When do powerful small brands outweigh powerful large brands?
CFO Magazine recently featured an interview with Gordon Stetz, CFO of McCormick & Co., the spice and flavorings company. The article featured a picture of Stetz seated in a grocery store aisle, his head barely visible amid the sea of his company’s famous brands.
The stated message of the piece is about McCormick’s three-part strategy for acquisitions, a sensible approach about which more here: CFO Magazine. What caught The Merger Verger was the unstated message of the photograph, the visual evidence of the company’s branding strategy post-acquisition.
Now, McCormick dates its history back to 1889 and its red and blue “Mc” logo is recognizable in every supermarket, convenience store and bodega across the land. Success like that often leads companies to a kind of ego-driven branding myopia. “We are the great and powerful _______.” (Fill in the blank.) “We have the market power; everyone knows us; the value of our brand will add so much to these little guys.”
The picture of Stetz tells a thousand words about McCormick: we buy brands because of their power not merely because of ours. If you purchased names like Zatarain’s or Lawry’s or Old Bay Seasoning and had to bring them into the fold of your huge and powerful uber brand, what would you do?
One of the toughest decisions a business person faces is the one to not do something bold. We are bred for boldness, steeped in a culture of advancement, rewarded for our actions. What idea is there that cannot benefit from our improvements?
In such a culture – magnified by the immense time pressures of integration – it takes both courage and objectivity to say, “No, I think we should just stay the course on this one.”
Is your integration process at risk of rushing headlong into failure? Keep in mind the important step that McCormick seems to have mastered: stop and smell the fines herbes.
Afterword: “stay the course” does not mean “do nothing.” As a powerful, branded acquirer, there can be any number of actions to leverage a newly acquired smaller brand while leaving that name intact. But those actions are all subordinate to the larger strategic objective of retaining the basic value that your company paid so much to obtain.