One FMCG product brand or many?
- 10 hours ago
- 7 min read
The three ways FMCG brands win the shelf when branding and marketing multiple products in the supermarket.
When you walk down the supermarket aisle of soda drinks, the first brands you’re likely to see are Coca-Cola. Then Sprite. Then Fanta. All three are owned by Coca-Cola. Travel a little further and you see Schwepps Lemonade, and Schwepps other soda varieties all under the same brand name.
When you walk down the confectionery aisle in the chocolate section, you’ll see Cadbury’s 25 different products. Followed by Lindt’s 15 different products. Travel a little further and you see Maltesers, Mars, Snickers, and Twix, all four owned by Mars.
If you have a new product brand with many variants in the same category, there are three ways of approaching this from a brand perspective.
One is to create multiple brands (a house of brands) for each product variant, even if they’re in the same category on the supermarket shelf aisle - Coca-Cola, Sprite, Fanta.
The second is to have one brand (a branded house) and each product variant is a variation in look or description to denote the different products. Lindt easter bunny, Lindt balls, Lindt 75% Dark Chocolate.
Then the third option is to have a main brand in addition to a secondary brand for each product, where both appear on the product (endorsed brands). Think Kellogg's Corn Flakes, and Kellogg's Froot Loops. Kind of similar to the first option with a house of brands, but with the overarching brand also present.
These three forms of brand building and marketing, is a practice known as brand architecture, and will determine how you position your brand in the market as a total newcomer.
But which do you go for?
The house of brands
If it’s Pepsico, Coca-Cola Company, Mars or Unilever, these parent companies serve as the commercial backbone entity that manage their subsidiary house of consumer facing brands. What a mouthful that sentence was. I feel yuck just writing it. But this is the model that these multinational companies operate to get you to buy their lineup of different consumer brands you see on the supermarket shelves.
Many of them operate this way because they’ve acquired most of these brands into their house of brands, but it also allows them to vary their positioning (what people remember them for, how they come to mind and why they buy) depending on a specific product offering.
Which for a newcomer brand to the market, this means that if you want to have the flexibility of being one type of brand based on a set of values or core benefits to offer a specific product, and not contradict yourself by offering another product that flies in the face of your first product’s values or benefits. Say for example you wanted to offer one product positioned with responsibly sourced ingredients, while the other other product you want to offer is too difficult to produce with responsibly sourced ingredients. In this instance you have the ability to create two separate brands for each product and position them based on each product’s qualities that mean something different to consumers.
Another reason you might decide to develop multiple product brands is quite frankly the grossest form of capitalism I’ve come across, though each to their own. And that is to create two identical products but market them to consumers as two completely different brands. I say it’s the grossest, because you’re essentially placing double the amount of products on the shelf to acquire more shelf space and market share without much meaningful differentiation. To be honest this doesn’t happen much with independent product brands in supermarkets as they don’t want you to have category dominance. But it’s becoming more prevalent from the actual supermarkets themselves that develop their own product brands that appear as independent brands, as well as having the same product with their supermarket branding on the front as a ‘home brand’. So it’s like what Aldi does, but instead you have one Supermarket-owned home brand, one Supermarket-owned private label product brand, and one or more independent product brands, all vying for the same attention but at two-thirds advantage to the supermarket in that example, especially if they both undercut the price of the independent product brand.
The downside of choosing this path is you now have 2 (or more) brands to manage, rather than 1. So that’s two websites. Two social media accounts on every social media platform. Two sets of brand messaging. Two visual identities. You get the point. It’s more to manage.
So the pros are that you have the ability to either differentiate your brands based on the branding and not just the feature/benefit differences so they don’t create conflict or contradict one another. While the con is that it requires far more capacity (time, money, effort) to market multiple brands rather than a single brand.
The Branded House
This is of course the most widely used type of brand architecture, especially for start ups. It keeps everything you do under the one banner for consumers to recognise, remember, think of and seek out and it allows for a far greater ease of marketing the brand.
So essentially a branded house is the opposite of a house of brands in terms of pros and cons.
Being tied to a set of values and promises that your brand is positioned as, could be seen as a limitation of brand growth. Which might mean you can’t reach a greater mass market. Effectively niching down is a benefit at the start when you’re finding your first customers, but as you grow, it’s potentially harder to grow laterally, especially in new categories. For example, if you were a dairy brand and wanted to extend into crackers or chips. It really comes down to taking across that brand equity into a new category and if it translates well. In that kind of lateral growth example, this is where the House of Brands or Endorsed Brands can potentially work better.
That said, a brand like Yamaha has done this with everything from pianos to outboard boat motors. So it’s not to say you can’t. It’s only to say it comes down to your strategy of how your brand is positioned so that consumers create strong associations between what you offer and what they need. Meaning that it’s not just about slapping your logo on a new product and hoping it works.
Endorsed Brands
As mentioned above, an endorsed brand architecture works best and is often used when existing brand equity is already established. The best example of this model is Kellogg’s.
It’s not to say you couldn’t have an overarching brand present on each product in different categories and those products have their own brand. But if that brand you have as the ‘endorser’ doesn’t carry a level of equity (a greater level of value a consumer places in the brand over its features/benefits/price), then it’s kind of meaningless at the start.
What it does mean however is that you can still market your product brands under one overarching brand platform and structure to your marketing. Be it the website, social media, ads, etc. And you have the flexibility to enter as many categories as possible.
And I tell you what, this could be the most underrated or at best, the most underutilised model of branding for products you’ll find in the supermarket. As it sets the foundations for mass market growth with potential to be a kind of ACME brand (A Company that Makes Everything).
The only issue is that positioning piece over the long term. A brand’s strategy is the most overlooked aspect of developing and growing a brand, and determining your brand architecture forms part of that strategy. And it’s not a means to an end either, as it will be ever evolving as you grow. So how you position the endorsing brand will dictate how much weight that logo at the top of your product will actually hold in terms of brand equity value when you enter a new category with a new product brand beneath it.
Which should you pick?
As a newcomer to the market, my advice is usually to pick the Branded House option, because it’s far more viable to grow one brand rather than multiple brands based on likely start-up business capacity. The other two options are typically leaned into by global companies that have tremendous amounts of capacity to manage multiple brands and leverage those legacy brands, that after many decades have inherent value just in the name.
You could really disrupt the market with multiple brands to take the gloss off established brands with a House of Brands. That said, if you want consumers to buy both, we’ve got to realise it’s easier for consumers to remember one new thing than two new things, which is where a Branded House becomes a go-to. Not to mention you can have double the brand space on one shelf when you have two products in that category. And yet there is still a strong case for an endorsed brand model to give you the most flexibility for later stage growth into more markets. Essentially building for the future rather than today.
No matter what direction you do choose it still requires a solid strategy and brand foundation of naming, logos, colours, packaging design, shelf position and price to sway buyers and even make a case for loyalty to your brand over another. But when it comes to the architecture you choose, it’s just as important to think about it when you're starting out, as it is when you’ve created an established brand (or many). It all comes down to your current situation, who you’re up against, and what future goals you have that serve as a blueprint for what your brand will do to grow and succeed. To do that we need better branding and marketing in place to set that foundation and have the tools to give your brand (or brands) a shot at helping you create better business success.
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