Colgate acquired the oral care brand Hello—one of two approaches CPG conglomerates are taking to either buy up new brands or pair back their legacy brand portfolios.

WHAT HAPPENED: Hello is one of the fastest-growing premium oral care brands in the U.S. It sells adult and kids toothpaste, mouth rinse, toothbrushes and floss at major retailers and online.

WHY IT MATTERS

  • Some CPG holding companies are buying up smaller brands to squash competition and diversify their portfolios. Colgate purchased Hello to expand its natural products offering. But it plans to keep Hello’s founder and current CEO in place, proof that it will invest in the brand itself. Proctor & Gamble’s 2018 purchase of Walker and Company relied on a similar formula—fueling Walker & Company’s brands to give the holding company a foothold in personal care products for people of color. While Hello hasn’t had a problem growing independent of a CPG conglomerate, Colgate’s presence in over 200 countries will take the brand from a startup to a mainstream brand, giving Hello the reach that would otherwise take much longer to obtain.
  • Other holding companies are focusing on simplifying their brand portfolio versus adding more brands. Kraft Heinz is now streamlining its product offerings to focus on defining category winners after too much internal competition among brands selling the same products led to excess inventory and confused consumers. While this is a good step in the short term, Kraft Heinz’s brands still came from the previous century and will always have the stigma from highly-processed foods, which may lead it to buy up younger and healthier brands in the near future.