Skip to content

From Little Brands, Big Brands (Could) Grow

  • by

Before the world was disrupted by COVID19, those in the business circle were talking about the explosion of small brands, and whether the Laws of Growth still apply with the rise of disruptor brands and e-commerce. Some even argued that the growth would sound the death knell for established big brands. Numerous commentators and consultants also pushed for the need for continuous innovations as an antidote and the route for growth. This kind of belief still persists even now. So, is innovation an alternative route to brand growth, then?

Let’s explore this together.

Brand building is tough – especially when you are small.

At every stage and size of the brand, the focus should be to make it easy for consumers to buy the products, and think of the brand when they need to buy the category. This is how brands grow their penetration and steadily making inroads across millions of non-brand buyers and light category buyers. Chobani’s growth story in the early days was likely to be attributable to Hamdi Ulukaya’s effort in making the product as accessible to the consumers through mainstream grocery stores rather than specialty stores. Just like iPod’s growth was also likely due to Steve Jobs’ great initiative to make the product widely available in 2002 through Bestbuy and Target in the US (along with the wide-reaching iconic silhouette ad campaign). There were probably yogurt brands that were as good as or even better than Chobani, just like there were probably MP3 players that were more innovative than the iPod in the early 2000s.

It’s then concerning and dangerous when smaller brands are sidetracked into activities that are actually harmful for their survival. These activities include introducing too many product options, re-branding or worse still: dismantling the core products by replacing them with new flavours, features, or formulations that the brand managers think would put the brand ahead of its competitors. There are many examples:

  • Mojo was a small local kombucha brand in Australia, that was acquired by Coca Cola in 2018. The brand must have underperformed that the company was compelled to do a major rebranding in July 2022 along with introducing new flavour options. By November 2022, the brand was discontinued. Its demise is unlikely to be missed by the light category buyers out there – they simply don’t know that it existed in the first place.
  • Pebble was a darling project at Kickstarter – a crowdfunding platform. It collected $10.3M in 2012 before Apple Watch appeared in the market. For a small brand, it released three more models in four years (presumably spooked by Apple Watch’s entry into the market in 2015). It was even in the cusp of releasing a product similar to Apple AirTag in 2016 through Kickstarter – five years earlier than Apple. In 2017, the business lost money and was acquired by Fitbit.
  • Burger Theory was a local burger joint in Adelaide, Australia. They used to have only two burger options, and a burger-of-the-month with weird and wonderful combinations (like lamb patty, mint, and watermelon – it sounded weird but it worked!). In 2018 with the guise of going all ethical, they underwent a rebranding, stopped offering their core products, and only served kangaroo patty burgers. Tough luck if consumers were there to get some beef burger. They closed down a year after as diners stayed away from the joint.

Brand building needs dedication and hard work. When a brand is in the market, it needs continuous support. There’s a reason why major manufacturers are likely to manage fewer brands with longer product lines, rather than the other way around – as discovered through a research at the Ehrenberg-Bass Institute. Large manufacturers already have established wide distribution networks and close partnerships with various media agencies. Even when such companies can introduce new brands, they are more likely to leverage their existing ones.

Just think about Coca Cola or Pepsi, technically they have been selling their core products for decades – through various iterations of ad creatives and brand rejigs. Even when they have more flavours and variants, they are more likely to still focus on their core products.

By all means, innovate and evolve the brand when it is necessary. However, this is not the solution when a small brand is struggling, it needs to be known more and be found more. Any available resources should be put into extending distribution and continuous advertising in the widest-reaching media the company can afford. These activities are likely to spur brand growth, rather than the burden of extra production or rebranding cost when resources are really scarce. Small brands can grow into big brands – and the application of the Laws of Growth is not just for the big brands out there, it is especially vital when the brands are small.

Leave a Reply

Your email address will not be published. Required fields are marked *