How can big brands can fight back?
Big consumer brands face many challenges today, including retailer pressure, rising commodity prices and new, smaller ‘insurgent brands’. Despite these challenges, big brands are not doomed to die, as the hype and headlines suggest. The same proportion of big US brands (44%) grew share over a 4-5 years period as lost share, as we saw in last week’s post.
What separates the brands that are surviving and thriving in these turbulent times from those that are declining?
We seek to answer this question below, by looking at the growth strategies of winning brands in ‘Britain’s Biggest Brands of 2017’, a report by The Grocer. This report confirms that some big brands are growing and others declining, but with a more negative picture than last week’s US data. 11 Of Britain’s 25 biggest brands grew sales, by a total of £165mill. But the other 14 brands lost sales, with a total decline of £247 mill.
1. Focus your strengths – Pepsi (+7%)
With growth of £29million, Pepsi fared much better than Coke, who saw sales decline by £38million. Key to this success is Pepsi’s ruthless focus on its strongest product, sugar-free Pepsi Max, where is has the edge. This variant drove almost all the growth, reaching £252 million in sales, more than double the value of Coca-Cola Zero Sugar. “Marketing communications and promotions are focused solely on Pepsi Max,” said Phil Sanders, commercial director at Britvic GB. All ATL advertising leads with Pepsi Max, as does the Champions League sponsorship of and new product development.
We posted back in 2010 on Pepsi Max’s strong leadership position, and how hard it was for Coke to take them on in this segment with Coke Zero. One of the enduring advantages Pepsi leverage in my view is a much more appealing name, Pepsi Max, which leads on a positive of taste and refreshment. In contrast, Coca-Cola Zero Sugar focuses on the absence of a negative.
2. Leverage your brand properties – Andrex (+3.2%)
“With the price war rumbling on and value being stripped out of the toilet roll sector by own label’s ascent, Andrex’s £11.2m growth is to be celebrated,” notes the Grocer report. This growth was driven by a combination of raising prices and almost 1million extra unit sales (+0.7%).
A key part of the Andrex success is the enduring effectiveness of the Andrex puppy. This is one of the most powerful brand properties on the planet that I posted on back in 2011, the years of its 40th anniversary. As well as driving awareness and recall, the puppy also triggers associations of softness, gentleness and care. The puppy creates distinctiveness on shelf and also online, being made for an era of social media. It also features on the brand’s strongest performing variant, Gentle Clean, being embossed into the paper and helping drive 16% growth to £39mill.
3. Keep upping your game – Fairy (+5.7%)
Fairy is one of the only household goods brands to grow. As with Andrex, the growth formula has been a double whammy of premiumisation, with a 4.2% improvement in price mix, and volume growth (1.4%).
Fairy is a great example of remembering and refreshing what made you famous, with a consistent series of product upgrades delivering superior performance over decades, not just years. The ‘dark green’ anchor version of Fairy washing-up liquid continues to be supported, on a platform of longer lasting. Fairy has also built a decent 30% share in the auto dish market, with a premium priced proposition based on cutting through the toughest cleaning challenges without the need for pre-rinsing.
4. Drive awareness and penetration – Red Bull (+5.5%)
Red Bull’s sales grew by £14.7m, with the original anchor version leading the way, despite a strong challenge from the Monster brand.
Red Bull shows the importance of driving awareness and penetration on big brands, to keep bringing in new users. The brand does this by combining conventional media with new forms of communication to achieve reach. “We’re reaching more people than ever through our classic cartoon advertising on TV, while speaking to people in the moments they need a Red Bull through smart digital, print and outdoor advertising,” says head of category marketing Gavin Lissimore.
The brand is also an exemplary example of ‘fresh consistency’. The brand has stuck to its core idea, ‘Red Bull gives you wings’, whilst finding new and fresh ways to express this idea at events that then create compelling content for the website and Red Bull TV.
5. Lead category growth- Alpro (+19%)
Red Bull shows that a strong brand can sometimes swim against the tide of trends and grow, in its case the move away from sugary drinks. However, the chances of winning are higher if you build a position in a growth sector, as is the case with Alpro, the biggest brand of plant-based drinks with a 65% share. The brand grew by an impressive 19%, growing sales by £26.7mill to £166mill, despite the presence of several smaller, funkier brands like Oatly and Pip & Nut.
The brand has been playing a leading role in growing the plant-based category. First, Alpro invested heavily in communication to sell the benefits of plant-based products with their campaign, ‘Change a little, enjoy a lot’. Again, as with Red Bull, this integreated campaign included digital but also TV and PR.
In addition, Alpro is working at boosting presence in store. It is playing a ‘category captain’ role by partnering with Tesco to create a new dedicated Dairy Alternatives fixture in stores nationwide, following a successful trial period. Educational leaflets special point-of-sale kits will be used to further drive sales.
In conclusion, the five cases above give some clues as to how big brand can fight back in today’s turbulent times. As the Grocer report writer Rob Brown rightly points out, they have done what big brands are supposed to do: invest in product development and marketing to support premium pricing, providing an alternative to own label and grow categories. In contrast, 49 of the top 100 brand have resorted to slashing prices to try and prop up volume sales, a short-term fix which risks harming both their business and brand equity in the long run.