Case Study: Mergers & Acquisitions - PJ Smoothies
The strength of emerging brands is being the disrupter within established markets. This agility is often the envy of the market leaders but what does this look like?
The complete decoding of the Consumer Experience.
Building the ‘Taste Signature’ of great products.
Finding the parameters for NPD to maximise appeal.
M&A & PJs
No, not a piece about TLAs ( three letter acronyms) rather a practical application of the EP approach IRL (‘Stop it!’ Ed.)
So back in the circa 2006 we did some work for PJ Smoothies – an emerging brand in the new Smoothies market, a market which had largely been pioneered by Innocent.
PJs were a bit of a disruptor brand but with some great products. The brand wanted to understand their own potential – why were some of their lines so much more successful than others, how did they talk about their appeal and gain a different but motivating voice and what were the principles and constraints for their brand npd strategy going forwards? What have we got and what could we be?
As ever, our role was to decode the consumer experience, determine the key sequence and significance of the emotions triggered and so define the rules and guidance on what they should (& shouldn’t) do.
What’s more, when Pepsico came sniffing around the Smoothies market – looking for a way in because they saw this emerging market as a potential threat to their Tropicana range of juices – PJs owners realised that their future might just be brighter as a buyout.
So often brands are launched and then bought by VC concerns or competitors and frequently these buyouts are at a valuation that is either significantly advantageous to one or other party and which fails to be based upon the true potential of the brand.
In the PJ Smoothies case Pepsico were simply handed our report which identified the potential of PJ Smoothies based on consumer insight of the true appeal. They could see the potential and so value it – and bought the brand in short order. The owners were thrilled with the valuation and Pepsico got the strategic entry into Smoothies they needed at the time. They always saw the threat to Tropicana as coming from Smoothies and Tropicana was their long term hero brand. PJs was a defensive tactic which did its job brilliantly.
So thrilled were Pepsico by the value of the strategic insights EP provided that we were then asked to do the same insights for the Tropicana brand which led to further strategic work on that brand both here in UK and in Europe.
The one consistent to this is the value that emotional insights give into the potential of the brand. Most accounting is based on a rear-view approach – what has been earned. Our insights are able to value the potential going forwards...