Kingsmill kicked out of Tesco: the risk for follower brands

Tesco has just kicked bread brand Kingsmill out of its stores, according to reports here. Now, this might just be caused by a short-term argument over pricing, margins and promotions. But it could also be an example of what will happen more and more to "follower" brands with weak market positionings.

Here are a few thoughts on what we might learn from Kingsmill's fate

1. Re-focusing on fewer brands

I expect Tesco to be re-focusing on fewer brands over the next couple of years. This is partly in reaction to the growth of the discount brands like Lidl and Aldi. One reason for this growth is the dramatically lower number of product lines they manage versus Tesco and other big supermarkets. This has benefits it terms of cost efficiency, from managing fewer product lines, and I assume negotiating good prices on the products you do stock. But it also makes shopping easier. And my guess is that as shoppers we are getting to like a simplified shopping trip and expect the same simplicity from Tesco. Given that all brands of bread try offer all sorts of product (wholemeal and white; thick, thin and medium etc. etc.), how many brands do you really want to choose between? 

2. Risks of being a follower

Whilst no brand is ever safe in Tesco, you have a much stronger position if you're a brand leader. Kingsmill is Tesco’s third-largest branded bread in Tesco with a 9.1% market share over the past year, according to this report. It lags behind Warburtons and Hovis with 19% and 31% respectively. So, Tesco can offer the top two brands, plus probably three own label offerings (Tesco Value, Tesco Everyday and Tesco Finest). It can probably do without what is in effect a sixth brand. And with sales already down 11% in the last year, before the Tesco de-listing, the brand looks in a weak position.

3. Risks of unclear positioning

Beyond just market share, you need to have a crystal clear positioning to survive on shelf. Warburton's have created a clear positioning about being baked with love and care by the Warbuton family. And this isn't just marketing puffery; Jonathan Warburton runs the family business today, as I posted on here. Hovis is positioned as being "As good today as its always been", building on the brand's heritage as one of Britain's best loved brands. This heritage was amplified in the brand's re-launch a few years ago, helped by more impactful packaging from JKR (below). In contrast, Kinsgmill has never been a brand I really "got". It seems to stand for everyday family bread, but not much more. And maybe this is partly behind Tesco's decision to ditch it.

In conclusion, in a world where retailers are likely to be ever more ruthless in their focus on fewer, better brands,  you need more than ever to sharpen your positioning to be relevant and distinctive, especially if you are a follower brand, not a leader.