Tea and Coke

An interesting piece on how organic beverage company Honest Tea might fare as part of the Coke empire. As is observed here, so often these brand acquisitions are a disaster. The very essence of the brands that saw them lapped up in the first place is squeezed out by multi-nationals in their hunt for a return on their investment. Unable to act as quickly as they had when they were growing on their own, and often without the inspiration and commitment of their entrepreneurial founders, the brands quickly wither.

Doesn’t seem to have happened in this case. At least not yet. Powered by the massive production and marketing muscle of Coke, Honest Tea’s sales have skyrocketed. But their key challenge going forward will be to keep customers convinced that Honest Tea has not been compromised ethically; that everything the brand stands for, and believes in, the promise inherent in its name, still holds and that their new master will continue to allow them to hold and espouse their own views.

Opportunities and challenges for Coke too: the chance to continue to diversify out of the embattled high-sugar soda market into the healthier product lines that young and affluent consumers seem to be gravitated towards, whilst resisting the almost instinctual urge to simply throw a scale approach at this niched product and hope it will stick. The formula that works for sweet drinks needs more than a little tinker to migrate to tea.

Allowing individuality and authenticity to flourish is counter-intuitive to the command-and-control style of many motherships. But if brand diversification is to work it needs to be just that: the opportunity for a brand portfolio owner to embrace and encourage a range of approaches and philosophies – each specifically suited to the personality and customers of the brand. Ultimately that is what continues to cultivate loyalty and engagement. That’s what helps the brand feel that it still has a life and a value of its own. Anything less delicate, and the acquired brands can be quickly smothered in a formula that leeches the honesty from them.

The sign of a successful buy-up is that it doesn’t feel like a sell-out … for either party.


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