At our “Building the Next $1 Billion Brand” panel at Expo West 2023, cosponsored with Whipstitch Capital, we interviewed leading insurgent founders about the growth stories behind their brands. In this installment, we feature our discussion with Risa Cretella, chief sales officer at Sovos Brands, the parent of premium food banners Rao’s Homemade pasta sauce, Noosa yogurt, and Michael Angelo’s frozen meals. Cretella was brought on as EVP and group general manager of Rao’s when Sovos Brands acquired it in 2017 and has overseen the brand’s remarkable growth. She is a consumer goods veteran who has held many leadership roles in food and beverages.
Q: As an acquirer of insurgent brands, how do you maintain the brand’s DNA and carry on the “founder’s mindset” after acquisition?
Cretella: It starts with understanding that what you acquire is so much more than numbers. It’s the blood, sweat, and tears of the founders and their vision. Acquirers need to have the same belief as the founders that the brand can compete and win in its category in the way that the founding team envisioned. Of course, before Sovos Brands makes an acquisition, we do extensive due diligence and spend a lot of time thinking about the company’s tangible performance and developing a detailed value-creation plan, but that’s only a piece of what the brand is.
Q: Is there anything specific that you always like to see when evaluating insurgent brands?
Cretella: It’s really three big things. First is a view of velocity growth against distribution, which gives us a sense of both the current health of the brand and its future ability to scale. Second is Net Promoter ScoreSM. Third is something we call “brand stretch,” which measures the brand’s ability to support extensions into adjacent categories.
Q: What can you tell us about the playbook for Sovos Brands’ acquisition of Rao’s?
Cretella: The first nonnegotiable piece was staying committed to product quality and the authenticity of the brand. Another was being patient in distribution and aiming for ubiquity across channels while recognizing that we needed to get there intentionally over time. And another piece was investing in excellent price-pack architecture.
Q: Are there any typical obstacles or pitfalls you’ve seen trouble less-successful acquirers?
Cretella: The power of “no” is impossible to overstate. Distribution is a good example. Every product should not be in every store, and putting a product somewhere it shouldn’t be is a surefire way to lose hard-earned momentum and brand equity.
Q: Does the marketing approach change completely as you scale, or do you try to stay the course as much as possible?
Cretella: As the brand scaled into new geographies and retailers, we knew that we would need new investment. It’s necessary to drive continued velocity growth, but equally important is that retailers simply expect it. They’re willing to invest in the product and the brand if you can do the same.
Q: How do you evaluate new products and entry into new categories?
Cretella: We like to target sleepy categories where incumbents have failed to address consumer needs. We’re only interested in categories that serve as a logical extension of our Italian brand. And we need to believe there is real white space in the premium segment of the category. From there, we’ve looked at a variety of different occasions and temperature states and target consumers, but all in keeping with those guidelines. And we’re often saying no to internal teams about exciting potential innovations. Just as it’s important to be patient with distribution, it’s also important to be disciplined about product expansion. Even pizza took several years.
Q: How do you time innovation launches?
Cretella: Innovations succeed when the brand can afford to invest in new products without borrowing too much from the core, not only in terms of capital but in terms of company focus, brand equity, and consumer attention. More than anything, timing innovations is about making sure we don’t distract from the core.
Q: How do you innovate into new categories and address new audiences without losing sight of your core consumer?
Cretella: The nice thing about wondering if something will resonate for your core consumer is that you can go ask them. For us, it’s shoppers who started buying Rao’s sauce in Whole Foods in New York City. So, we can and do go back to them and test new products.
Q: Are there any especially valuable learning moments you’ve had as you’ve grown the business?
Cretella: The first is overreliance on partners. We have many amazing partners, but no matter how strong those relationships are, it’s important to make sure you control your own destiny as much as possible. The second is not letting our humility as a smaller player get the better of us. While we can feel like a small upstart, we can command a seat at the table alongside huge consumer goods companies with enormous category management teams, because our potential for growth and our insight is so, so valuable to retail partners.
(Note: This interview was conducted before Campbell Soup announced its $2.7 billion purchase of Sovos.)