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#Trendspotting: Supplier Shake-up – Navigating Change and the Impact on Brands in the Face of Mergers and Acquisitions

Even though companies have been behaving under the notion that we’re better and stronger together, the pandemic breathed new life into this idea. It remains an undercurrent in a lot of what we experience today – mergers and acquisitions being no exception, as companies become bonded and often strengthened. Whether the intent is to expand reach, grow into new categories and markets, increase market share, support a succession plan, or simply survive in an increasingly competitive world, mergers and acquisitions help keep our economy moving, while keeping the rest of us on our toes. Within the flavor and ingredient industry, we’ve witnessed strategic alliances and consolidations designed to expand portfolios, gain expertise, push innovation and novel technology, and maximize profitability.

Recent M&A Activity

The Upside

If you’re working with a company that acquires additional capabilitiesfacilities, or ingredients, you may have some unrealized gains

Imbibe Lab

Advantages can include:

  • Access to new and specialized expertise 
  • Access to novel and disruptive technology  
  • A larger selection of items from an expanded portfolio 
  • Economies of scale driving costs down 
  • Increased R&D capabilities 
  • Supply chain improvements 
  • Shorter project timelines  

The Downside

Disadvantages include:

  • Depending on the size of your business and the new entity, it may be harder to get a hold of the best person to deliver the support you need 
  • Lack of individualized attention to projects, customization, and flexibility 
  • Increased costs as consolidated financials are evaluated, new pricing strategies roll out, and fewer entities to offer competitive pricing 
  • Offerings may change as companies evaluate new opportunities and next phase of growth 
  • Slowed pace may be informed by additional rigor or red tape due to larger size and/or additional policy and process implementation 

 

Have you encountered any challenges resulting from M&A activity of a flavor or ingredient supplier? We’d love to hear about your experience and learnings. Was there more of an upside or downside?

Something to keep in mind when moving forward with the optimization of your current portfolio or expansion into new categories is the value in collaborating with agile partners. As a reliable and responsive supplier of flavors, taste modulation ingredients, and sweeteners designed for our product development team and often distributed directly to other product development teams, Imbibe is focused on maintaining that human connection for every project we touch, whether we’re working with the brand directly, through a co-man, or an ingredient supplier. Don’t get lost in the chaos – with Imbibe’s expert ingredients and guidance, you’ll get great tasting products that fit your planned timelines. 

Check out more on #TRENDSPOTTING, or visit our blog.

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