M&A Tactics Evolve to Maintain ‘Local’ Rep of Small Brands

Small brands with a strong “local” quality and Big Food companies that want a stronger regional presence both have an incentive to maintain a product’s integrity after acquisition papers are signed. The startup wants to be reassured that the product they developed from scratch won’t be cheapened or their ability to innovate and develop new products lost. The buyer wants to keep the product’s loyal customers happy so they keep buying the item, or else it just bought a company that is losing sales and customers.

One way to do this is to keep the innovator, and often owner of the startup, involved after a new company takes over. Justin Gold, founder of Justin’s nut butters, did just that — and recommends other startup owners maintain a presence after a sale as well.

“It’s a marriage, and you wanted to make sure if you get married to someone, that it’s forever,” Gold told Food Dive last year. “When I look back, I think we made all the right decisions. Hormel has been great at keeping to their word and keeping us separate and letting us stay a mission-based organization.”