7 crucial tips for successful small brand acquisitions7 crucial tips for successful small brand acquisitions
The resident growth strategist at goodDog has some sage advice for Kraft Heinz's Springboard and other emerging big brand accelerators.
December 7, 2018
To: Springboard and other Big Brand Accelerators
Fr: Max Kabat, growth strategist, goodDog
Subject: Platform Brand Mania
Memo: Big companies buying small brands for growth. It’s nothing new or different. But stagnating legacy brands and shifting business fundamentals have forced multinationals to swim further downstream toward smaller, more nimble companies to provoke consumer excitement and engagement.
To justify this change, the phrase "Platform Brand" has emerged as a catchall for the endless possibilities of what growth might look like if a smaller brand could get their hands on the scale that large, storied companies offer. The most recent conglomerate Platform purchase was of Primal Foods by the freshly minted Springboard, which is a part of Kraft Heinz. It’s a founder-built brand with a great story, a feverish fan base, a content engine, a personality, and some great product hits. All the makings of a solid foundation.
With this being your acquisition coming-out party, on behalf of the folks in the Natural and Organic F&B trenches, I wanted to wish you, Springboard, the best of luck. As growth strategists, we’ve seen similar transactions from both the pre-sale and post-scale point of view–Hershey, Conagra, Campbell, Danone, and JAB, amongst others. So, what follows are some observations and lessons we’ve learned that might help you all this first time around.
Everyone isn't good at everything—use the right people for the job. Some people are great at coming up with ideas and getting them into market, while others know how to take it from niche to national. Go find the folks in the ecosystem outside your four walls that helped build truly successful brands during the stage that Primal is in and put them to work. Let them work in their sweet spot. Watch and learn.
Acting small and being small are not the same. Understand what it means to be small and scrappy. The industry is chock full of folks that have lived through past purchases that have seen the good, the bad, and the ugly. People want to help because they truly believe in a better food future. Engage with them because they know that engaging with you is part of the puzzle.
Don’t smother the baby. I can only imagine how many internal folks want to get into the action. Act like a parent that protects the keys to the weekend car. No matter how much due diligence you do, inevitably their systems and your systems aren’t one and the same. Procurement may not be in their vocabulary. Scrappy field marketing might not be in yours. Don’t force both teams to adapt right away. It might cause slower growth and will send the wrong message. Think “enable” rather than “adapt.”
Define what a Platform means. Some view Primal as a condiment brand. Others might know it for their newsletter. Scale and long term growth, especially pulling it through the Kraft Heinz way, is going to come from focus, not from scattershot category SKUs and trying to land grab for more shelf space. Who is Primal truly for? What has driven brand love? How do you make it more mainstream? Is it just for paleo people, Keto, and/or Whole 30 or is it more than that? Strategy is the art of sacrifice, so do the work and plant a flag before pushing scale. The more you can hone in on the growth consumer and cater the brand and business to them, the better chance you’ll have at keeping momentum.
Plan for the Brain Drain. After purchase comes well-deserved celebration. Then, no matter what you do, some of the folks that helped make this investment so attractive are going to disappear–investors, worker bees, management, founders–because their version of success has most likely been achieved. Prepare for it. Plot a course now so that when the OG’s start to leave, it doesn’t weigh down the culture or the growth. Be on the offensive.
Don’t strip the brand’s special sauce in the name of growth. Yes, you need to appeal to a mass market to continue to drive velocity and scale. Yes, you will need to make the most of your investment and appeal to shareholders. However, making sacrifices as you ramp up production in the name of better margins and efficiency might make the brand less special to the core fan base that got the brand to where it is. If they’re feverish, they’ll know when the formula changes or the package has less ounces. If you leave them in the wake, you’ll be fighting an uphill battle and be on promo before you know it. Do not confuse this with pivoting to a growth consumer.
Build a success roadmap. It’s a bit existential, but it’s important. Your stakeholders are the same as the rest of Kraft Heinz but you’ll be doing business differently with this one. If earnings and share price continue to suffer, what does that mean for Primal and for Spingboard? Will you, too, have to make sacrifices? If so, how will you approach it? There are countless examples of darling disruptors whose growth was stymied not because of the brand or the people but because they became sacrificial lambs as the overall health of the parent company suffered.
A healthy, continuously growing brand won’t just come from squeezing out a better margin. It’ll ultimately come from focus. There’s so much knowledge out there about moving the brand and business forward. Be inquisitive. Be open. Dream. Ask for help from those that have been there. That’s how these Platform Brands got started and found their success.
Max Kabat is the co-founder of goodDog, which focuses on helping companies move from product to brand by driving mainstream, conscious consumer growth through meaning.
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