Food & Beverage Companies Add Value with Strategic Brand Extensions

Your brand is one of your company’s most valuable assets. You know that. As with any asset, sustaining your brand’s longevity requires action; dormancy is not an option.

For many companies, brand extension presents an exciting opportunity to strengthen, grow, and preserve a brand. By leveraging a brand’s existing equity to create new product lines, brand extension can open the door to new sales and marketplace possibilities your business may have never thought possible. And while brand extension is certainly an investment, it’s one that’s well worth the risk when the right strategies are in place.

We’ve seen it time and time again: Well-implemented brand extensions can create tremendous value for a company. Devoid of strategy, however, a brand extension can be disastrous.

Successful Brand Extension Relies on Strategy Over Opportunity

Simply put, a viable brand extension needs to align with the fundamental way the market understands your brand. New product development shouldn’t happen in a vacuum; there has to be a strategy behind it.

Unsuccessful brand extensions tend to latch on blindly to the trend du jour, resulting in product lines that exist only to give the customer what your company thinks they want. Divorced from your brand’s purpose and promise, a brand extension will fade as quickly as the latest fad it follows.

The Wrong Way to Extend Your Brand

We know from experience how easy it is for a company to fall into brand extension that’s more opportunistic than strategic (think: Pumpkin Spice Latte).

Piggybacking on the success of popular brands and products is certainly an appealing brand extension tactic, but it’s not sustainable. If your brand extension exists simply to follow the demands of the latest market trend, its eventual failure is all but inevitable.

We’ve already speculated about the trajectory of Diet Coke’s recent brand extension, which was predicated on the popularity surge of sparkling and seltzer water. It’s too early to chalk this up as a brand extension failure, but we have doubts that Diet Coke went into it with the right strategy in mind.

Diet Coke’s new campaign is clearly targeting millennials, who are buying premium water products by the caseload. What Diet Coke failed to pay attention to is why someone would choose to drink a LaCroix or flavored Perrier over a soda in the first place.

The real reason Diet Coke has been losing traction over the last few years is not their flavors or their packaging. It’s their ingredients. Bottling the same old formula in a slim, sexy can is like putting lipstick on a pig. It may look more appealing, but the underlying issue is still there. This is a classic brand extension misstep — creating a product without considering what the actual market needs or wants.

Diet Coke wasn’t misguided in targeting millennials or even jumping on the LaCroix bandwagon. They just missed the mark when it came to brand strategy.

In our opinion, a Diet Coke brand extension that combined the look and feel of the new flavor cans with the ingredients and messaging of Coca-Cola Life (the no-sugar, no-aspartame version of Coke) would have been much more on target.

The Right Way to Extend Your Brand

A successful brand extension has to speak to what is already true about your brand and what the marketplace needs in light of that truth.

If you’re in the health food market, or maybe a vegan or vegetarian yourself, it’s likely you recognize the Hilary’s Eat Well brand — or at the very least recognize their most popular product. For the longest time, Hilary’s brand name was synonymous with just one product (albeit a damn good one), their “World’s Best” Veggie Burger.

In order to capitalize on the success of this veggie burger, Hilary’s took their own stab at brand extension by releasing a line of veggie burger products with different flavor profiles. This flavor diversification approach was, by and large, a success, but Hilary’s wasn’t really gaining additional traction in the marketplace. Most of the customers buying these new veggie burger flavors were already avid loyalists to the brand’s original veggie burgers.

When Hilary’s started working with Retail Voodoo, our team helped them realize they would only be able to grow so much in their current niche (veggie burgers) without finding other places in the store where vegans, vegetarians, and flexitarians would essentially give them permission to show up. In other words, they needed to figure out what was appealing about their brand apart from the draw of their already established and successful veggie burger product.

Ultimately, we helped position them as culinary vegetarian and free-from common allergens — two things that were already true about their brand — because we knew those concepts would resonate with both existing and potential customers. Once that brand promise was established, it was easy for them to find where they could and should go in the grocery store. That strategy has made all the difference for their brand.

A Brand Strategy Firm Can Guide You Through the Brand Extension Process

For well-established brands looking to create new revenue opportunities, brand extension can be a great marketing tactic — but it can be risky to go it alone.

If you’re curious about brand extension or not sure if your current brand extension strategy is on the right track, speaking with a brand strategy firm like Retail Voodoo is a great place to start.

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Founder, President, & Chief Strategist
David was two decades into a design career with a wall full of shiny awards and a portfolio of clients including Nordstrom, Starbucks, Nintendo, and REI. His rocket trajectory veered when his oldest child faced a health challenge of indeterminate origin. Hundreds of research hours later, David identified food allergy as the issue and convinced skeptical medical professionals caring for his child. Since that experience, David and Retail Voodoo have been on a mission to create a cleaner, healthier, more sustainable food system for all.

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