- As more major manufacturers acquire smaller manufacturers, the dynamic reveals opportunities for both sides to learn from the other and improve operations.
- Major manufacturers offer startups capital, industry relationships, distribution capabilities and networks, and production capabilities and/or equipment to increase volume. Startups, however, can teach major manufacturers about speed-to-market, innovation, and marketing, Jeff Church, co-founder and CEO of Suja, said during a presentation at Natural Products Expo West.
- Without the resources of the larger company, a startup may never make the same impact on the food industry. A larger company has a much better opportunity and the resources to make organic foods more accessible.
General Mills has been one example of a major company that has worked out this dynamic. General Mills offered Annie's the manufacturing and technical resources it needed to help Annie's expand its portfolio into organic varieties of soups, yogurts, and cereal. Annie's has still retained its homegrown image and is a leading organic brand in both health food and conventional grocery stores.
From other companies' successes, major manufacturers can learn they don't have to micro-manage acquisitions for them to become successful. A more hands-off approach ensures a better relationship. The startup can operate the way it always has while benefiting from the larger company's resources.
Smaller manufacturers can learn that being acquired does not necessarily mean facing consumer backlash for "selling out." A larger acquiring company doesn't have to force its methods on the startup, as long as both companies are clear about what is expected of each at the time of negotiations.