Tuesday, September 9, 2008

Picking a Buyer for Your Brand - The LÄRABAR Story

Let's say you own a small yet growing brand but unfortunately lack the resources and infrastructure required to help the brand become more mainstream. However, you've recently been approached by a large manufacturer who has offered to purchase your company. This manufacturer will be able to take your brand to the next level. Should this be a no-brainer decision? What do you do?

In this entry I decided to briefly talk about a few major things a brand owner needs to consider when deciding whether or not to sell its name/products to a larger company. A perfect example of such a case is Humm Foods, makers of LÄRABAR and founded in 2003 by Lara Merriken. LÄRABAR had been pursued by several larger manufacturers in the past. However, in June of this year, Merriken finally agreed to sell the company to Minnesota-based General Mills (Merriken will remain on board as LÄRABAR's Creative Director). I happened to stumble across an interview from July with Merriken on
http://www.welikeitraw.com/, a site managed by Dhrumil Purohit and home to raw foods enthusiasts.

For those of you not familiar with LÄRABAR, it is one of the few snack bars out there only consisting of a couple of ingredients. For example, the Cashew Cookie bar contains only dehydrated dates and cashews. Each type of LÄRABAR is made up of simple ingredients (dried fruit, nuts, spices), are a good source of fiber, provide omega-6 fatty acids, and contain no added sugar or preservatives. They are sold as single serving, healthy snack bars.

When the sale of Humm to General Mills was announced, many members of the raw foods community seemed concerned that the product, brand, etc. might change and took this announcement as very bad news. However, in reading the interview with Merriken, I thought this was a perfect example of well-thought out decision-making in considering what impact the sale could have on her brand and its products. Merriken took into consideration three
major factors (amongst other things) when deciding to sell her company/brand:
  • What is your brands' vision? Will selling to this company help your brand achieve its vision? - In the case of LÄRABAR, the brands' vision is to help enrich lives by giving people access to wholesome foods. General Mills helps LÄRABAR achieve this by providing them with a wider distribution base and the ability to increase production.
  • What are your brand's values? Does the company interested in purchasing your brand hold the same values? - Merriken states that General Mills "really 'got it' and 'got us.'" In other words, General Mills holds similar values regarding natural, organic, and healthy food offerings through their Small Planet Foods division which has been around for almost 10 years. (General Mills also has expertise in reaching consumers and changing to meet their needs/wants based on the fact it has managed to stay in business since the 1800's).
  • Will selling your brand change its image? - Since General Mills does not plan to change LÄRABAR's ingredients, name, etc. in any way and Merriken and her 25 employees will be joining General Mills with Merriken holding the Creative Director role for the division, there is little risk of LÄRABAR losing its strong brand image.

Excerpts from the "We Like it Raw" interview are listed below (for the full interview, click here); A press release related to the sale of Humm to General Mills can be found here.


Dhrumil: LÄRABAR is the most successful raw food bar. Your products are in so many stores and you have such a wide reach. So why did you sell?

Lara: I started LÄRABAR because I’m passionate about healthy eating and how it can enrich everyone’s life—not just the lives of those deep-rooted in the raw and natural foods communities. I believe the whole world, people from all walks of life, should have access to wholesome foods. There is no better company on the planet than General Mills to broaden the access to LÄRABAR worldwide. We feel proud about the job we’ve done growing our business, and we’re equally proud that General Mills has recognized the magic of LÄRABAR and, through its tremendous resources, wants to take us to a higher level and a greater reach that we could have never achieved on our own. Reaching people is what it’s all about. Natural, organic and raw food should not be a luxury for only a certain group of people. At LÄRABAR, we’re committed to sharing knowledge about positive food choices, improving not only the lives of people who enjoy our products, but also the lives of farmers who grow the quality ingredients that go into our products. That commitment will never change.

D: A few vocal voices in the community have raised questions about General Mills specifically. They feel that their products are not in alignment with the raw food movement and by selling the company to them you're "selling out." What does General Mills bring to the table that empowers the mission of LÄRABAR. Why go to General Mills or why did they come to you? Did you ever consider going to other companies?
L: LÄRABAR, over the years, has caught the eye of a number of large companies. But it was General Mills who really “got it” and “got us.” In the end, the caliber and integrity of its people really won us over. It’s impressive to consider that General Mills has been around since the 1800’s, and you don’t stick around that long without understanding and, more important, respecting the ever-changing needs of your consumers. In 1999, General Mills launched a new division of its company called “Small Planet Foods,” dedicated to natural and organic foods. You probably have seen its brands in grocery stores: Muir Glen and Cascadian Farm. LÄRABAR will be part of Small Planet Foods, and we’re thrilled to help expand more natural and organic food offerings available in stores.

D: Did you ever have any concerns that selling to a public company like General Mills would jeopardize the LÄRABAR product line?
L: No concerns whatsoever. I believe “stewardship” is a better word than “ownership” in describing the involvement of General Mills with LÄRABAR. This is my baby, and I would not have turned it over to just anyone.

D: This is the first major sale of a primarily raw food company to a larger public food company. You and your team are paving the way and a lot of people don't know whether they should be happy or concerned because this is all so new. Do you see this as a growing trend? Do you see more mainstream companies wanting to get involved in raw food products? Is this good for the overall health of the country.
L: Consumer awareness about the importance of good food choices really began to grow about a decade ago when retailers—both natural and conventional—started understanding and catering to the wave of the future. And what a great thing! I’m humbled to know that LÄRABAR is truly making a difference in the quality of people’s lives; the more people, the better. Is this a growing trend with other companies? I hope so!

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