Own label progress means brands must put their focus on value

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Brand extensions are notoriously risky and expensive. Between product development, marketing and promotions, suppliers can spend tens of thousands of pounds launching a product that is delisted within weeks.

Latest efforts from Heinz illustrate the risks involved. Britain’s seventh biggest brand has been busy with its ‘Beanz Liberation’ exercise: a concerted expansion of its Beanz brand into a swathe of new categories. That push has involved several innovations, with a mixed success rate.

Freezers currently stock the Beanz take on burgers, nuggets, pizza and ready meals. The chillers, however, are devoid of its NPD. The last one was 2022’s Beanz Houmouz, a two-strong range of “creamy” dip made from haricot beans. It failed to find an audience and quickly disappeared from sale.

A similar story played out in the case of Innocent’s foray into ready meals and KP’s stab at nut butter. While they lasted years rather than months, they were simply too far outside the brands’ core propositions to resonate with shoppers.

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The examples illustrate how far-out forays can be counterproductive. Rather than generating extra sales, brands risk losing touch with consumers at a time when they should be doubling down in their core offer.

It’s a particularly relevant issue as branded prices soar – by at least 10% for 66 of our top 100 – and cash-strapped shoppers increasingly trade down to own-label goods. The supermarkets are doing a good job of convincing shoppers their own lines are just as good as brands. Howard Wright, executive creative & strategic director at Equator Design, points to the launch of lookalike products with similar “branding and packaging styles” for a fraction of the price.

As such, own label finished 2023 with more than 63% volume share and 55% value share of grocery, according to NIQ data. Meanwhile, branded volume sales dipped on average of 3.8% across the top 100.

Against this pressure, a savvy extension or two may be a wise move. But for the most part, brands will need to focus on their core – and convince shoppers they are worth the premium.