
By Amy Knigge, Practice Director, Digital, Creative & Marketing at Catena Solutions
Key Takeaways:
- Branding is crucial during M&A in the food and beverage industry, with the potential to increase company value by 23% or put 19% at risk if handled poorly.
- Effective brand strategies during M&A include gradual packaging changes, clear storytelling about the merger’s benefits, and choosing between maintaining separate brands, co-branding, full integration, or creating a new brand.
- Companies should involve both internal and external stakeholders in branding decisions during M&A and begin brand planning early to ensure a smooth transition and maintain customer loyalty.
Navigating mergers and acquisitions (M&A) is notoriously difficult, with most deals falling short of expectations. In fact, studies show that 70 to 90% of M&A activities don’t achieve anticipated results. While financial and operational factors are critical, leaders shouldn’t overlook the importance of branding.
In the food and beverage industry, branding directly influences consumer loyalty and market positioning. Neglecting it during a merger or acquisition can lead to confusion, eroded trust, and diminished value. On the other hand, a strong brand strategy can unlock growth opportunities and strengthen market presence.
Read on to explore key branding considerations for M&A success, starting with why branding should be a top priority.
#1: Give branding a seat at the table
Branding often takes a backseat during M&A as leaders focus on operations and logistics. However, branding deserves a seat at the table from the start.
Consider this: A study from the American Marketing Association found that the right brand strategy can increase post-M&A company value by 23%, while the wrong one can put up to 19% of that value at risk. That’s a potential 42% swing directly tied to branding.
Ignoring branding throughout the M&A process can cause major challenges post-deal. Consumers form emotional connections with brands, especially in food and beverage, and sudden changes can disrupt loyalty. Remember that your brand is your direct relationship with customers and give it the attention it deserves.
#2: Make gradual changes to products and packaging
During times of significant change, you’ll want to give consumers reassurance about product consistency. Sudden shifts in packaging or product design can unsettle skeptical consumers and drive them away from your brand.
If changes are necessary post-merger or acquisition, consider introducing them gradually to give consumers time to adjust. This is especially important for packaging, which heavily influences purchasing decisions — 72% of Americans say packaging design impacts what they buy.
Refresh packaging strategically and reassure customers with a commitment to consistency to maintain trust. Additionally, prioritize brand awareness, clear messaging, and reinforcing positive associations. Times of M&A can also be an opportunity for a strategic brand refresh, building on what works and refining what doesn’t.
#3: Decide on a brand strategy
There are several ways to handle branding during an M&A deal, and the right approach depends on factors like brand equity, market share, and consumer loyalty. Common strategies include:
- Maintaining separate brands with distinct identities
- Co-branding during a transition (e.g., “Brand A, now part of Brand B”)
- A full integration right away, with one brand ceasing to exist
- Creating an entirely new brand under a different name
If a company opts for a full rebrand, we recommend transitioning gradually to give consumers time to adjust. Gathering consumer sentiment and feedback can also provide valuable insights into how different approaches will be received.
In the food and beverage industry, we see a mix of these methods. When companies merge, major brands often retain their individual identities that consumers have grown to know and love. For example, when Mars purchased Kellanova last year, they reassured consumers that their iconic snacking brands would remain the same.
#4: Craft a compelling narrative
Storytelling should be a key part of merger and acquisition communications, which is especially true if the chosen brand strategy involves a branding shift. Consumers will naturally question the reasoning behind the change, and it’s the company’s job to reassure them.
When creating communications around the deal, focus on how the merger creates future value. Highlight shared values and be clear about the reasoning behind the change. This will help consumers understand the transition and feel considered in the decision-making process.
For example, when PepsiCo acquired Siete Foods in January, the messaging emphasized expanding positive choices for consumers without compromising taste. This approach kept consumers informed, reinforced why the deal strengthened both brands, and positively positioned the company for future growth.
#5: Engage internal and external stakeholders
One of the biggest mistakes in the M&A process is assuming what audiences and stakeholders want. Making decisions in a vacuum without consulting those impacted can lead to misinformed choices based on inaccurate assumptions.
In the food and beverage industry, consumers increasingly expect a say in brand decisions, craving control, personalization, and transparency. Internal stakeholders, who know your brand inside and out, can also serve as valuable sounding boards. Throughout the M&A process, consider collecting feedback and perspectives from customers, partners, suppliers, and employees.
This input helps shape brand strategy and ensures stakeholders get what they truly want. This is increasingly important, as 82% of shoppers want a consumer brand’s values to align with their own. An added benefit? Innovation. Great ideas can come from anywhere, and you never know what your brand’s next big idea will be.
Start brand planning early for M&A success
In the food and beverage M&A space, preparation is everything. Too often, mergers and acquisitions are finalized before brand strategy is even considered. Waiting that long is a recipe for stress and confusion, especially since finding the right strategy often requires multiple iterations.
In the high-stakes world of M&A, companies don’t get multiple chances to get branding right. A well-planned brand strategy can mean the difference between a seamless transition and a loss of market trust. By prioritizing branding early, businesses can maintain customer loyalty, protect brand equity, and set the stage for long-term success.
Amy brings over 15 years of experience in the digital, creative, and marketing space, having worked directly with clients and candidates during her career. Under Amy’s leadership, Catena Solutions‘ Digital, Creative & Marketing practice delivers best-in-class creative solutions to clients in the food and beverage industry.
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