Big Food’s Brand Reckoning: Why Scale Isn’t the Same as Resonance

Consolidation has long been a key growth strategy across retail and CPG. Big companies have spent decades buying up competitors, acquiring niche brands, and expanding into new categories. Why? Ideally, a large, varied portfolio would drive scale, diversification, market share, consumer trend alignment, and business growth. But as the industry evolves, are portfolio cracks starting to show?

Today, many organizations that grew through acquisition sit on a plethora of brands that overlap, overly differentiate, or underperform. Big conglomerates now realize you can't use traditional CPG growth methods (e.g., increasing distribution, merchandising tactics and promotions) to scale up niche, emerging brands. Instead, they need to preserve the unique aspects that made the brand so resonant in the first place.

Over time, a portfolio review in which growing companies constantly evaluate their subsidiaries becomes crucial. Kraft Heinz, WK Kellogg, and PepsiCo are just some of the powerhouses that have already begun rethinking their portfolios. A disorganized portfolio isn't just a product problem; it’s bad brand architecture, too.

When Consolidation Doesn’t Equal Growth

Consolidation often sees large CPGs buy smaller companies to expand their portfolios, capitalize on market trends, or mitigate competition. Think PepsiCo moving deeper into snacking and energy. These acquisitions are about focus shifts, expanding category breadth, and owning more of the shelf by mitigating higher-tier, niche or premium competitors. And they also bring across those brands’ loyal customers, increasingly capturing the mindshare of consumers.

On paper, it all makes sense: buy a company with 20 percent distribution and, in theory, plug it into your supply chain to reach 100 percent. This efficiency and buying power looks great on a spreadsheet, but the brand story often gets lost in translation. The acquirer needs to ensure that the narrative and resonance that made their newly bought brand a success is sustainable at scale. Otherwise, portfolio managers are left asking, “What's the brand’s purpose and positioning? How do we communicate and market to our consumer targets? And how do all of these brands work together?”

Modern CPGs are struggling because the way they're trying to grow market share is outdated and defensive. New brands appeal to consumers through different avenues — social media, direct-to-consumer behavior and guerrilla marketing, for instance — and they're better at it than many large companies. Also, brands need to consider what the retailer’s strategy is. Many retailers are being selective about the amount of brands on their shelves and they’re also heavily investing in private-label brands.

While conglomerates will regularly throw smaller brands into their distribution machines, it shouldn’t be the only strategy. They need to make sure the brand story resonates in new markets with new consumers and in new distribution channels. Product, price, and promotion, the old business school Ps, aren’t enough anymore. Today, you need proposition, purpose, and a point of view that ladders up to something consumers care about.

Retail’s Own Reckoning

Retailers face a similar dilemma. There are a lot of acquisitions in the grocery and wholesale sector as well. Many grocers boast well-developed private label portfolios that can be impacted by an acquisition. Companies like Albertsons, Ahold Delhaize, and C&S have made significant acquisitions. These wholesalers and retailers all have similar products in their private label portfolios (yet different brands). But each consolidation should still prioritize a thorough review to understand category, customer trends, and consumer acceptance of brands, to determine which ones remain and which ones go.

For instance, imagine your retailer owns a handful of brands spanning 5,000 products, and your new acquisition partner has another handful of brands with 5,000 products … many of the products the same or similar. Now, you’ve doubled your warehouse needs, your SKU count, and your operational costs. Suddenly those efficiencies you expected start eroding.

The question becomes, do you keep all those brands? Do you consolidate? Which brand better fits the new combined trade area? Which resonates more with the consumer? And which manufacturer can produce at scale while maintaining quality? The ultimate question is, what brand do I need and what's the right brand to keep?

That’s where brand architecture comes in. Retailers need to evaluate their entire portfolio, brand by brand, product by product to understand what equities they have and how they’re perceived by their customers. They must really grasp their equity, or lack thereof, with their customers. Then they must decide what stays, what goes, and what gets rebuilt from scratch to create something new.

How to Know When Your Portfolio is Broken

Clear warning signs of a bloated or misaligned portfolio include distribution and sales performance as well as consumer relevance. If you’ve got multiple brands in the same category, with varying penetration levels, you may have a problem. It could be a product or category issue, but often the obstacle could be the brand itself.

Duane Reade’s reinvention is a classic case in point. Years ago, the drugstore chain repositioned itself in the marketplace around the idea of "New York living made easy." The retailer was very deliberate about creating brands that spoke to New Yorkers, and its private-label penetration grew significantly. This success caught the eyes of category leader Walgreens, which bought out Duane Reed and its New York brand residence.

However, the positioning and brand strategy of Duane Reade wouldn’t resonate on a national scale as it was so specific to a single market. Therefore, Walgreens had to re-evaluate the portfolio architecture, with New York City-focused private-label brands like Delish repositioned to a nationwide tone of voice and the skyscraper-branded value range scrapped entirely.

These decisions were based less on product and duplication, and more on which brands would resonate. Ultimately, the portfolio’s reshaping rested on market, competition, category, and consumer — the key metrics of any brand positioning.

The Real Work of Brand Architecture

Whether you’re in CPG or retail, the pattern is the same: acquisitions are often treated as financial, defensive, or logistical growth moves. Most retailers do incredible due diligence on the product side, analyzing sourcing, suppliers and costs. The same rigor around brand positioning, brand architecture, and resonance with the consumer will only ensure the success of a consolidating or acquired portfolio.

In a world where scale is easy to buy but brand purpose requires a different perspective, the winning companies will be the companies that treat brand architecture as the backbone of growth. Acquisition can buy you distribution, but it can’t buy you relevance. Portfolio efficiency can improve margins, but it can’t build loyalty. Brand architecture, done right, can do both.

Todd Maute is principal at CBX, a brand strategy and design agency.