Innovate or fail

What better way to kick off the day than reading about Britain’s biggest 100 brands, as part of the latest issue of the Grocer.

Whilst sipping a coffee from the local Pret and waiting for my Oat So Simple to heat up, my attention was drawn to lots of familiar brand names in the top 100.  A recurring set of themes emerged that I felt inclined to share with the team:

  1. Brands that are doing well continue to innovate successfully
  2. Tackling current consumer trends by launching new products can help grow and/or defend sales of well-loved brands
  3. Even in tough markets where your core and more established products may be declining, you can be successful, if you innovate and bring new and relevant products to market quickly

Below are a few examples that demonstrate these points very clearly.

  • Arla (ranked 21st) are the fastest growing brand in the top 100 (19% increase year-on-year sales).  Much of this success can be attributed to the switch in 2015 to bring all of their products under the Arla masterbrand.  Their success is also down to Arla having an extremely strong innovation pipeline, with Quark, Best of Both milk and protein cottage cheese all performing well, backed up by a strong ad campaign.  The next phase of Arla’s activity is to push the ‘farmer owned status’ message, to create an all-round dairy health position.
  • Arla’s Lurpak brand (ranked 14th) – whilst the wider butter category sales decline, block butter sales have increased, resulting in strong sales performance for Lurpak.  A drop in retail prices have also helped increase volume sales for the brand.
  • Innocent (ranked 24th) have had a very good year, meaning they are now neck-and-neck with Tropicana as the UK’s leading juice and smoothie brands.  Tropicana have seen a sales decline slightly year-on-year, whilst Innocent have seen sales increases.  They fought the sugar backlash wellby pushing the added health benefits of their smoothies and launching the Gorgeous Greens smoothie, which has sold well. Coconut water sales also rose over the past year.
  • Haribo (ranked 34th).  The confectionery category has taken a hit from the health bug that is everywhere you turn, so to see only a minor drop in sales is seen as a modest result.  New smaller pack formats have sold well, helping people to self-moderate their sweets consumption.
  • Weetabix (ranked 47th): strong NPD with Weetabix Protein launched (to fend off the competitor Fuel10k) which is now worth £5.1m, despite sales of their original Weetabix dropping.

In a nutshell, my takeout is simple to explain, but one that is incredibly hard, time consuming and costly to implement for food and drink manufacturers, but one that is essential to thrive.

  • Established and well-loved brands have to work incredibly hard to defend the favourable market positions they have created for themselves over a number of years – they can’t rely on customer sentiment and brand warmth to maintain their sales. 
  • Brands must keep ahead of current consumer health trends, e.g. the current ‘Joe-Wicks-must-eat-protein-factor’ and the sugar backlash instigated by many celebrity chefs, the media and Government.
  • Getting and keeping listings is increasingly tough for brands, especially in a world where retailers are rationalising their ranges (to increase ease of shop) and pushing their own label offerings in quest of better margins.  Stocking innovative and new products is a great way of getting customers through the door.  Innovation in this case can help win and retain your brand’s spot on the shelf.
  • If you don’t innovate or latch onto these consumer trends, be sure to know that someone else will.