-first engagement, Kimberly-Clark can find new relevance and reverse the lack of consumer confidence.

Restoring trust after recalls and litigation also requires transparent communication and visible, renewed product investment. Kimberly-Clark will most likely focus on health and wellness products, as every consumer is becoming their own health scientist, researching ingredients and formulas. 

The acquisition signals a new chapter of consolidation in consumer staples. Done successfully, we could be witnessing the rebirth of a whole category. With legacy brands now under new ownership, the point is less about what these products have been -- and more about what they can become.