Every great achievement, discovery or innovation starts with a vision — a dream of what could be. This vision becomes essential as your brewery, distillery or winery prepares for a monumental organizational change like a merger or acquisition (M&A). But equally critical is ensuring all arms of your leadership team are aligned with that vision. Without this alignment, even the best-laid plans can falter.
Leadership alignment is the cornerstone of successful M&A. It sets the tone for the integration process, ensuring that operations and culture are well-planned and executed. Tools like Crafted ERP’s Change Kit provide actionable frameworks to help guide leadership through this often-complicated process.
The 2023 M&A activity in the alcohol industry reflected broader industry trends characterized by caution due to inflation and high interest rates. However, despite these challenges, the spirits category led the charge with 27 deals. This shows the enduring popularity of spirits brands and the growth potential that mergers can unlock. Major spirits deals included Crafted customer Diageo’s acquisition of Don Papa Rum and Bacardi’s full acquisition of Jay Z’s D’Ussé Cognac.
Some might say it’s not a matter of if but when you’ll be involved in an M&A in the bev-alc industry.
Change Management Best Practices: Aligning Leadership Vision
According to the Four Pillars of Change Management, establishing strong leadership early in the process is critical to avoiding common pitfalls, such as turf battles or distrust among teams. This proactive approach enables leaders to drive the M&A process effectively, minimizing uncertainty and anxiety within the organization.
The Crafted ERP Change Kit dissects change management into four pivotal steps, the first of which is ‘Imagining the Vision.’ Leadership alignment at this stage ensures that everyone comprehensively grasps the company’s direction, both in terms of day-to-day operations and the broader cultural shifts that a merger or acquisition entails.
Navigating these early stages means evaluating what the business will do operationally and who the business will be culturally. Merging bev-alc companies must first align on two fundamental components: operations and culture. This alignment helps leadership make more informed decisions as the integration progresses, creating a unified vision that trickles down through every level of the organization.
Operational Alignment: Defining the “What” of the Business
A successful M&A requires clear answers to the question: What will we do? Mergers and acquisitions disrupt operational structures, processes and systems. According to PwC’s 2023 M&A Integration Survey, fortune 1000 companies that achieve post-merger synergies often do so by focusing on business process improvements.
During M&A, it’s essential to audit your current operations. This includes facilities, employee roles, technology platforms (like beverage ERP software) and HR policies. Crafted ERP tools offer practical steps for assessing whether existing systems should be retained or if new beverage production software is required to streamline operations post-merger. Questions like:
- Where are our production facilities located?
- How do our distribution channels work across regions?
- Are there any regulatory requirements that we need to address?
These operational elements are critical in ensuring a smooth transition and reducing disruptions in production and sales. Poorly planned post-merger integrations are a leading cause of deal failure, but focusing on these operational details early can help avoid common pitfalls like staff turnover and productivity loss.
Cultural Alignment: Defining the “Who” of the Business
Not to be overlooked, culture defines how your new company will function day-to-day. When two companies merge, so do their values, mission statements and leadership practices. These elements form the backbone of organizational culture, and without proper alignment, cultural clashes can lead to resistance and failure.
Over 60% of PwC’s respondents included a culture assessment during due diligence and made it part of the go/no-go decision. Nearly a third of deals fail due to culture clashes. This statistic alone emphasizes the importance of aligning culture early in the M&A process. Crafted ERP helps leadership teams define their evolving culture through a structured framework that includes:
- A deep dive into mission and values to determine the core principles of the new organization
- An assessment of working styles to identify potential friction points
- Creating clear communication strategies to articulate this new culture to employees
By doing so, companies can preserve the elements of their culture that matter most while creating a shared identity for the future. This not only fosters a sense of belonging among employees but also helps to manage resistance to change.
Should I(t) Stay or Should I(t) Go? Using the “Keep-Remove-Merge” Framework
Once your leadership team has thoroughly audited these aspects of your organization, it will be time to put the pieces together to form the vision for your newly formed, newly evolved business. When considering aspects of the post-change organization, you’ll need to ask: ‘Will it stay, will it go and what will the new version look like?’
Maybe you’ll decide that having everyone on the same financial system is critically needed, bubbling an ERP software selection project to the top of the list. Maybe you’ll see areas where streamlining communication will provide ROI, and the creation of new roles takes priority. Maybe you’ll want to take a fresh look at your employee total compensation packages and develop new incentives to demonstrate the immediate benefits of the change.
The Crafted ERP Change Toolkit has hands-on activities to help you and your team plot a roadmap to get you from dream to reality. If you haven’t downloaded it already, we invite you to do so and follow the steps outlined within to truly crush change management like a boss.
Once leadership has aligned on the operational and cultural vision, it’s time to determine which aspects of the company should remain, which should be removed, and which should be merged. The ‘Keep-Remove-Merge Worksheet’ from the Crafted ERP Change Kit is invaluable for this stage. It enables leadership to:
- Identify processes and systems that are critical to the company’s continued success
- Decide which elements of each company should be retained to avoid disruption
- Explore opportunities to merge functions and technologies for greater efficiency
This stage is also where beverage ERP software implementation becomes a key discussion point. According to M&A best practices, unified systems like Crafted ERP can significantly streamline post-merger integration. Whether consolidating financial systems or improving internal communication tools, ERP software implementation is pivotal in reducing bottlenecks and improving transparency.
Ready to Crush Your M&A with Crafted ERP?
The alcohol industry’s M&A activity in 2023 demonstrated the sector’s resilience and growth potential, especially in spirits and premium brands. Players like Bacardi, E&J Gallo, and Molson Coors capitalized on strategic opportunities, and with the right tools, you can too.
A successful merger or acquisition in the alcohol industry requires more than just a solid vision. It demands leadership alignment, operational excellence and a focus on culture.
Whether you’re just beginning your M&A journey or in the thick of it, having the right tools at your disposal makes all the difference. Ready to crush your M&A like a boss? Download the Crafted ERP Change Kit today and start building the future of your business.
