The Amboy Street Ventures’ Industry Insights series features a collection of pieces authored by experts in the women’s health and sexual health space.
Introduction to the author – Ute M. Arndt
Ute is an acclaimed Brand and Innovation authority and an expert in CPG and Feminine & Intimate Care. She brings a wealth of commercial experience having worked for some of the world’s leading players across diverse industries including; Essity, Intel and Amazon. Ute is the Retail & Innovation Advisor for Amboy Street Ventures and Commercial Innovation Director at MINT Hub.
Ute was previously the Global Brand Innovation Director at Essity where she successfully spearheaded the transformation of the feminine hygiene category from stain management to holistic V-care, including re-launching the brands and driving innovations that laid the foundation for sustainable market share growth and brand IP in intimate care, underwear and femtech.
Why CPG conglomerates acquire brands
First, let’s understand why CPG conglomerates acquire brands. Some examples of CPG conglomerates are Unilever, Procter & Gamble, Essity and Reckitt. Despite having huge market shares and revenue, they are facing massive challenges such as changing consumer preferences, increasing competition, regulatory pressures and above all, costs and speed to market for innovations. To overcome these challenges and grow their businesses, CPG conglomerates often acquire brands that have strong growth potential, a loyal customer base, unique value proposition, and competitive advantage in their markets.
Here are four factors that position a brand as a desirable target for a CPG acquisition:
Growth potential – CPG conglomerates want to invest in brands that have a
clear vision and strategy for growth, both in terms of sales and profitability.
They want to see evidence of market demand, scalability and how
opportunities create value for their customers. A brand that can
demonstrate consistent growth in revenue and market share, as well as
expansion into new geographies or channels.
Brand equity – CPG conglomerates want to acquire brands that have a
strong identity, reputation in the market and how it is perceived by the
audience it is serving. But above all, how it differentiates itself from
competitors. A brand that has a high level of awareness, recognition,
loyalty, and advocacy among a particular consumer group is more likely to
add value to the CPG portfolio.
Innovation – CPG conglomerates are hungry to acquire brands that have a
culture of innovation and creativity, and complement their existing
portfolio and strategy. They want to see how a brand develops new
products or services, how it adapts to changing consumer needs and
trends, and how it leverages technology and data to enhance its offerings.
A brand that has a clear and compelling innovation roadmap and a track
record of launching successful innovations.
Sustainability – CPG conglomerates want to see how a brand addresses
social and environmental issues, such as climate change, diversity and
inclusion, health, wellness and whether they have a positive impact on
society and the environment. A brand that has measurable goals and
achievements in sustainability and integrates it into its business model,
operations, supply chain and marketing is more likely to align with the CPG
vision.
Of course, there are other aspects that can influence the decision-making process, such as financial performance, valuation, synergies or potential risks. If you have any questions or comments, please feel free to contact me at ute.arndt@wearehpg.com
We look forward to bringing you more from women’s health and sexual health experts in this Industry Insights series. Stay tuned!
