From clothing to crisps, brand extensions are getting ever more weird and wonderful. But do they have the legs to stay the course, asks Simon Creasey
There's quirky and then there's downright outrageous.
If you thought Unilever was testing Marmite lovers' affections to the limit with its launch of a savoury cereal bar last year, it went even further last week by unveiling Marmite-flavoured chocolate.
Thankfully (one suspects even for fans), the £3 Very Peculiar Milk Chocolate Bar is limited edition (it's part of the brand's festive gifting range), but it is indicative of the increasingly daring brand extensions hitting supermarket shelves at the moment.
Over the past couple of months, Peperami and Tabasco pizzas have launched, alcoholic ginger beer brand Crabbie's has brought out ginger-flavoured nuts and sausage supplier The Black Farmer has leapt into fashion with rural clothing for trendy urbanites.
After years churning out uninspired but safe line extensions (think new flavours, new formats, new packs), brand owners have thrown caution to the wind and gone category-hopping mad, it seems. The question is: why now and are some of them in danger of stretching their brands too far?
A host of companies from Coca-Cola to Kellogg's have stretched their brands from their core categories into new territories in the past. But more recently, the focus has been on developing variants of the core product or as the experts put it, line extension rather than brand extension.
Given the current state of the economy, one might have expected more of the same. Yet, against all the odds and thanks in no small part to the precedent set by Marmite, out-and-out brand extensions have become very much the order of the day. The thinking is simple. A well-executed extension will refresh a brand, attract new audiences, secure more facings in-store and create a new revenue stream. Like their humbler line extension cousins, brand extensions also avoid the expense of launching entirely new brands and allow companies to leverage established brand equity in new and hitherto untapped markets.
Yes it can go wrong and inevitably there have been casualties Heinz's sandwich line folded in March 2009 six months after launch, the New Covent Garden Soup Co scrapped its Sprout ready meals last September also after just six months on shelf, and Green Giant axed its pouch soups this March after less than two years.
Lessons seem to have been learnt from such failures, however, and most of today's category hops look more like well-calculated bets than blind punts. It's no coincidence that many involve small or quirky brands and that the brand names tend to be writ large (unlike New Covent Garden's Sprout or Coca-Cola's Dasani, the example many experts cite as one of the earliest and biggest UK brand extension flops).
They also tend to fall into one of two camps. Some exploit obvious synergies between the brand and the new category it is entering. Take Crabbie's ginger-flavoured nuts. Most consumers see beer and snacks as a perfect marriage. Ditto Tabasco and pizza, says Frank Bartlett, head of partnership at AB World Foods.
The company launched three Tabasco pizzas available exclusively at Tesco in August. "Tabasco is widely used across a number of food occasions but pizza features very highly in our usage and attitude research," says Bartlett. "We've been working with pizza partners promotionally to drive that usage for years."
However, some extensions require more of a leap of faith. Mackie's, a family-owned Scottish company that's been producing ice cream for 25 years, certainly raised a few eyebrows last year when it branched into crisps especially when it added the likes of Haggis and Cracked Black Pepper and a fiery Scotch Bonnet Chilli flavour to more conventional lines such as Sea Salt and Vinegar, and Mature Cheddar and Onion.
The dangers of such a move were not lost on the company, which conducted extensive consumer research before last July's launch. "We've worked for 25 years to build the brand and there was a risk something could have gone wrong if we'd released a product the public didn't like," says marketing director Karin Hayhow. "But the consumer feedback has been great."
So much so that it has secured listings with most of the multiples in Scotland and is now looking further afield. "We're very pleased with the listings we've managed to achieve," says Hayhow. "But there's still a huge opportunity for this product."
Mackie's foray into crisps would not have been possible without the establishment of a joint venture with Scottish potato processor Taypack. Because they allow companies to share or mitigate the risks, such partnerships have become a popular way of bringing brand extensions to market.
And the licensing deal is the most obvious manifestation. Tabasco teamed up with Bakkavör to launch its pizzas and the latter was also Unilever's partner for its Peperami pizzas. "Licensing is a valuable asset for us to use and maximise to help us grow some of the brands in our portfolio," says Julie McCleave, commercial manager for licensing at Unilever. "Marmite has spearheaded this but we're now looking across the board at our food and at our home and personal care portfolio."
Marmite, the poster child of brand extension, has made extensive use of licensing. The chocolate, produced by gifting partner Kimm & Miller, is just the latest in a long list of products now made under license. Last month, Unilever licensed Ixxy's Bagels to make Marmite bagels, adding to a roster that already includes crisps, nuts, breadsticks and rice cakes.
Crabbie's is another fan. It struck a deal with nut processor Sun Valley to launch its range of ginger-flavoured nuts. Richard Clark, head of innovation at Halewood International, owner of the Crabbie's brand, says consumers get the best of both worlds from the deal. "They get the brand they understand, buy, believe in, trust and enjoy and then they get the benefits of a product that has been manufactured, sold, merchandised and marketed by the expert in that category."
Whatever route you take, the key to success is understanding and sticking to the brand's values, according to The Black Farmer's Wilfred Emmanuel-Jones. "A lot of brands can't travel into other categories because the consumer doesn't believe it," he says. "Whatever you do with a brand it has to be true to the brand truth."
It might seem strange that Emmanuel-Jones, who has already added gluten-free sauces and fruit juices to his premium sausage range, has launched his own fashion range. But the extension remains true to The Black Farmer brand, he insists.
"If I hadn't built up a reputation over the past six years as a man who likes style and clothing and just launched a clothing range, people would think 'what's that all about? It doesn't make sense'. What normally happens with extensions in food is that people tend to go down the food route because that's all they know. The whole basis of The Black Farmer is that it's more than just a food brand. The brand can do clothing and one of the other things we're looking at is restaurants. The brand has the sort of stretch most people would die for."
There are many brands that won't stretch nearly that far. Even Richard Branson failed to make a success of Virgin Cola and it remains to be seen if Marmite's extension into cereal bars last October or indeed chocolate will amount to anything more than expensive stunts. "The jury is still out on whether Marmite cereal bars were a great bit of PR-able visibility for Unilever, a valid gap in healthier snacking or just downright crazy," says Kate Waddell, MD of consumer brands at brand agency Dragon Rouge.
Further outings that could prove to be a category hop too far include Harley-Davidson cake-decorating kits, Diesel wine and Jamie Oliver's ingredient and flavour-based Scent and Savour home fragrances. Waddell says all three run counter to what brand extensions should be all about.
"Real brand extension should take the core equities of a brand and represent them in a way that makes sense and doesn't erode the parent brand while also bringing something fresh, new and unique to that brand, to another category, experience or service."
As Hellmann's hopes it has done with its new tomato ketchup, which went exclusively into Tesco last year before rolling out nationwide in March. Four months on and the brand extension had delivered sales of £1.5m the only question now is whether the public will repeat purchase and stick with it for the long term.
Unfortunately for Warburtons, not as many consumers have had a chance to repeat purchase SnackaDoodle and ChippidyDooDaa as it would have liked. Rollout of the bread brand's first-ever snacks, launched in March, was severely affected by a fire at the company's Bolton bakery in July, though, believes Waddell, if the issues are resolved, the range could have a bright future."I was sceptical at first but the presentation, the flavour, delivery and the wholesome, honest credentials seemed to be there in spades."
Ultimately, success depends on far more than whether the product tastes good or meets consumer needs. Alongside the other prerequisites of effective marketing and distribution, the brand extension must ultimately be credible in the eyes of the consumer. Get that vital aspect wrong and irrevocable damage could be done to the parent brand. Get it right however, and the rewards are vast.
That's why there are likely to be plenty more brand extensions over the coming months. Unilever has even set up a dedicated licensing division six months ago to drive activity around its vast array of brands.
"We've developed a strategy over the next two to three years across the food, home and personal care category," says McCleave. "The first one that you will see is 'I Can't Believe It's Not Cheddar' in January 2011 and that will be followed by a number of other developments next year."
Marmite ice cream anyone?
Hit, miss or maybe?
Mackie's Crisps
Hopping from the freezers to the snack aisles may have seemed like a leap of faith for the Scottish ice cream company but the punt seems to have paid off. Since take-off in July 2009, Mackie's has shifted 3.5 million bags of crisps, racking up a cool £6m. Mackie's is now eyeing the rest of the UK for a further roll-out of the crunchy brand extension.
Hellmann's Ketchup
After a low-key launch in Tesco last year, Unilever took its Hellmann's ketchup extension nationwide in March. Four months on and sales had hit the £1.5m mark [SymphonyIRI]. Unilever claims 56% of consumers preferred Hellmann's to Heinz in taste tests, despite the fact it is lower in sugar and salt. But is Heinz quaking in its boots yet?
The Black Farmer clothing
A sausage maker branching into fashion? It would never wash if Wall's tried it, but dapper entrepreneur Wilfred Emmanuel-Jones aka The Black Farmer is confident there's a market for his distinctive new clothing range, which includes his trademark Stetson and Persian lamb scarves. It's currently for sale online and he is looking for retail partners.
Covent Garden ready meals
New Covent Garden Co entered the meat-free ready meal market in February 2009, declaring that existing offerings were "blighted by lack of innovation" and that the new range would appeal to the growing legion of meat reducers. Its confidence was misplaced. Six months later, having made it as far as Waitrose, the product was pulled.
Marmite chocolate
Marmite has done the unthinkable and branched into chocolate. Okay, Very Peculiar by Marmite is decidedly niche, selling for £3 a bar in Debenhams, BHS and Robert Dyas, but that doesn't make it any less bold. It hit the shops on Monday as part of a Christmas range. Will it be the ultimate stocking filler? It'd certainly be one you either love or hate.
Heinz sandwiches
Were Heinz's branded sandwiches in the wrong place at the wrong time? The 19-strong range was launched in October 2008 but died a death in March when manufacturer Freshway Foods went into administration. At the time Heinz insisted sales had been "in line with expectations". Even so, seven months on, the range is yet to resurface.
There's quirky and then there's downright outrageous.
If you thought Unilever was testing Marmite lovers' affections to the limit with its launch of a savoury cereal bar last year, it went even further last week by unveiling Marmite-flavoured chocolate.
Thankfully (one suspects even for fans), the £3 Very Peculiar Milk Chocolate Bar is limited edition (it's part of the brand's festive gifting range), but it is indicative of the increasingly daring brand extensions hitting supermarket shelves at the moment.
Over the past couple of months, Peperami and Tabasco pizzas have launched, alcoholic ginger beer brand Crabbie's has brought out ginger-flavoured nuts and sausage supplier The Black Farmer has leapt into fashion with rural clothing for trendy urbanites.
After years churning out uninspired but safe line extensions (think new flavours, new formats, new packs), brand owners have thrown caution to the wind and gone category-hopping mad, it seems. The question is: why now and are some of them in danger of stretching their brands too far?
A host of companies from Coca-Cola to Kellogg's have stretched their brands from their core categories into new territories in the past. But more recently, the focus has been on developing variants of the core product or as the experts put it, line extension rather than brand extension.
Given the current state of the economy, one might have expected more of the same. Yet, against all the odds and thanks in no small part to the precedent set by Marmite, out-and-out brand extensions have become very much the order of the day. The thinking is simple. A well-executed extension will refresh a brand, attract new audiences, secure more facings in-store and create a new revenue stream. Like their humbler line extension cousins, brand extensions also avoid the expense of launching entirely new brands and allow companies to leverage established brand equity in new and hitherto untapped markets.
Yes it can go wrong and inevitably there have been casualties Heinz's sandwich line folded in March 2009 six months after launch, the New Covent Garden Soup Co scrapped its Sprout ready meals last September also after just six months on shelf, and Green Giant axed its pouch soups this March after less than two years.
Lessons seem to have been learnt from such failures, however, and most of today's category hops look more like well-calculated bets than blind punts. It's no coincidence that many involve small or quirky brands and that the brand names tend to be writ large (unlike New Covent Garden's Sprout or Coca-Cola's Dasani, the example many experts cite as one of the earliest and biggest UK brand extension flops).
They also tend to fall into one of two camps. Some exploit obvious synergies between the brand and the new category it is entering. Take Crabbie's ginger-flavoured nuts. Most consumers see beer and snacks as a perfect marriage. Ditto Tabasco and pizza, says Frank Bartlett, head of partnership at AB World Foods.
The company launched three Tabasco pizzas available exclusively at Tesco in August. "Tabasco is widely used across a number of food occasions but pizza features very highly in our usage and attitude research," says Bartlett. "We've been working with pizza partners promotionally to drive that usage for years."
However, some extensions require more of a leap of faith. Mackie's, a family-owned Scottish company that's been producing ice cream for 25 years, certainly raised a few eyebrows last year when it branched into crisps especially when it added the likes of Haggis and Cracked Black Pepper and a fiery Scotch Bonnet Chilli flavour to more conventional lines such as Sea Salt and Vinegar, and Mature Cheddar and Onion.
The dangers of such a move were not lost on the company, which conducted extensive consumer research before last July's launch. "We've worked for 25 years to build the brand and there was a risk something could have gone wrong if we'd released a product the public didn't like," says marketing director Karin Hayhow. "But the consumer feedback has been great."
So much so that it has secured listings with most of the multiples in Scotland and is now looking further afield. "We're very pleased with the listings we've managed to achieve," says Hayhow. "But there's still a huge opportunity for this product."
Mackie's foray into crisps would not have been possible without the establishment of a joint venture with Scottish potato processor Taypack. Because they allow companies to share or mitigate the risks, such partnerships have become a popular way of bringing brand extensions to market.
And the licensing deal is the most obvious manifestation. Tabasco teamed up with Bakkavör to launch its pizzas and the latter was also Unilever's partner for its Peperami pizzas. "Licensing is a valuable asset for us to use and maximise to help us grow some of the brands in our portfolio," says Julie McCleave, commercial manager for licensing at Unilever. "Marmite has spearheaded this but we're now looking across the board at our food and at our home and personal care portfolio."
Marmite, the poster child of brand extension, has made extensive use of licensing. The chocolate, produced by gifting partner Kimm & Miller, is just the latest in a long list of products now made under license. Last month, Unilever licensed Ixxy's Bagels to make Marmite bagels, adding to a roster that already includes crisps, nuts, breadsticks and rice cakes.
Crabbie's is another fan. It struck a deal with nut processor Sun Valley to launch its range of ginger-flavoured nuts. Richard Clark, head of innovation at Halewood International, owner of the Crabbie's brand, says consumers get the best of both worlds from the deal. "They get the brand they understand, buy, believe in, trust and enjoy and then they get the benefits of a product that has been manufactured, sold, merchandised and marketed by the expert in that category."
Whatever route you take, the key to success is understanding and sticking to the brand's values, according to The Black Farmer's Wilfred Emmanuel-Jones. "A lot of brands can't travel into other categories because the consumer doesn't believe it," he says. "Whatever you do with a brand it has to be true to the brand truth."
It might seem strange that Emmanuel-Jones, who has already added gluten-free sauces and fruit juices to his premium sausage range, has launched his own fashion range. But the extension remains true to The Black Farmer brand, he insists.
"If I hadn't built up a reputation over the past six years as a man who likes style and clothing and just launched a clothing range, people would think 'what's that all about? It doesn't make sense'. What normally happens with extensions in food is that people tend to go down the food route because that's all they know. The whole basis of The Black Farmer is that it's more than just a food brand. The brand can do clothing and one of the other things we're looking at is restaurants. The brand has the sort of stretch most people would die for."
There are many brands that won't stretch nearly that far. Even Richard Branson failed to make a success of Virgin Cola and it remains to be seen if Marmite's extension into cereal bars last October or indeed chocolate will amount to anything more than expensive stunts. "The jury is still out on whether Marmite cereal bars were a great bit of PR-able visibility for Unilever, a valid gap in healthier snacking or just downright crazy," says Kate Waddell, MD of consumer brands at brand agency Dragon Rouge.
Further outings that could prove to be a category hop too far include Harley-Davidson cake-decorating kits, Diesel wine and Jamie Oliver's ingredient and flavour-based Scent and Savour home fragrances. Waddell says all three run counter to what brand extensions should be all about.
"Real brand extension should take the core equities of a brand and represent them in a way that makes sense and doesn't erode the parent brand while also bringing something fresh, new and unique to that brand, to another category, experience or service."
As Hellmann's hopes it has done with its new tomato ketchup, which went exclusively into Tesco last year before rolling out nationwide in March. Four months on and the brand extension had delivered sales of £1.5m the only question now is whether the public will repeat purchase and stick with it for the long term.
Unfortunately for Warburtons, not as many consumers have had a chance to repeat purchase SnackaDoodle and ChippidyDooDaa as it would have liked. Rollout of the bread brand's first-ever snacks, launched in March, was severely affected by a fire at the company's Bolton bakery in July, though, believes Waddell, if the issues are resolved, the range could have a bright future."I was sceptical at first but the presentation, the flavour, delivery and the wholesome, honest credentials seemed to be there in spades."
Ultimately, success depends on far more than whether the product tastes good or meets consumer needs. Alongside the other prerequisites of effective marketing and distribution, the brand extension must ultimately be credible in the eyes of the consumer. Get that vital aspect wrong and irrevocable damage could be done to the parent brand. Get it right however, and the rewards are vast.
That's why there are likely to be plenty more brand extensions over the coming months. Unilever has even set up a dedicated licensing division six months ago to drive activity around its vast array of brands.
"We've developed a strategy over the next two to three years across the food, home and personal care category," says McCleave. "The first one that you will see is 'I Can't Believe It's Not Cheddar' in January 2011 and that will be followed by a number of other developments next year."
Marmite ice cream anyone?
Hit, miss or maybe?
Mackie's Crisps
Hopping from the freezers to the snack aisles may have seemed like a leap of faith for the Scottish ice cream company but the punt seems to have paid off. Since take-off in July 2009, Mackie's has shifted 3.5 million bags of crisps, racking up a cool £6m. Mackie's is now eyeing the rest of the UK for a further roll-out of the crunchy brand extension.
Hellmann's Ketchup
After a low-key launch in Tesco last year, Unilever took its Hellmann's ketchup extension nationwide in March. Four months on and sales had hit the £1.5m mark [SymphonyIRI]. Unilever claims 56% of consumers preferred Hellmann's to Heinz in taste tests, despite the fact it is lower in sugar and salt. But is Heinz quaking in its boots yet?
The Black Farmer clothing
A sausage maker branching into fashion? It would never wash if Wall's tried it, but dapper entrepreneur Wilfred Emmanuel-Jones aka The Black Farmer is confident there's a market for his distinctive new clothing range, which includes his trademark Stetson and Persian lamb scarves. It's currently for sale online and he is looking for retail partners.
Covent Garden ready meals
New Covent Garden Co entered the meat-free ready meal market in February 2009, declaring that existing offerings were "blighted by lack of innovation" and that the new range would appeal to the growing legion of meat reducers. Its confidence was misplaced. Six months later, having made it as far as Waitrose, the product was pulled.
Marmite chocolate
Marmite has done the unthinkable and branched into chocolate. Okay, Very Peculiar by Marmite is decidedly niche, selling for £3 a bar in Debenhams, BHS and Robert Dyas, but that doesn't make it any less bold. It hit the shops on Monday as part of a Christmas range. Will it be the ultimate stocking filler? It'd certainly be one you either love or hate.
Heinz sandwiches
Were Heinz's branded sandwiches in the wrong place at the wrong time? The 19-strong range was launched in October 2008 but died a death in March when manufacturer Freshway Foods went into administration. At the time Heinz insisted sales had been "in line with expectations". Even so, seven months on, the range is yet to resurface.
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