Barilla buys Goodles to defend a category it already owns

Barilla agreed on 2 September to acquire Goodles, the Santa Cruz better-for-you mac and cheese brand, for an undisclosed sum. The structure is unusually hands-off for a large food group, as The Shelby Report set out: all 73 employees stay, the Santa Cruz headquarters stays, and product, recipes, suppliers and marketing stay with the brand under co-founder and chief executive Jen Zeszut, while Barilla brings manufacturing scale and a route into markets outside the US. Zeszut puts it plainly in the announcement, that more than 90% of people in the US have never tried Goodles, which is the growth case in a single line. The logic is not category expansion, because Barilla already owns pasta. What it is buying is occasion relevance, since Goodles has done the work of making mac and cheese acceptable to health-conscious parents, and that kind of permission is not something an incumbent brand can grant itself. We read it as the clearest version yet of the pattern in consumer dealmaking this year. Incumbents are buying the format-native challengers that defend the categories they already dominate, rather than the ones that would take them somewhere new. (The Shelby Report)