Mergers and Acquisitions

Lately I’ve been reading a lot about mergers and acquisitions in the food industry and I begin to wonder does that news travel to the consumer who is buying the product or do they even care that one company bought another?

Some recent mergers and acquisitions that come to mind are Hormel’s purchase of the Justin’s brand, Amazon’s purchase of WholeFoods, Dr Pepper and Keurig’s merger, and Dr Pepper Keurig’s purchase of CORE water brand. All these business transactions can shape the products you buy and their availability. Are all these business decisions good?

Why do companies do this merger and acquisition? I’m sure most of you have heard about the changes at WholeFoods due to Amazon’s purchase-some good, some not so good but one thing that Amazon definitely did was cause a disruption in the grocery industry which was stagnant in innovating. This innovation strategy is why many companies acquire or merge with others. A large company like Campbell’s or General Mills doesn’t always have the resources to innovate or perhaps they do but because of their established name and product portfolio can’t convince you, the consumer, to buy the new healthy product so what do they do? They go and find other companies that are doing that well and are a fit for their new strategy.

If a small company that you consider healthy with a good message is absorbed by the larger big food company is that good or bad? I guess it depends on how that larger corp treats the smaller one. If everything is kept the same and the smaller company is allowed to do business as usual, than the brand shouldn’t be altered but if the larger company tampers with the innovation to make it fit corporate culture, now the brand is diluted which may impact what you buy. Of course, the upside is that a big company can provide more resources and money to develop a brand but again it will depend on why they bought that brand and the direction it leads.

As a consumer, as long as the product that I buy is still available and quality has not suffered, it doesn’t bother me if one brand is bought by another. For me, price, quality, and availability are key.

Does it matter to you who owns your favorite brand?