Why food companies own smaller brands

Question

Was drinking Pure Leaf tea and saw that it was owned by Pepsi. Why don’t they call it Pepsi tea?

In: Economics

Answer 1

I studied marketing at university. Two reasons. 1. The brand name is probably already established and has loyal followers/buyers. 2. ‘Pepsi tea’ could damage the sales. Large companies buy smaller brands that already have great sales. so if one day, Pepsi ceases to be marketable, the company already owns other viable brands.