Is private equity ruining modern brands?
If the 90s alternative brands were reacting against dominant culture, what are today’s alternatives reacting against? In this clip from You’re Not the Audience, Parliament Creative Director Calvin Ross Carl takes a question from chat, whether private equity is the new corporate force sucking the soul out of small brands, and traces the consolidation cycle from beer to tech to video games. He also shares why Parliament’s best private equity work, for Just Food For Dogs and West Marine, came from firms that cared about a brand’s heritage. It’s from the You’re Not the Audience episode on the 90s, When Brands Stopped Giving a Shit.
Watch the full episode
Outline
Summary
Calvin Ross Carl poses the question the 90s episode leads to: if alternative brands then rejected dominant culture, what should alternative brands reject now? We may not know for a decade, he says, but candidates include dominant tech companies and the rise of far-right ideologies influencing governments and corporations. A viewer offers another: private equity, “the new big corporate brand that sucks the soul out of small, fun brands.”
He walks through the consolidation cycle. Beer was once all small breweries until mid-century consolidation created Budweiser and Coors; craft breweries rose in response, and then AB InBev began buying them up, until craft itself became a meaningless promise. Tech giants bought out small competitors. In video games, large firms rolled studios under one house, leading to mass layoffs and a push for blockbusters over small, profitable projects.
Calvin is clear that private equity isn’t all bad. Parliament has loved working with some firms, including on Just Food For Dogs and West Marine, where the firm genuinely cared about the brand’s heritage and spirit. The challenge is balance: building a genuine brand with conviction when the owner also needs a return.
Highlights
Today’s alternative brands may be reacting against dominant tech, far-right politics, or private equity.
Industries cycle between consolidation and independent reaction.
Craft beer’s rise and buyout turned craft into a meaningless promise.
Video game consolidation has led to layoffs and blockbuster-only thinking.
Private equity can work for a brand when the firm respects its heritage.
Key insights
Consolidation breeds its own counterculture
Every wave of buyouts creates room for an independent reaction, as craft breweries did against Budweiser and Coors. Then the reaction gets bought, and the cycle starts again.
A promise everyone can make means nothing
When every brewer, independent or not, claims craft, the word stops differentiating. Consolidation accelerates that dilution.
Owners who respect heritage protect value
Calvin’s experience with Just Food For Dogs and West Marine is that a brand can thrive under private equity when the firm cares about what made the brand worth buying.
Conviction and returns have to coexist
The hard part of a private equity brand is creating something genuine while the owner needs capital out of it. Brands have to stay mindful of that tension.
Detailed analysis
The clip connects the 90s episode to a live business question. Where 90s rebels pushed against corporate consumerism, a brand under new ownership today faces a similar risk: being stripped of the personality that made it valuable in pursuit of efficiency.
Calvin’s answer isn’t anti-investor. It’s that the outcome depends on the owner. A firm that treats heritage and spirit as assets can turn a brand around; one that treats them as costs speeds up the cycle that makes brands interchangeable.
Conclusion
Private equity isn’t automatically ruining brands, but consolidation has a pattern, and it tends to drain the distinctiveness out of the things it buys.
The brands that come through it well are the ones whose owners protect their heritage while chasing returns, which is exactly where brand strategy earns its keep.
Transcript
So, I guess this is the big question for us now as designers, as branding strategists: if the ’90s were reacting against dominant cultures, what do the alternative brands of today need to be rejecting? What are they reacting against? And the problem is, we won’t know that until about 10 years from now, when we have a better viewpoint.
And I think we’ve got a lot of really big cultural events happening. We have absolutely dominant tech companies. A rise in far-right fascism and far-right ideologies, to the point where it’s influencing governments and the corporations that we interact with daily.
Yeah, Fuel in the Tank says, “Private equity is the new big corporate brand that sucks the soul out of small, fun brands.” Yeah, I mean, I’m curious. This hasn’t happened as much lately, but you see it a lot in very specific niche industries, where there’s this cycle where private equity or massive corporations come in and consolidate.
You had this with the history of beer. For the longest time, the whole beer industry was always microbreweries, every single one. And then in the mid-century era, the ’70s, there was a massive consolidation. Budweiser, all of those folks started buying up every small brewery, converting them over to Bud. And that’s why you got these monoliths of Budweiser, Coors, all of that. It’s because they just took it all over.
And then there was the next cycle, the era of craft breweries, which popped up in response as its own form of counterculture, where it became about craft again, caring about the quality of it. And we started that cycle again a little bit: AB InBev, owners of Budweiser and Anheuser-Busch, those folks started buying up a lot of craft breweries. And that consolidation cycle kind of petered out, just because we got exhausted by craft. We’ve talked about this a lot on this show: the exhaustion of craft, and how it ends up being kind of a meaningless brand promise, because everyone can claim craft.
So you had this cycle where everyone starts buying out, and we definitely hit a big time of private equity doing that in tech. We’ve got these tech giants now who bought out all the little guys, killing any competition.
We talk about games a lot on here, because I love them. You see that in games a lot, where massive corporations and private equity firms start buying up all of the game companies, rolling them under one house. And now we’re seeing the repercussions of that, where there have been mass layoffs in the video game industry, just in an attempt to maximize profit. They’re all aiming for giant blockbuster hits instead of cranking out nice small projects that make a little bit of money. So yeah, private equity is tough.
And the funny thing is, at Parliament, we love working with some private equity folks. Sorry, it’s very, very hot in my office today. It got muggy in here. But there are some private equity folks we’ve really loved working with. There’s a couple, like when we’ve done our work for Just Food For Dogs. Great. Someday that case study will be up. Great brand. They do natural dog food, and I love them. We’ve worked with them a couple times. We worked with them when we did work for West Marine, where it was really about a lot of people who care a lot coming in and investing in these brands. They have to turn things around. And I’ll say that we were lucky that the firm we were working with on those really cared about the actual heritage and actual spirit of the brand. That’s a big difference.
But I mean, they want to make their money, and so it’s really difficult to find that balance of how you create a really genuine brand with conviction when there’s a larger corporation that just wants investor capital out of it. I think that’s something that we always need to be mindful of.
Fuel in the Tank, you said you’re working on The Sims. The Sims is massive, and it’s owned by EA, if I remember right. Was it a Maxis game? EA and Maxis. EA makes incredible games, but they also became a villain at some point. But they’re the only company that can do what they do. So there’s such a complicated mess of understanding how all these things work. Oh, EA just went private? Oh man, I’ve got to do some Googling. I’m out of touch with the EA drama. But anyway, I think those are some things to start thinking about.