Written by In the world of business, the acquisition of smaller companies by larger corporate entities is commonplace. While often a smart business move for both parties, the risk of alienating customers and losing a brand’s founding identity is a strong concern. When Kellogg’s acquired Kashi in 2000, Kashi was allowed its autonomy for a short while and sales soared until it’s parent company began to encroach on their values, of which the brand’s fans were fervent. Sales declined sharply upon the increased intervention, and the brand is still recovering, in spite of returning to a more independent coexistence with Kellogg’s. Yet, Kashi is just one drop in the corporate merger landscape.
David Gelles paints a different picture in his article “How the Social Mission of Ben & Jerry’s Survived Being Gobbled Up,” which explains the growth of the Ben & Jerry’s brand and ultimate Unilever takeover in 2000. What makes this buyout of a small company by a giant, multinational corporation unique, Gelles states, is the autonomy Ben & Jerry’s preserved in regards to their social mission, a stipulation that was written directly into the acquisition agreement. While likened to a “marriage” that warranted adjustment on both sides from the start, the rocky beginning developed into a dynamic that allows Ben & Jerry’s the authority to advance their own agenda and push back against Unilever policies that contradict their mission and values.
Is this good news for small brand lovers everywhere? Perhaps. While David did not slay Goliath in this example, they did find a way to be allies and to allow for compromise when appropriate. Currently, small, local, successful organic brands are the objects of desire for many large corporations, but are healthy, stable “marriages” realistic? By the time of the acquisition, Ben & Jerry’s was a cultural force with a well-established following; their social mission was largely built into their brand recognition. Not all small brands have this luxury, nor the long history, to provide them the clout to negotiate on a higher corporate level. Will the Ben & Jerry’s/Unilever relationship be an exception to the rule or is this the story of a new model to be applied elsewhere?
Gelles doesn’t answer these questions and that is smart; there remain too many unknowns to make generalizations and predictions regarding the future of acquisitions. Ben & Jerry’s has proven itself an asset to Unilever and, with tripled revenues, they are able to leverage their worth as a company. So long as the shareholders are happy, the marriage is happy. But what of the smaller brands that have similar missions but less brand recognition? The broader question might then be: how much to meddle?
Frequently, when smaller brands are bought out by the larger companies, there is a minor public backlash. Fears of products changing and values being abandoned overshadow the potential benefits of such a merger. Maintaining a relationship with current customers is a key component of a successful acquisition, and part of that is truly understanding what they love about a brand and their products. How do all of the headlines affect consumers when they are actually at the grocery store making a purchase decision? Though they might have just heard that their favorite little company was bought out, if the product they want looks/tastes the same, does the acquisition matter?
Not every small brand is Ben & Jerry’s, but their model is admirable to follow. By recognizing what makes a brand popular and researching their steps forward, larger companies will be able to strategize the extent of their influence in order to increase their market share while minimizing the casualties of the acquisition.
-Mary Dolan O’Brien and Sarah Morrison