The Cycle is Getting Shorter

It used to be that the cycle for beverage brands, from founding to sale, took decades.  It took years of development, small sales, few team members, and deliveries out of station wagons. It took more than a decade for brands like vitaminwater and Honest Tea to reach their exits.  It took hand to hand combat and years of repeated losses, all in a world where not everyone was sure that small (local, artisanal, healthy, craft) brands would make it.

Now all of that has changed.  This is the era of small brands.  Almost no one is asserting that the big mainstream brands are coming back and will reverse their sharp declines. Will today’s kombucha or coconut water drinkers revert back to diet sodas? It’s pretty clear to most of us that they won’t be returning anytime soon.

As a result, strategics are buying up the right brands sooner rather than later.  And smart entrepreneurs are realizing when the M&A window is open and when it’s best to consider strategic alternatives.  Look at the recently announced deals in the craft beer segment.  Two extremely young brands – Saint Archer and Golden Road – decided to sell to major strategics in the past month, each for their own distinct reasons, but each after only a few years of operation.

Buyers and sellers aren’t going to wait around any longer and wonder if these new trends are here to stay.