HefeWheaties Tableau

Yesterday General Mills announced that it had partnered with Fulton Brewery to create HefeWheaties: a limited edition brew. The beer is a Hefeweizen, which is traditionally a wheat-based beer, making it a perfect canvas for the Wheaties brand.

Normally when these situations arise, it is because one party is complaining (For example, Lucasfilms’ objection to STRIKES BOCK beer). Not this time. Instead, we have two companies that appear to be on the verge of launching a very successful co-branding venture (just check out the press already, here, herehere ).

Aside from the fact that I’m excited to try this beer, the news provides a number of insights into how to co-brand a product. The craft beer industry in particular lends itself to these experiments: craft breweries regularly create limited run products (aka seasonal beers). They also have a loyal fan base that is active on social media (free advertising!). Also, beer can tie in just about any product either through imitation of flavor, or finding a clever name and pairing it with eye-catching packaging. Yet the lessons that can be gleaned from the HefeWheaties announcement aren’t limited to breweries. Instead, the announcement provides insight for any business considering co-branding.

First, there should be a basis for the partnership. Fulton’s founder and a number of its employees are former General Mills employees. The companies have been connected long before this idea arose. As a result, there was a level of trust and collaboration that is difficult to create without a prior relationship. This doesn’t mean that you can only co-brand with current contacts; it just helps. If you don’t have an established relationship, build one! Collaborate on the co-branding idea rather than simply creating it yourself and then handing it off.

Second (or if you’ve failed lesson one above), the product should feel authentic. With HefeWheaties, consumers want to like the product: both companies are based out of Minneapolis; the wheat connection makes sense; and the past history between the employees and management all contribute to a feeling that the product is an idea, not a scheme. Plus, even though I never ate Wheaties as a kid, I feel some nostalgia for it (kudos to you, General Mills marketing team).

Third, make sure you consider the effect of the co-branding on your original market. We haven’t seen this play out yet with HefeWheaties, but there are appreciable (or at least vocal) numbers of people who don’t like seeing brands they purchase associated with alcohol. For example, Ben & Jerry’s announced earlier this year that it would be partnering with New Belgium Brewing to release a Salted Carmel Brownie Brown Ale. I can’t wait to try it when its released this fall. But Bruce Livingston, CEO of Alcohol Justice had a different view, calling it

[a] crass, corporate greedy move to put a brand name like Ben & Jerry’s on a beer. It’s bad for children — who will start looking at beer as the next step after ice cream.

For our purposes, the merits of the characterization of “ice cream” as a gateway drug are unimportant. A company that co-brands should be aware that its brand and company will be associated with the partnering company, its products, and its industry. Give some consideration as to whether there is any potential for the co-branding to impact your public image and, if so, think about how you’ll respond.

Fourth, and finally, get the legal side taken care of in advance. You’ll likely need a trademark license. Decide whether royalties should be involved and, if so, when and how much. Carefully define the time frame for the license and renewal (or termination) options for both parties. These types of arrangements don’t need to be complicated. However, they became much more complicated after you begin selling product.

Yes, I know, Lesson Number One is work with someone you trust and like. However, business can affect that relationship. The parties’ memories may be a bit fuzzy months or years after you agree to start working together. It is much easier to avoid a dispute if the terms are in writing.

Co-branding doesn’t work for everyone, but it seems like it may work for HefeWheaties. The beer is set to be released on August 26, so perhaps we won’t have to wait long to gauge its success. But what’s really on my mind now is which cereal is next? I think a Peanut Butter Crunch stout could be good. Or maybe a Frosted Flakes porter. If anyone out there can make either of those happen, get a hold of me and let’s figure this thing out.