Can Acquired Companies Keep Their Cool?
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Recently, Fermentum Group, creator of craft brewery Stone & Wood, was acquired by Lion — a corporate behemoth wholly owned by Japan’s Kirin Holdings Company.
Fermentum is based in Byron Bay, an area Aussies typically associate with sun, surf, yoga, cannabis, and essentially life at one with nature, free from corporatization.
The company’s acquisition is the latest in a long line of craft brewer acquisitions, including Asahi’s acquisition of Mountain Goat in 2015, AB-InBev’s acquisition of Houston’s Karbach in 2016, and CUB’s purchase of surfing icon Mick Fanning’s Balter Brewing in 2019.
The news drew mixed reactions online.
It drew positive responses — mostly from people close to the deal — and negative ones from almost everyone else.
My own response was a little kneejerk and facetious… “well, this is sh*t”.
Is it sh*t though?
Why was that my almost involuntary response?
And why is it wrong for companies to want to get bigger and better and inevitably, make more money?
As an entrepreneur and self-declared unapologetic capitalist, I see no problem with that. Still, my underlying sense was that of a teenage rock fan, bemused by his favorite band’s latest album, screaming “sellouts!”, at the top of his lungs (I’m still getting over Metallica’s 1996 Load album).
In fact, when I simply Google search ‘Fermentum’, the first question that ‘People also ask’ is “did Stone and Wood sell out?”, a term used to refer to the betrayal of one’s principles.
When a craft brewer gets acquired, most people don’t think “good on them, this will be great for their business”. Most people think, “the suits are going to ruin something pure and cool”.
But is this actually the case?
To help answer this, I looked at a number of acquisitions across different industries to see why they worked and why they didn’t.
Did they keep their cool?
Were they worthwhile investments?
Converse, maker of the iconic Chuck Taylor shoe, was acquired by Nike for US$305 million in 2003. The deal was not only a bargain, with Converse today generating over US$2 billion in revenue, but didn’t seem to hurt its brand one bit.
Teenage punk rockers, NBA ballers, Drake…everybody rocks Chucks.
The brand is as cool as ever.
Nike is arguably an uber-cool brand in its own right, so when one cool brand buys another, there is little reason for fans to take umbrage with the decision.
Software maker Adobe picked up Scott Belsky’s creative portfolio marketplace Behance for US$150M in 2012. Its estimated revenue today is US$168.6M, and creatives still use the brand all over the world to showcase their talent. The use of Adobe’s distribution channels helped the marketplace grow its user base at a much faster rate.
Software maker Adobe picked up Scott Belsky’s creative portfolio marketplace Behance for US$150M in 2012. Its estimated revenue today is US$168.6M, and creatives still use the brand all over the world to showcase their talent. The use of Adobe’s distribution channels helped the marketplace grow its user base at a much faster rate.
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To help you avoid stepping into these all too common pitfalls, we’ve reflected on our five years as an organization working on corporate innovation programs across the globe, and have prepared 100 DOs and DON’Ts.
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