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Why are so many big brands scooping up smaller ones?

“Authenticity” is the branding buzzword of the moment, and industry giants are acquiring smaller competitors to get it

Forget tech startups—microbreweries are the hottest thing to acquire these days. On both sides of the border, beer industry giants are snapping up makers of craft suds. Labatt Breweries—the AB InBev-owned Canadian staple—has been particularly active, buying up Toronto’s Mill St. in October and Vancouver’s Turning Point a month later.

The frothy market for microbreweries is part of a broader trend of large conglomerates buying up niche brands. Blame millennials and their desire for “authenticity,” that branding buzzword that means some combination of a compelling backstory, irreverent marketing and anti-consumerist values. “There tends to be a naive freshness to these brands,” says Thomas Pigeon, chair and founder of Pigeon Brands. “They have a surprising look to them—they sure as heck don’t follow all the branding conventions. There’s a special magic dust of excitement.”

Established companies like AB InBev can’t manufacture or develop that kind of connection with young consumers on their own. So they buy it instead. “They’re largely vested in brands built up over decades, with conventional advertising and relationships with consumers,” says Pigeon. “The marketplace is getting turned upside down so fast in so many categories that it’s pretty hard for some of these big brand owners to turn the ship fast enough to respond.”

Acquiring an upstart provides a path into hot, niche markets and a ready-made product to service them, which a conglomerate’s R&D and marketing systems would need years to reproduce.

Here’s a look at five “authentic” brands that were bought out by giants, and how they fared post-acquisition:


When: February 1993
Acquired By: Frito-Lay
Price: Undisclosed

What Made it Special: “Miss Vickie was a very real person who produced provocative and interesting flavours that were different than offerings from the conventional bigger brands of potato chips,” says Pigeon. “ moved into a new category in its day—the kettle-cooked chip category—which conveyed authenticity.”

Reaction: The new owners left Bill and Vickie Kerr in charge of the arm’s-length company and consumers barely noticed.

What’s Happened Since: “Great brand acquirers fully understand what they’re buying,” says Pigeon. “We were involved in the first design modification after Frito-Lay acquired the business. It wasn’t designed to completely redefine the brand. It was designed to just fine-tune the styling, colours and visual language of the brand so it was a little more appealing and differentiated at shelf-level.”


When: April 2000
Acquired By: Unilever
Price: US$326 million

What Made it Special: “Until Ben and Jerry’s, ice cream was this indulgent dessert product that you would buy at your local grocery store that had wonderful, appetizing images on it,” says Pigeon. “Ben Cohen and Jerry Greenfield had this wacky, irreverent style with their crazy cows on the package.”

Reaction: The unusual terms of the deal won praise. They included maintaining the company’s donation of a percentage of pre-tax profits to charity and giving Cohen US$5 million for a VC fund in low-income communities.

What’s Happened Since: Instead of changing to suit the conglomerate, Ben & Jerry’s seems to have accelerated a shift that was already underway at its new parent company. Unilever launched a Sustainable Living Plan in 2010, and has made social good one of its explicit business objectives.

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