Their role is growing because they are doing well, writes Stephen Rannekleiv, lead beverage analyst at Rabobank. He cites Constellation Brands taking a controllingshare of Nelson’s Green Briar Distillery, Diageo‘s Distill Ventures taking a majority share of Seedlip, the non-alcoholic spirits brand, and AB InBev acquiring the remaining shares of Swish Beverages.
In each case, the venture unit took a minority position with the option to acquire a majority stake if the target company did well. And they have.
The report notes that corporate venture capital (CVC) can bring valuable insights to smaller brands. “Established beverage companies are learning a great deal from the strategies and tactics innovative startups are using to connect with customers,” Rannekleiv writes.
One of the biggest challenges, however, is that small brands cannot be managed like big brands. “When smaller brands are taken over and managed just like anbother large corporate brand, they lose their appeal,” he writes.