In this episode of the M&A Launchpad Podcast, hosts Ben Suttles and Feras Moussa welcome special guest Mark Tarchetti, a veteran in the consumer products industry. Mark has held senior roles at global giants like Unilever and now runs his own boutique consulting firm, helping companies unlock the true potential of their brands.
The discussion dives deep into how major companies build and maintain strong brand stories, the psychology of mergers and acquisitions, and how to apply these insights to your own business ventures. Mark also shares why consumer research is critical to growth and how to preserve brand legacy during acquisitions.
In this podcast episode, we discuss:
- Building a strong brand story and strategy
- Insights into the psychology of mergers and acquisitions
- The role of consumer research in driving business growth
- How to maintain brand integrity and legacy during acquisitions
You can connect with Mark:
LinkedIn: https://www.linkedin.com/in/mark-tarchetti-312b88164/
Website: https://www.alchemy-rx.com/
Additional Resources:
Sponsored by O’Connell Advisory Group – Work with a trusted Quality of Earnings and Financial Diligence partner who focuses solely on business acquisitions.
Visit: https://www.oconnelladvisorygroup.com
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🎧 Podcast on Apple: https://podcasts.apple.com/us/podcast/building-powerful-brand-stories-m-a-strategies-with/id1740382586?i=1000721966859
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Transcript
00:00 All right, on today’s episode, we interviewed Mark Tarchetti where we really did a deep dive into how should people
00:06 think about their brands, right? How do larger companies think about consumer brands, right? How do they build a story
00:11 around those brands? And really how do you apply some of those techniques and things into, you know, as a person buying a business, right? What should
00:18 you take away in terms of those brands? So, Ben, what were some of your big takeaways? You know, I mean, Mark’s been around the, you know, some big companies. he’s
00:24 done a lot of M&A and you know with these big companies and really structured deals and helped them kind of grow in the consumer product space. And
00:31 I thought it was a really interesting podcast today because you kind of talked you kind of pulled back the curtain a little bit on those bigger deals. But
00:37 also I think the other thing too that our listeners are going to enjoy is just kind of the psychology of how you you
00:42 know you you you make those connections with those founders is what he was calling them. But really it’s just
00:48 business owners folks, right? Because at the end of the day it’s not all about who pays the highest price. It’s the one
00:53 that makes the connection that is going to take care of the legacy of that business owner and ultimately grow the company. And I think our listeners are
00:60 really going to enjoy that part of the episode today. Yeah. And the other thing too is just really thinking about brands have
01:05 strategy behind them, right? It’s not just, hey, today I’m going to sell a tennis ball and that’s it. It’s about
01:10 how do you build a strategy around it? How is yours the best tennis balls? Is yours the most yellow and easier to see or is it the best bounce or whatever it
01:17 is, right? and he kind of dives into just how do you start to think about strategies because I mean personally I
01:22 think one of my biggest failures has been not understanding that in a previous business right the value of sales and marketing and so it’s a
01:28 critical part of any business and that’s really what this episode focuses on so enjoy
01:35 welcome to the M&A launchpad podcast with your host Casey and Ferris with Equity Launchpad on this podcast you
01:40 will gain insights on acquiring investing in and selling profitable businesses in the lower to middle market whether you’re a business owner investor
01:46 or spying young entrepreneur at Equity and Launchpad. We will provide you with the knowledge, guidance, and capital to navigate the world of mergers and
01:52 acquisitions. Hey there, this is Casey with the M&A Launchpad podcast. Want to let you know
01:59 about October 25th. Put it on your calendar. This is a do not missed one day event. There’s going to be
02:05 incredible headliners, but really at the end of the day, you’re going to get a chance to talk to people that have made
02:11 acquisitions, learn from some of the challenges that they’ve made, because this is definitely a challenging
02:16 process, but more importantly, there’s going to be people there that can help you and support you along the way from
02:22 great vendors, quality of earnings, how to run the due diligence process, and how do I get financed, how do I raise
02:28 capital, how do I structure all of these things? October 25th in Chicago, we’re going to be gathering. It’s going to be
02:34 hundreds of people that are all focused, like-minded people, and man, everyone that’s come has given us incredible
02:41 feedback. So, mark your calendar. October 25th in Chicago. We look forward to seeing you.
02:46 Hey, Mark, welcome to the show. Nice to be here. Thanks for having me. Likewise. Likewise. So, for our
02:52 listeners, you want to just give a little bit of background about yourself and kind of what you’re doing? Yeah, so I’m a sort of 30-year veteran
02:58 of consumer products. Um, I’ve worked in big corporations and the last 6 years I’ve run a boutique consulting firm with
03:05 people I’ve worked with the last 10 20 years. Uh, we’re all growth operators. So, our passion is scaling businesses
03:11 and helping brands unlock their potential. So, we’re kind of the opposite of the steadystate maintenance
03:16 approach that you see in a lot of corporate assets particularly. We like to get things done. We like to build
03:22 things and we’ve learned a lot working on two 300 brands over 100 categories in
03:27 those long careers. and uh uh excited to kind of always be chasing new potential.
03:33 Got it. Awesome. And so, you know, for the listeners, right, maybe before we kind of go down that path, how did you
03:38 break into it, right? Because everyone always wants to understand, you know, how do you get started in the space? And so, what was kind of your pathway?
03:44 Yeah. So, I I was um um my brother and I were the first in our family to ever go to college. Nobody in my family ever
03:50 worked for a big corporation. Grew up in a small town uh with an unemployed dad.
03:55 And I went to college and I was lucky to join a really big consumer products firm off the back of that. I spent my time at
04:01 college not studying getting life experiences running the student council and things and that set me up really
04:06 well for getting a job. So I joined Unilver which is one of the world’s biggest uh fastmoving consumer goods
04:12 companies and you know I started as a graduate trainee worked my way up to the global head of strategy uh and did that
04:19 in my final three years there. So I was 14 years at Unilever. Uh and then I started my own firm um because I’d begun
04:26 to major in strategy. So I loved figuring out what to do with businesses. I’d learned by doing. I’d learned by the
04:31 size and breadth of Unolivver full of wizard smart people and great brands. And so I set up my own firm and an
04:37 American corporation asked me to help them with their strategy and over a period of about 18 months they moved me
04:42 to the states and uh uh took the number two operating role and ran all the growth functions, ran all of corporate
04:48 development. So you know if I kind of learned the theory at unilver I was the big operator in that second job which I
04:54 did for seven years and so whether it was marketing design innovation M&A
04:60 e-commerce I was running all of that across a very complicated company with a couple hundred brands um and so I kind
05:07 of learned by doing uh I’ve I’ve kind of learned that way and surrounded myself with great people that complement me uh
05:13 and the firm that I now represent we started in 2019 I go back 10 20 years with all those people uh pretty much and
05:20 so it’s kind of handpicked team that I trust and enjoy working with and and we kind of cover the growth disciplines. So
05:27 it’s entirely a story of practice over theory uh and working on brands of all shapes and sizes. And I I started in the
05:34 in in the uh you know the mega cap of Unoliever the big corporate job I was talking about average brand size was
05:41 2550 million when you took a portfolio of a couple hundred brands added up to a big number but was a lot of small
05:47 brands. Uh, and I I learned a lot from founders. I did a lot of work with business founders, buying businesses
05:52 from them and and learning from their stories. And that’s really set me up for what I’m doing today, which is more and
05:58 more of that trying to help people scale. So curious, man. I especially Unilver. I
06:03 mean, everybody knows I mean all the we know the company, but also you probably know a lot of the brands too, right? Our
06:08 listeners would be. How do you break it all down? Like where where do you where do you see like I guess there’s two questions. Where do
06:14 you see your most because you just talked about a lot of things from e-commerce to marketing to sales to to operations. What do you really like to
06:20 do, right? Where do you where do you see you really make the most impact, you know, and then how do you break down
06:26 when you’re at that level at a mega cap company? Like what are some of the tips
06:31 and strategies? Because I mean, I think as entrepreneurs, we’re always looking for hacks, right? How do you get more,
06:37 you know, efficient and or you know, develop strategies to to be more productive throughout the day? And I’m
06:43 just curious when you’re when you’re operating at that level and you’ve had so much experience, you know, I mean, what are those life hacks that you’re
06:49 kind of doing, too? So, I think um you know, the the biggest piece of advice I always give is go
06:54 where the action is, right? In any situation, you’re sniffing for what’s going to move the needle because there’s a ton of people in any company, big or
07:01 small, that will keep the lights on. Keep the the big risks at bay, keep things flowing. What most businesses
07:07 lack is the game changers, the deltas. They underresource them. they don’t have enough courage or imagination to find
07:13 them. And consumer products honestly is a pretty simple industry. Um there’s only five or six levers that matter and
07:19 your job is to figure out in the next period which ones are going to make the most difference and then be really aggressive and don’t kind of um I don’t
07:27 believe in democratic management in the sense of spreading your bets, putting a little bit on everything, trying lots of
07:32 little things. Um, you know, whenever I look at businesses, I’m always amazed how much PowerPoint there is. Just
07:38 activities and stuff. And there’s no coherence to say this is the one thing that really matters. If we do this well,
07:45 it’ll set it up and then, hey, we have a second idea. If the first idea goes really well, it’ll fund the second idea for free because we’ll take some of the
07:51 proceeds. And then you get into this virtuous cycle. So, it’s a mixture of kind of courage and really prioritizing
07:58 a bet and then getting into this flywheel where bet one funds bet two and you’re gradually getting bolder and more
08:04 confident. And that that applies to culture and management as much as business ideas, right? Like you just you
08:11 just have to estue steady state. There’s a lot of comfort in just bringing in the year incremental budget ideas um keeping
08:19 your board happy. But we weren’t put on this earth to do that. you you you admire the brands, the people that move
08:25 things forward. And if that’s what you keep majoring on, and I was I was fortunate to get into strategy because
08:30 that’s fundamentally what strategy is about. It’s imagination, then making choices, then decisively resourcing
08:36 them. And I do that with people. I do that with business ideas. Um, and I try to instill that culture in all the
08:42 businesses we work with. Yeah. So, really quick before we move into the M&A side of things, you know,
08:47 let’s talk about brands and strategy, right? Because I think one of, you know, me personally, one of the biggest
08:52 mistakes I made in a previous company is not understanding the value of sales and marketing, right? And I think a lot of
08:58 entrepreneurs make the mistake, you know, of not really understanding how those are just as important as the
09:03 product that you provide. And you know, maybe for entrepreneurs that are getting into the space, right,
09:09 maybe smaller businesses or maybe even mid-size businesses, what are just some of the biggest mistakes you see people
09:14 make around brand and marketing? So I I think in brand particularly it’s
09:20 fragmentation. Um a lot of brands have kind of shrunk to the point they don’t
09:25 have a bold story. We’ve seen a lot of up and cominging brands in the last 10 years because the big brands left too
09:31 much consumer opportunity on the table. They focused on cost savings, homogeneity, quite often ripping off the
09:37 product for profit reasons to cover inflation. and they left all this space for what the consumer really wanted,
09:43 which a number of small brands came through and they broke in because e-commerce democratized availability.
09:48 Before that, you had to wait years to get in Walmart. So, you know, the brands have to have big ideas and they’re
09:54 usually founded on a big idea and then they lose their way where they stop innovating and then they try to mask
09:59 that with a codery of promotions in stores, a load of social media activity, but none of it has a robust story that’s
10:06 going to inspire you to buy more or use more uh or pay more for the premium innovations that they’re bringing. And
10:12 so, that timeless model of innovation and then really cutting through with your communication, that’s always been
10:19 what’s needed. Now it’s more digital. Of course it is. Now technology might come into the product. People might expect
10:24 things like personalization more than they did. But the underlying business model is timeless. Just so many brands
10:30 have lost their way. And if you’re one of the upand cominging brands that I know you guys work with a lot and and so
10:36 do I. Your whole challenge is how to do it at scale because it’s quite easy to get the first run of sales to actually
10:42 get national distribution to actually be able to sell direct and through wholesale to have a runway of innovation
10:48 that builds you a big portfolio and scale over time. It needs a lot of deliberate steps and people are quite
10:54 good at the first product and then they’re often surprised by how much adoption it gets, but then they’re kind
10:59 of short on the runway for the next three or five years. Uh or they’re just too busy. They don’t invest enough in
11:04 the team in scaling. They don’t have enough money. they didn’t get investors and so they kind of work really really
11:10 hard but they’re they’re only touching 30 40% of the opportunity and that’s the brands we love working with is where
11:16 it’s kind of a turn up they’re doing really well they’ve got a brilliant team but there’s three things they just can’t get to or they don’t have the skills for
11:23 uh and that kind of expansion we can help with so you know it’s it’s a very simple business model and on the sales
11:28 side um you know for years I’ve been talking to folks about how much channel rotation there was the obvious of the
11:35 Amazons But then it was clear that Bed Bath was going to struggle, department stores were going down, and it was clear
11:40 that Walmart, Costco, uh Target were going to be winners, Home Depot was going to be a winner. But if you went to
11:45 a brand, they wouldn’t have a point of view on that. They wouldn’t say, “What’s your footprint going to be in three or five years?” They weren’t positioning
11:51 for where that trend would end. And in some cases, they might have a really big share in a declining retailer and a much
11:57 smaller share in the winner. And that has to be addressed. And I found people were were often lacking a point of view.
12:03 And then on e-commerce, for years, brands were playing catch-up. They didn’t bet early enough on Amazon uh and
12:08 some of the retail.com platforms. They were they were scared of where it might lead. They assumed it wouldn’t be
12:14 profitable, and they lost a ton of consumers to these other brands that started with Amazon. Uh so again, it’s
12:20 it’s all back to keep the business model really simple and be super decisive about how you execute it and do fewer
12:27 things that you can do really well and then when they work, take some of the money from that. Don’t give it all to
12:32 your shareholders and investors. Put it into round two because you can’t do it all at once. So get the sequence right,
12:38 generate money, spend money, and that’s how you grow a business, grow a team, uh whether it’s the marketing or sales
12:44 side. And honestly, that’s most of it in consumer goods. Those two variables you mentioned, you know, you obviously know
12:49 the space because those are the two biggest things that make a difference. You don’t get a manufacturing advantage these days. Maybe have a bit of
12:56 technology, but you know, you you broadly compete with people with the same back end. It’s it’s the brand and
13:01 what you do with it that matters. Yeah. And I think Yeah. I mean, the retain earnings is it doesn’t matter
13:07 what industry you’re in, right? I mean, you need to continue to reinvest in your business. Exactly. And I love I love the idea of, you know,
13:13 just being decisive because I think a lot of people they there’s a lot of this analysis paralysis with people. Yeah. Especially if they’ve had some success
13:19 in one thing. They’re like, let’s just stay in our lane. You know, we don’t have to, you know, that’s always going to work out. And then they get left behind because
13:24 the next guy’s coming along and saying, well, I could do that a little bit better than them. And then I also have this other idea. And so, you know, we we
13:30 we love that as, you know, on our side, too, right? Just being decisive and and really sticking to what we do best. And
13:37 I think that that’s important as an entrepreneur, like don’t don’t don’t spread yourself too thin, right? And reinvest in your company. Don’t take it
13:43 all out of it, right? So, yeah. And so, maybe, you know, shifting more towards kind of the M&A side of
13:49 things, right? So, maybe share with the audience just a little bit about where you are in the M&A journey. Yeah. Um, so I’ve spent a lot of my
13:56 career the last 10 years in M&A. I think I’ve worked on 30 40 billion of deals often as the principal in corporate um
14:04 did a lot of big disposals, a lot of big acquisitions and worked with a lot of founders. And honestly, the highlights
14:09 of my career are when a founder agrees to sell you their business or to partner with you, that’s the biggest compliment
14:14 anybody can give you. Um and so I’ve really enjoyed learning some of those up
14:20 and cominging growth stories and being part of taking them to the next level. Um, so I’ve had sort of experience of
14:25 all shapes and sizes, different types of deals. Um, and and again, you learn by doing. So, plenty of tips and tricks
14:32 that come out of that. Um, and now we advise uh sort of three areas really. We
14:37 partner one or two family offices where we’re trying to be the operating partners to them. They’ve got the capital, they’re interested to invest in
14:44 spaces, but they really need help with the team scaling the business uh and getting return. Um, we work with private
14:50 equity advising them on transactions. Um um and and um you know we we sometimes
14:56 work with corporates um we worked on the Tropicana acquisition that came out of Pepsi for example.
15:02 Got it. And so maybe let’s talk about that first one though, right? Because that one I think maybe relates the most to the listeners which is you know you
15:08 have a family office that’s backing you right. You’re going out identifying businesses and presumably in the hopes
15:14 of a founder saying yes to sell it to you. You can step in buy the business and continue to scale it. So can you
15:20 give some I guess two questions you know how does the family office relationship come about I think for a lot of
15:25 listeners that’s a mythical thing right so what is a family office how do you find them you know what how do you work
15:30 with them and the other side of that is how has it gone right can you maybe you can give an example as hey here’s a deal
15:35 we identified here’s how we bought it here’s how we structured it and here’s what we did post acquisition so we’re we’re actually um hoping to
15:42 consummate our first deal with our lead partner in the next few months so I can’t I can I can talk about it I just
15:48 can’t share the exact details, but um all of our all of our um business
15:53 whether it’s consulting or M&A comes off uh recommendation. It’s all word of mouth. Uh we’ve got banking contacts.
16:00 We’ve got folks like yourself that we we partner and so we got introduced to a couple of family offices that way. uh
16:07 the one that we’re hoping to consummate our first deal with having got close on three others. Uh you know it’s it’s been
16:13 three years of dating and we’ve invested heavily to help them think through multiple situations.
16:19 The deal that I hope will go through is actually two years in itself in the making. So it’s gone through dying a few
16:24 times uh and being resurrected. For those listeners, you have to be prepared for deals to drag out, for
16:31 deals to die. I mean, heck, Casey, who’s usually kind of the my the other co-host on this podcast, he’s out right now
16:37 meeting with a seller on a deal that died back in kind of Q4 and it’s back on the table for us to probably go, you
16:43 know, get a deal done. So, and I I guess that leads neatly to the reason that one’s still live is is the family office partner really believes in
16:51 relationships, really invested in the sellers uh irrespective of the deal dynamics. So he’s maintained a very high
16:57 quality and built relationship irrespective of the transaction and that’s actually why we gel. So you ask
17:03 what’s the key? We actually share values. We’ve connected on that. I found whether it’s team partners, business
17:09 partners, founders, it’s always about values. If you can share backgrounds, if you can share philosophies, the business
17:16 bits easy because even if you see the business slightly differently, you know the other person well enough. You’ve got
17:22 high trust. You’ve got high interest. And that that true bond allows you to
17:28 respect each other’s points of views and to get the best out of it. Sometimes you immediately agree. Other times the whole
17:33 point is you’ve got complimentary skills and you’ve got to put them together to get the best outcome. And so the office
17:39 we’re closest to it’s very much a values fit. Um built over two and a half three years. Um and um you know every time we
17:47 we catch up it’s it’s not been a test. It’s actually like reinforced that belief. We always leave dinners,
17:54 meetings, whatever it is we’ve been working on or getting together socially with that sense of there’s a real
17:59 connection there. Um so, you know, I think that’s key to M&A like behaving
18:05 with integrity, transparency, um clarity, um building trust, uh and
18:12 you know, when there’s bumps, it’s better to walk away and say, “Now is not the right time. We can’t give you what you want, but maybe things will change
18:18 in this environment, so call us whenever it does.” That’s way better than any of
18:24 the alternatives, trying to jam things through, trying to win. Uh I’m a big believer in in values-based
18:30 relationships and looking for partners. Yeah. And I think, you know, I I wanted to kind of dive a little bit what I
18:36 think our listeners need to, you know, understand, right, as as the journey kind of pertains is when you’re trying
18:42 to talk with these sellers, right? This is like their legacy. This is their baby. This is like one of the most
18:47 important transactions, if not the most important transaction they’re ever going to do in their life, right? And a lot of people really really love and have an
18:55 emotional attachment to this product, service or business that they have. And I think you touched on something, Mark, that really people needed to take in is
19:02 you have to build up that trust that you are the you’re going to be a good steward of their baby, right? And you’re
19:09 going to take it to the next level and you’re going to really maintain that legacy that they built. And some in some cases, some of these people that we
19:15 talked to have been running the company for 30, 40 years. Yeah. That’s their whole life. That’s their whole life, right? And I think that’s
19:21 important. Yeah. And and imagine I I think that’s super smart advice. I mean, imagine the alternative, which is you’re just there
19:27 for a transaction. Why would somebody give up their life’s work to somebody transactional unless they’re forced to
19:33 occasionally? You know, sadly, people are forced to. But, you know, just you would never do that in any walk of life.
19:38 So, why would you do that for what’s probably your biggest financial decision, your biggest emotional decision? You know, you’re going to fret
19:46 no matter who you partner about. It could go wrong. you know, there’s inherent risk in a founder transition um
19:52 regardless of the partner. So, you’re a thousand% right and that’s why I say that the highlights of my career have
19:57 been getting through those journeys when those deals are signed, it meant way more to me than deals between public
20:03 companies that were and you’d be surprised too, right? If you even think about like the cash, like unless you’re just going to add an extra
20:09 zero or two to the to the check size, right? Most people they’ll take less cash from somebody that they trust.
20:16 Totally. Than the guy that’s going to the stroke the biggest number. Right. Totally. And I think that’s what that’s what our
20:22 listeners need to understand is is because I think a lot of people get caught up in like, oh, I got to pay this higher multiple or I got to be able to
20:28 compete on this and and I think in a lot of especially in the lower middle market and you could probably say even on the mega the mega deals is probably even
20:34 probably true too there. You know that they’re they’re going to take a little bit less to do the deal with the people that they like.
20:40 Yeah. and and there’s value, you know, and the problem is right now we’re in a tech world and everybody thinks,
20:46 especially some of the people that are on the buy side, they can just hop on a Zoom with a seller and, you know, let’s get it done. But your seller probably is
20:53 twice your age, you know, yeah, they can turn figure out how to turn on a Zoom, but doesn’t mean they enjoy it. That’s
20:58 where we believe in really just going bellyto belly, right? I mean again our partner Casey’s out meeting with a seller like yeah he could have done a
21:04 phone call he could have done a zoom but now he’s out there in person going bellyto belly because that you know you
21:10 see people face to face you break bread you meet with them you get to build rapport with them and that’s how
21:16 the best deals transact. Yeah and you meet their families you stay at their houses that’s when you know you’re getting somewhere and you
21:22 don’t rush it. Uh it’s not a transaction it’s a partnership. Even if the founder wants to exit fully quite quickly for
21:28 personal reasons it’s still a partnership. they’re still going to forever ask you what’s going on. And and
21:34 to sort of build on on on what you’re saying a little bit, you know, I think,
21:39 you know, we only ever get called on transactions cuz we’re different. We’re not the big firms. We’re not got no
21:44 juniors that do the road stuff. And and I think, you know, the flaw in a lot of deal processes right now, the reason
21:50 deals aren’t happening is people can’t imagine what to do with the business. um the days of cheap money, the days of
21:56 really reliable EBIT DS because consumer products its attractiveness was always is so stable. You’re always buying
22:01 toothpaste from Walmart, right? How can it go wrong? But this last few years, we’ve seen all sorts of variation. And
22:07 while the brands have come through it, it makes the private equity deals and things much harder. But if you try to
22:13 apply that to the types of businesses we’re describing, the founders, you’re effectively rocking up and grading their business. You’re saying, “I need to mark
22:20 your homework. I need to go through everything you’ve done and tell you whether I think it’s good enough. Um, and the minute I find something that’s
22:26 not perfect, I’m going to try and lower the price. The founders start in the other way, which is why should I give you my baby? What do you plan to do with
22:33 my baby? Why would that be better than what I can do myself? Why would that honor my legacy, protect my team, build
22:40 my team? Um, and you know, more often than not, the culture is half the reason
22:46 for the results. and cultures amorphous. But most of these businesses, they’re very driven. They’re very
22:52 entrepreneurial. They’re very focused. They may not be um intellectually
22:57 uh focused like some of the big mega companies are in terms of all the PowerPoint and stories around it, but
23:03 they do all the things I was talking about. Naturally, we don’t have the resources to do 100 things. We know what matters. We’re close to our customers.
23:09 We listen to our consumer feedback and we act on it. So, they’ve got the right business model. And that that culture
23:15 has to survive the deal. And that’s what the founders are looking for. And the idea you can rock up as a financial firm
23:21 or something and say, “Okay, 30 days to mark your homework and then tell you all the problems and
23:27 well, we would have paid this, but now it’ll be a bit less.” It’s like that just it’s like a foreign language to them. And then I I agree with you 100%
23:33 on trying to do that via Zooms. You’re telling them that a kid is ugly, right? You know, and I think that people
23:40 take they take a real insult to that. And then then you well, are you saying that I’m lying or that I’m somehow
23:47 the baby boomer generation that we’re typically dealing with? Oh my gosh. You know, I mean, we’ve seen that like, no, no,
23:52 everything’s cool. You know, you have But you have to get past that. And I think that’s a journey that the baby’s not ugly. Just I just think
23:58 you get a different haircut. I I remember probably the toughest founder I dealt with, it was a deal that
24:03 took about 5 years, was on the other side of the world, uh, literally. Um and
24:09 um very impressive guy, but it was a really tough decision for him and it took a long time and um we agreed a deal
24:16 after years of trying. And then we did find some bumps and he called me for him. It was very early in the morning
24:22 and he wasn’t an early guy and it was late for me and he went through the issues and he said I I’m really worried
24:28 about what’s going to happen and I said we had a handshake. Shook hands on a deal. That deal’s still intact. That
24:35 handshake means everything to me. the lawyers aren’t going to change that. We’ve we’ve formed terms. Nothing you’ve
24:41 nothing you’re talking about is going to break that. You’ve obviously got responsibilities to your shareholders to make sure everything stacks up. But it
24:48 was all the story of a handshake. And then, you know, that took all the angst away. Um because he he remembered he
24:53 could trust me and I wasn’t a faceless member of a corporation. Uh I was a person and I believed in him and his
24:59 business and the couple of little bumps that snowboard when lawyers got involved, we could just work through
25:04 them and get to something fair. And it was super easy, but it was that handshake philosophy, not hiding behind
25:10 lawyers or numbers or like you say, trying to point out the errors or or whatever. Um, and and you know, that
25:18 that really helped us bond. We’re still friends now. Yeah. Like I said, you got to be the person that does what they say they’re
25:24 going to be do and you just be reasonable to work with and that gets you very far in life. So, yeah. I mean, it’s is the simple little
25:30 psychologies of the of the buy sell side, right? You know, I mean, it’s it’s, you know, you just say what you’re
25:35 going to do. you be, you know, you you be candid, you be transparent, you know, and you ultimately follow through with
25:40 these promises that you’re going to make, right? And I think a lot of people they get, you know, and this is, and I’d love to hear your your input on this,
25:46 too. I think in a lot of ways, especially people are starting off, they feel like they have to like pump their chest up and make, you know, big, you
25:54 know, um, promises or overpromise certain things, you know, just to make
25:59 themselves either look bigger or more confident. And I think in a lot of ways people can smell through that or see
26:05 through that, right? You know, and it’s it’s like, hey, if you don’t have the money lined up or you don’t have your financing or capital stack lined up,
26:11 just be upfront with the seller like, hey, this is what I’m going to do. I have to go to these five, you know, um,
26:18 investment banks or or or or lending partners and I got to line up this equity. But a lot of people will be like, yeah, I got the money in the bank
26:24 and this person’s ready to finance me. And then you get into the deal and you find out 30 days later like oh shoot
26:31 like that’s not actually the case. Well guess what that trust is immediately gone.
26:36 Yeah. You know just be upfront because with founders particularly you know a lot of this is a foreign language
26:42 anyway. So all the things that are impressive when you’re in your own seuite are completely meaningless to them. And you know I try to always learn
26:49 and the family office I was describing the principle of that I’ve learned a lot from the last few years. and he kind of
26:54 taught me one thing which I I had a little bit but he he’s really made me internalize it which is when you meet
27:00 those folks for the first time start your story with who you are not what you’ve done not who your firm is not you
27:08 know why you’re interested in the business start with who you are and build from that and and everything then
27:14 is in the context of you as a real person and you’re not trying to drop names of which brands or companies you
27:21 work with you’re not trying to impress them with how big your firm is or anything. You’re starting with you, the other side of the table. And obviously,
27:28 you know, it’s always best when you can go second after you’ve learned that about the other person. And, you know, I’ve seen so many people just come in,
27:35 you know, dressed in suits for founders that are in jeans, give out their big business cards with titles on,
27:43 immediately start talking about the firm, then they basically almost say, “Why should we be interested in this?”
27:48 And I got to get on a plane to look at another business tomorrow. It’s like if you’re going to do what we’re describing, you got to be very
27:53 choiceful. You can’t do this on 20 businesses. Yeah. You’ve got to you can filter before you go, but once you get involved with these
27:60 guys, you’ve got to be committed and don’t waste their time. Um and and you can’t do that on 10 20 situations at
28:07 once. Again, if it’s transactional, there’s no transaction coming. Yeah. No, I love that. I love that.
28:12 Well, kind of switching gears. So, you you talked about at the beginning of the show, right? You know, one of the bigger deals or maybe the biggest deal that you
28:18 did was the Tropicana deal. you know, to the extent that you can divulge some of the the the secret sauce or the sausage
28:24 making behind it, like you know, what was your role in that? What did that look like? Some of the numbers. I mean,
28:29 I think everybody loves to like hear those like really big success M&A stories. So, can you kind of talk us
28:35 through how that kind of went down? Yeah, so we got called in um relatively late because it was a big deal for a big
28:42 very successful private equity firm. They’d hired a bunch of advisers over 61 12 months, but nobody could tell them
28:48 what to do with the business. They could give them lots of diligence analysis, lots of linear extrapolations,
28:54 but there was there was no so what could we do? How could we create value? And all we do is growth in business
28:59 development. That’s all we we look at. And honestly, they gave us I think they cut the contract into three or four
29:05 stages. They could let us go unless they were impressed at each stage and things. And and we ended up doing the bulk of
29:10 the business case. A fairness opinion was done on it, which never happens with growth plans. um you know I was
29:16 presenting it to lenders, co-investors and it was all about taking the research Pepsi had the data and the knowledge
29:24 which was profound but then comparing it to the reality where a lot of it wasn’t being aggressively used because it had
29:30 been a very low priority for a very big company. So it had a new team quite often, lots of rotation. Its objectives
29:36 were very short-term. We need you to get this budget this year. Get there how you like. There wasn’t really a a vision.
29:41 There was a lot of passion in the team. Um but they weren’t in a condition where they could, you know, unlock that
29:48 potential. So our job in pretty short order was to get very specific real activities, exact things you could do on
29:54 the brands, cost them up, use the research to prove that they’re valid. You know, the biggest thing we use in
30:01 our work is consumer research and data so that you can back it up with I can prove to you the consumer wants. I can
30:06 prove to you it’s this size opportunity. Um because it’s data driven, not just an ethereal idea or you something to get
30:14 excited about where you’re like that sounds great, but is it real? Is it going to make me money? Um and you know
30:19 it was a tough deal because orange juice has been declining. There was a lot of cost pressure on price of oranges. Bit
30:25 of a mixed portfolio and some things that have been missed over the years. So you had to put it again into a sequence.
30:31 It couldn’t all be risky. It couldn’t all be long-term. You needed wins in year one, needed wins in year two. That
30:37 same funding philosophy, get some easy wins on the board quickly from distribution, customers, simple product
30:43 gaps or or making things bigger that we’ve already got and then use that to fund the bigger breakouts, which some
30:49 stuff’s been coming to market the last couple of years uh as evidence to that. But that was always going to take a little while. So it was getting that
30:56 plan and then it was still risky no matter what you did. So we always build off a do nothing scenario like it’s
31:02 going to do this unless you intervene. So there’s a realistic base but you know we had probably 10 15 ideas and we put
31:08 five or six in the business case. So you had inherent hedging in it’s not all in you don’t have to kitchen sync this and
31:15 yeah that was a that was a terrific experience and you know because the deal happened because it was public we’ve been able to celebrate that a little
31:22 bit. It was a big deal for a firm of our size. There’s only 15 of us for us to be called and to play that role and deal
31:27 with a very very successful PE firm. Um, you know, that was that was a real moment of pride. Actually, it’s
31:33 certainly the biggest advisory we’ve done. I’ve done big deal. I don’t remember. Did Pepsi announce just the public price that they sold it
31:39 for. Oh, so the enterprise value was like about 5 billion, I think, from memory. And Pepsi retained a JV. So, we had to
31:47 convince Pepsi of our plans, too. They retained. Okay. have to keep them. Here’s all the things you didn’t do right and we’re going to do them, but
31:53 you can stick around. They had to be convinced that you were, you know, again, the right owner that would get them. They they kind of the
31:60 only reason they were selling was they thought somebody could run it better and create value. That’s why they were retaining a stake. So, they were kind of open to it, but
32:06 you yeah, you had to you had to convince them because they knew lots about the business. So, it was like, okay, yeah,
32:12 that makes sense. Uh that that was sort of a real sort of badge of honor for our plan when management sort of signed up
32:17 to the bulk of it. All right. Perfect. Awesome. Well, I guess that’s probably the best trigger.
32:23 So, we’ll go ahead and move on to our rocket round where we ask the the the guests the same three questions. So,
32:29 first question, what do you like to do in your free time? So, I’m a big foodie. So, I love cooking. I love eating. I love wine. So,
32:35 anything around the food and drink space. And then I have to work out to uh compensate for that. So, it’s a good cop
32:42 bad cop model. Yeah, Ben and I both like the first part of what you said. Second part, not as much. All right. So,
32:49 all right. So, let’s talk about the most memorable moment in your business journey.
32:55 I think it’s it’s it’s probably the founder deal I was talking about that took years. Um, because it was just such
33:03 a personal connection in the end to to have somebody trust you. like I felt that with each of the founders I work
33:08 with. So I feel bad picking one, but um you know we’re still friends. Um we
33:16 still see each other in now totally different context. But you know that really felt like somebody’s trusting you
33:22 with their baby and it was really hard. The reason it took so long, it was really hard. You had to be patient to
33:28 wait for when he was really ready. And um that was a pretty neat experience for a for a kid from a small town that never
33:35 knew what M&A was growing up and things. That was like wasn’t my biggest deal, wasn’t the most famous deal, but it was
33:41 the one I’m proudest of. And and I do think uh you you you know deals give you
33:47 an energy that a product launch and things don’t always like there is still that adrenaline around uh those those
33:53 things. So it kind of probably probably that’s my pick. All right, last question. and what’s
33:59 your favorite tool or resource? So, um this is now very much in an AI
34:05 context, but um we’ve always used consumer research as the foundation of our work. It’s not about us being the
34:11 smartest. It’s about us literally mining and being obsessed with what the consumer really wants and then
34:17 decisively acting on it. A lot of researchers are lost in organizations. So, they know everything Tropicana could
34:24 have done, but they’re buried outside the seauite. So our job is take that consumer knowledge and make it
34:29 actionable and we now do that with a lot of digital tools uh that can mine a lot
34:34 of knowledge very quickly very efficiently that can test ideas. So it’s gone from a very analog thing many years
34:40 ago to now a very digital thing, but the philosophy is the same is know your consumer, obsess about it in a very data
34:47 driven way. So you know that you’ve got you’ve got ideas that will work and and let’s drill into that. Let’s drill into
34:53 that really quick. Where where are there uh free resources for consumer data,
34:60 right? So you can get a ton out of the GPTs. I mean there is a ton of published. Um,
35:05 what we do is we work, we have a partner called Market Logic that’s got a a great version of that that they apply to
35:11 proprietary Intel for a particular client. So, they’ve got tools that will work with confidentiality. So, if it’s
35:18 public, you you will do really well if you if you work on learning your prompts. Um, you will do really well
35:23 with the chat GPT or equivalent. Uh, you can get a lot of market info. You can obviously scrape reviews and things like
35:29 that. But, you know, the best research is using proven techniques. This is not about just reading Amazon reviews and
35:35 things. It’s about knowing the key questions for a brand, having a proven technique that’s been used many times so
35:43 that you can get quality results but interpret them versus norms. So, it really is behind firewalls that you get
35:49 the special stuff um to be honest um with research firms and then use an AI
35:54 to mine it. that that’s kind of how we would work and we use a firm called Market Logic that’s a partnership we’ve
35:59 signed recently uh that has that capability um that allows us in a diligence to mine everything the client
36:06 knows so you you know more than them very very quickly but yeah chat GPT with the right prompts you you’ll get a fair
36:12 way you’ll certainly get hypotheses you may not be able to prove them and you may want to go get some expert help to
36:17 prove it but you’ll certainly get the genesis of the ideas okay awesome love that and and and kind of going off
36:23 script just as a as just a personal question I think our listeners would love to to kind of hear right you know somebody’s that’s kind of starting off
36:29 and we’ll and we’ll use consumer uh you know products you know because that’s the that’s the industry that you’re in
36:35 somebody’s looking to get in and and and be on the buy side of this right you know what is the first thing that they
36:41 should be looking to do you know giving them some kind of tips and strategies of like hey you maybe you’ve had some some
36:47 time in corporate America you’re stepping in you want to go buy your own company what what are some of the strategies some of the things that they
36:52 should be doing um to to land that first that first acquisition. So I I I do
36:58 think passion really matters and you know when you start looking at something whether you got a passion for that
37:03 product or the category if you don’t if you’re agnostic move on to something else I think uh you learn a lot watching
37:10 in store um you know looking at what consumers are excited about um that
37:16 tells you there’s some opportunity there and it’s never fully realized there’s always more ahead so a mixture of your
37:22 passion intuitively then seeing it around whether it’s online reviews use whether it’s in store. We spend a lot of
37:28 time in store um just watching because that tells you you got something to work with. Um and then you know if you’re
37:36 going to buy something in consumer products functional performance really matters and um you have to be confident
37:43 the product really delivers because most of the preference drivers like an obvious one is detergents. You need it
37:49 to remove stains. You want your whites white ease of work. Yeah. It’s smelling nice having cute
37:55 packaging. Yeah, fine. I I might try it because I assumed it would work. When I find it doesn’t work as well as my Tide
38:00 detergent, I’m running back to Tide. So, that’s true of most categories. And people try to obiscate that with
38:06 sensorials, with packaging, and that’s that’s hollow. It may still grow a bit, but one day you’ll pay the piper and you
38:13 you’ll prove you didn’t have it. And unfortunately, by then, you’ve generally got the wrong economics in the business. You can’t add in the goodies. You can’t
38:19 find the technologies. You can’t hire the R&D people. It’s too late. So you know the third one too too intuitive.
38:26 The third one then is the cold hard why believe in this product is everything.
38:31 Um and there can be some peripheral products that aren’t so great but the core needs to be genuinely efficacious
38:38 and normally that’s functional and normally it’s on very important things that obviously matter. So um you know
38:45 again a detergents example yes people want to wash at low temperatures. They’re interested in a sustainability
38:51 story, but not if it doesn’t clean their clothes and get their whites white. Like that that’s a an expectation probably of
38:58 the whole category now. And it’s important, but you can’t just build a brand around that and not deliver on the
39:03 others. So, you’ve got to be you’ve got to be on those drivers of preference that really really matter and know the
39:08 product delivers. And I think it’s it’s interesting that you bring that up because I mean like in the in the age of Amazon and Google
39:14 reviews, right? I mean, you’re going to get you’re going to get scorched, you know, very whereas, you know, 50 100 years ago, you might be able to to play
39:20 that up for a few years and still make some money. The marketing could out compete the reviews because, you know, you’d have to
39:25 have someone that actually use it to tell you something versus now. I mean, you’re immediately getting scorched, right, that your product
39:31 doesn’t work and then people are their first instinct, at least when I’m looking at a new product or service is, I’m going to go check out the reviews,
39:37 right? Yeah. Especially on like an Amazon, right? We did um you know I I wrote a book during co we were quiet as a firm
39:43 because of co so I wrote a book on on all of this and um we looked at all the insurgent brands so the all the up and
39:49 cominging brands there had been about 10,000 of them in in the core consumer products categories we had data for and
39:55 98% of them never got to half a point of market share not half of 1% market share. So that was for all those
40:02 reasons. So you have to the only way you know which ones are going to get beyond that. It’s not the Instagram
40:07 influencers. It’s not the amount of buzz that’s papering over the core. It’s the
40:12 does the product truly deliver. And what you’re honestly looking for, what I always love is when it really does
40:18 deliver, but a lot of people haven’t heard of it yet. When it’s got this real loyal audience, but it’s small. It might
40:24 be in one state where the product was invented. It might be in one retailer and so constrained. Because those are
40:29 the easy business cases where you go, great, we’ve got we’ve got scale evidence. It works, but we’ve also got
40:35 this candy store. It might take a few years, might take some investment, but we don’t even need more product. We can
40:40 blow it out where it’s available, more people hearing about it, more recommendations. That’s that’s where consumer products
40:46 really kicks in. So, you’re looking for those kernels that are not yet at scale, but they’ve got some kind of scale proof
40:53 that they work, they deliver, and a loyal following. And then you just need confidence that there’s more people
40:59 that’s relevant to. You know, occasionally there’s niches where it’s got a loyal following, but there ain’t many people that want that. But, you
41:05 know, normally in these categories, they’re pretty accessible and and they’re pretty broad audiences.
41:10 Awesome. Diamond in the rough, right? Yeah. Well, well, Mark, so to kind of maybe wrap, how can people get a hold of
41:16 you? So, uh, our website’s alchemyrx.com. Uh, my email is markalcherx.com.
41:22 We would always love to hear from people. You can find me and my team on LinkedIn. We publish content, newsletters, um my books called Pick a
41:29 Lane you can get from Amazon. Um but you know really just as we’ve been talking real dialogue uh rather than uh emails
41:37 and uh and and social listening. So you know we just love to meet people and we rely all of our business comes from word
41:43 of mouth. So you know we we we really appreciate people that say they sound
41:48 interesting not relevant to me but I know somebody looking like those things we try to pay it forward in return. So
41:55 even if what I’m talking about isn’t 100% for you, but you know somebody there is, we always we’re the underdogs in this world and we appreciate those
42:02 connections and and and believe in relationships. So uh please reach out and would love to to meet and greet any
42:09 of you that are interested in what we do. Absolutely. And we’ll put that in the show notes for the listeners. And like I said, it’s always those second or third
42:15 tier relationships are the ones that actually, you know, into something. So Mark, thank you very much. Appreciate
42:21 having Mark. We appreciate you, buddy. Thank you. Thank you for listening to the M&A
42:26 Launchpad podcast. If you’ve enjoyed today’s podcast and would like to support us, please leave us a rating and a review after you listen. If you’re
42:32 looking for guidance on your next business acquisition or sale, capital to support your next business transaction,
42:38 or to invest in a private equity opportunity, visit equityaunchpad.com to learn more and to connect with our team.
42:44 If you know of an individual who would be a great guest for the show, head over to equityaunchpad.com/nominate
42:51 where you’ll have the chance to refer yourself or someone else to be a guest on our show. I’m Casey Mchu and I look forward to talking with you next week.
