Scale isn't strategy: Why bigger doesn't mean better in drinks branding

The conversation around consolidation in spirits and wine has shifted. A decade ago, the strategic logic was clean: merge portfolios, capture scale economies, access new geographies, strengthen distribution. Bigger was better.

That thesis is breaking down.

The drinks category is fragmenting faster than consolidators can absorb it. Premiumisation, craft disruption, direct-to-consumer models, and rapidly shifting consumer expectations around sustainability and authenticity are reshaping what competitive advantage actually looks like. In this environment, size without strategic clarity becomes a liability, not an asset.

The Scale Paradox

For the brands inside a mega-portfolio, scale can dilute the very things that made them valuable in the first place.

Consider what happened with Kraft Heinz. The merger promised operational efficiency and shared distribution muscle. Instead, years of cost discipline and reduced brand investment contributed to a $15 billion write-down. As consumer preferences shifted toward fresher, more authentic products, the portfolio had lost cultural relevance. Scale had replaced strategy.

The drinks industry watched that carefully. Yet the impulse toward consolidation persisted, often with the same underlying assumption: that owning more brands, accessing more routes to market, and spreading costs across a larger base would automatically strengthen the business.

But in drinks, the equation is different.

What Actually Drives Value in Spirits and Wine

Over the past decade, the category has moved decisively toward premiumisation. That shift has completely rewritten the rules of brand building.

In a premiumised market, what drives consumer choice isn't the availability of your brand. It's the credibility of your brand. Perceived authenticity, heritage, craftsmanship, provenance these aren't marketing claims in premium spirits and wine. They are the product itself.

And they are fragile.

A mega-entity can own a premium wine or spirit. But ownership doesn't guarantee that the brand retains the perception of independence, craft, or cultural relevance that attracted consumers to it in the first place. When consumers sense that a brand has been absorbed into a larger machine, they often vote with their wallets by moving to a competitor who still feels like an independent actor.

This is not a perception problem. It is a strategy problem.

The Agility Advantage

There's a second dynamic at play: speed.

The drinks category is moving at a pace that large, complex organisations struggle to match. New categories emerge (RTD, no/low alcohol, premiumisation across beer). Consumer expectations shift (sustainability, transparency, social positioning). Cultural trends accelerate or collapse within quarters. A 200-brand portfolio run by a centralised marketing team cannot pivot as quickly as a focused player can.

Consider a hypothetical scenario: a mega-portfolio owns a craft gin brand that has built its reputation on sustainability credentials. A competitor launches a product with genuinely superior environmental impact. The mega-entity's response requires: sign-off from regional teams, alignment across the portfolio, risk assessment across IP and positioning, integration with centralised procurement, approval from multiple layers of leadership.

A smaller, drinks-focused agency or brand can make that decision in a week.

In a market where premiumisation rewards the brands perceived as leading cultural conversations, not following them, that agility gap is material.

The Real Question

The question facing drinks businesses considering growth isn't "Can we own more brands?" It's "Can we give each brand a clear and distinctive role in consumers' minds?"

If the answer is no, then scale is a trap, not a tool.

Successful consolidation in drinks requires something different than what worked in FMCG or pharma. It requires:

A shared brand philosophy. Not just operational fit, but genuine alignment on what each brand stands for, how it should evolve, and which cultural conversations it should lead. If two large, independently-minded brands are fundamentally misaligned on brand strategy, integration will generate friction that undermines both.

Commitment to continued investment. Size does not replace brand building. In fact, it increases the need for it. Every brand in a large portfolio still requires resources directed to brand strategy, cultural relevance, and consumer connection. Cost synergies that come from underinvesting in brand building will eventually cost far more than they save.

Genuine speed to market. This is the hardest one. Large organisations are built for consistency and control, not speed. Agile decision-making in a large portfolio requires deliberately choosing to reduce friction, delegate authority, and accept some level of autonomous action by regional or brand teams. Most consolidators fail to do this. They optimise for efficiency and lose the agility that made the acquisition valuable.

Cultural coherence. When you merge two organisations, you inherit two distinct cultures, two decision-making styles, two distinct views on risk. Brand integration happens in that cultural space. If that space is characterised by misalignment or friction, the brands suffer.

What This Means for Drinks Leadership

The lesson isn't that scale is bad. Many drinks businesses genuinely need greater reach, stronger distribution, and deeper resources to compete.

But the most durable competitive advantage in drinks isn't scale. It's clarity.

Clarity about what your brands stand for. Clarity about how they create value for consumers. Clarity about which cultural conversations they lead. Clarity about the investment required to keep them relevant.

Scale without clarity amplifies mistakes. Clarity without scale is increasingly viable. A focused, nimble, drinks-fluent organisation can out-compete a sprawling portfolio that has lost its way.

In premiumised categories, where consumer choice is driven by perceived authenticity and cultural relevance, that's not a limitation. It's the competitive edge.

Anna Hamill is the MD for Denomination London. This article was first published in Business Reporter in June 2026.