Bigger brands have always bought smaller brands that succeed or invested new technologies that have potential. It is part of the model that enables brands to add economic value through scaling great ideas or integrating them with a strong brand to extend their value or reach.
In recent years almost all the large brand owning businesses have added a new approach to this challenging activity. They have created venture capital groups and funds that enable them to partner with entrepreneurs and invest in leading edge businesses much earlier in their journey, allowing them to evolve before they potentially become integrated into a large, multi-national business.
It is looking increasingly like a win-win model. It supports entrepreneurs and new brands whilst they learn and grow, and it gives big established businesses a way to explore new territories and ideas and learn about new ways of working. Given the expertise of the likes of P&G, Unilever and Kraft Heinz – primarily in understanding consumers and building brands – it also offers the entrepreneurs an added benefit in potential access to input they would not get from a standard VC relationship.
This reflects how brands are responding to a fast-changing world where small entrepreneurial businesses can do great things and bigger brands need to approach collaboration in new ways to unlock the future opportunities that brands have always been best at managing. Here are a few examples:
P&G Ventures Studio is exploring a range of new health and beauty spaces:
- ZEVO: eliminate Bugs without Harsh Chemicals!
- OPTE: an all-in-one Precision Skincare device for hyperpigmentation treatment
- KINDRA: menopause – Estrogen-free* peri/menopause product range
Evolv Ventures backed by Heinz is exploring a range of product and retail spaces:
- KUMANA: a range of Venezuelan-inspired, avocado-based hot sauces
- VBQ: a plant-based barbecue range of alt-meats and sauces
- THE FERMENTOLOGIST: researching pickled and preserved vegetables and milk products – suggesting Heinz is looking to capitalise on the gut health trend
- HEINZ BEANZ BURGERZ: it’s not just about new brands, this NPD came from this work.
- PERIOD: a Cocoa-based drink “designed to support you & your body during the hormonal cycle”.
Unilever Ventures is exploring food, beauty and new digital technologies:
- GOUSTO – leading brand in the meal kit market
- BLOW – expert hair and beauty services delivered at home
- CURLSMITH – a range of natural products for curly hair
- CLAVIS INSIGHT – experts in digital commerce
For brands, sustaining reputation is an imperative and that requires continuous innovation, though that requires investment and is high risk. Being innovative goes well beyond the R&D experts, keeping up with new technology, continuously improving product performance and remaining relevant to the needs and preoccupations of individual consumers. Adopting innovative approaches to innovation is part of the story.