A Balancing Act: Does getting acquired tarnish the health halo of better-for-you brands?

A recent trend in the food and beverage industry has been the acquisition of smaller, niche health brands being acquired by large food corporations. An example lies in Dr. Pepper Snapple’s recent acquisition of Bai Brands, a beverage company known for its antioxidant-infused drinks. These acquisitions are extremely complicated and can either be hugely helpful or extremely harmful to the larger brands. When a conglomerate acquires a smaller company that exists in a niche realm, it is essential to integrate that brand into the portfolio as seamlessly as possible. Fans of these smaller brands can be easily turned-off by the presence of a large one.

Vivaldi Partner Marie Chan was interviewed by Food Dive in their coverage of branding challenge. She commented on the difficulty of considering acquisitions: “With portfolio strategy, the BFY brand should have a clear role – meeting a different need-state, catering to a different consumer, offering different functional features/benefits, playing in a new daypart and/or new channel – to minimize cannibalization and brand overlap. Brand architecture is equally important. You must give consideration as to how much or how little emphasis will be placed on the corporate brand.” As a result, attention to consumer attitude, carefully constructed branding and well-placed (or not placed) advertising are all keys to success.