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Nielsen Featured Insights

March 2010
Delivering consumer clarity www.nielsen.com

longevity
What Makes Big Brands Stay Big?
By: Craig Twyford, VP Product Leadership, The Nielsen Company

SUMMARY: Why is it that the most popular breakfast cereal brands of 1949 are still
amongst the best selling brands today, when in contrast, all the top shampoo brands of that
era have long ago disappeared? What are the factors that ensure some brands survive as a
dominant force while others, that appear unassailable in one decade, quickly become the topic
of nostalgia in the next? A close look at the Nielsen archives brings new insight to the old
question – what makes big brands stay big?

In the consumer packaged goods world we tend to think of the short term trend as being this week’s data and
a long term trend might look at two or three years, or if you are really resourceful, maybe as much as five or
even ten years of history – all the way back to the year 2000! In this study Nielsen has delved deeper into
the archives than ever before, going back two generations to 1949 (with a brief pit stop in 1979) to take a
new perspective on brand longevity.

1949 is the right place to start, partly because it is the oldest information that can be found in the Nielsen
archives and partly because it marks the start of the race. The war was over, rationing was easing up and
consumer brands were poised on the edge of the great marketing boom of the 1950s with the advent of
supermarkets and TV advertising and all that they brought. The question of brand survival can be nicely
framed by contrasting the evolution of the Breakfast Cereal category with the evolution of the Shampoo
category over that 60 year period (1949-2009).

The big three cereal brands at the close of the 1940s, Kellogg’s Cornflakes, Shredded Wheat and Weetabix
were still amongst the top 3 brands a generation later (in 1979). A generation after that (in 2009), despite
all the changes we have seen in consumer behaviour, all three brands were still amongst the top ten most
popular cereal brands in the country. In the 30 years between 1949 and 1979 Weetabix’s market share moved
from 17.7% to 17.8%!

Copyright © 2010 The Nielsen Company. All rights reserved.


The big post-war 1979
£ Brand Share 1949
breakfast cereal
brands are still no. 2 17.8 no. 2
17.7
household names 7.5 no. 3
no. 3
today 13.3
22.7 no. 1
no. 1 40.5

2009
Kelloggs Cornflakes Shredded Wheat Weetabix

9.8 no. 1

4.1 no. 7

5.3 no. 4

In Shampoo the big brands in 1949 included Evan Williams, Icilma and Drene. Together they accounted for
over a third of all sales and yet all three had completely disappeared by 1979 as had all the other brands
in the category. Furthermore, most of the brands that replaced them, the contemporaries of Sunsilk and
Silvikrin, had themselves been displaced by 2009. Why should that be? Why should one category remain
almost totally unchanged while another should transform beyond recognition?

Drene 11.2% Icilma 6.0% Evan William 18.4%

All the big shampoo


brands of the 1940’s had
disappeared a generation
later....... And most of
the brands that replaced
Sunsilk 8.3% (1979)
them had all but
disappeared a generation
Silvikrin 10.8% (1979)
after that.

Copyright © 2010 The Nielsen Company. All rights reserved.


In total, Nielsen looked at 11 categories and examined the fortunes of the top three brands in 1949 from each
category – 33 apparently unassailable national market leaders. By 2009 less than a quarter of those brands
were still in the top three in their category and only two brands had maintained a consistent no.1 position
across the timeframe (the two great survivors, if you are interested, are Ryvita Crispbread and HP sauce).
This article argues that there are five factors that influence the long term success of a brand:

•The age at which the emotional engagement occurs


•The impact of “creative destruction”
•Strong brand management
•Justifying a premium positioning
•Domination of the emerging channels

Emotional Engagement
The age at which the consumer engages with the brand is critical to the brand’s longevity. For the consumer
to truly engage with the brand as a child the brand needs to be very visible, both in the house and on TV, and
it needs to involve an element of personal choice for the child, however small. Chocolate and sweets are the
obvious examples but also consider the choice of a football team an illustration of loyalty. Typically the child
will choose a football team around the age of 7 and will stay with that team for the rest of their life regardless
of price, convenience or performance. At this age the parents are a very strong influence but ultimately it is
the personal choice of the child which team they support.

Nobody knows the brand of macaroni that was used to make their supper but with breakfast cereal there is
often a choice of two or three, laid out on the table by the parent, but chosen by the child; the brown sauce
or the tomato sauce bottles are visible on the table and the child consumer makes a conscious decision
whether to engage or not. The child consumer is usually allowed to either love or hate Marmite, another
survivor.

Other brands do develop an emotional engagement but at a later age – when the consumer is a young
adult. Shampoo, shaving brands, beer and cigarettes are all later choices and by this time the influences are
different. It is no longer a continuation of parental choice; it is almost the opposite effect – a desire to be
different.

The age at which a


consumer engages
with a brand is critical
to longevity.

Copyright © 2010 The Nielsen Company. All rights reserved.


In the 1950s the young men about town might have shaved with a Colgate product before enjoying a
Watney’s Brown Ale and smoking a Woodbine; their children in turn would splash on some Old Spice, drink
a can of Skol lager while smoking a JPS cigarette. Now a generation on, if they smoke at all it could be
Lambert & Butler, they will shave with a Gillette product and drink a bottle of Stella. Or will they? As one
generation moves to another and we start to see a generation that might prefer to drink a Peroni and use a
Nivea for Men product before they hit the town. The younger the age of emotional engagement the greater
the parental influence and so the greater likelihood that the brand will be passed through the generations.
It can be no coincidence that Matey, the childrens’ bubble bath, is a perennial bath product while its
contemporaries have mostly fallen away.

The ‘man about town’ generation gap - Post War to the naughties

Shampoo, shaving brands,


beer and cigarettes are
1950s all later choices and by
this time it is no longer a
continuation of parental
choice. There is a desire
to be different.

1970s

2000s

Copyright © 2010 The Nielsen Company. All rights reserved.


Creative Destruction
But emotional engagement is not the only factor – that would be too easy. Emotional engagement does
not explain why in 1949 three laundry brands shared the detergent market between them – Rinso (31.3%),
Oxydol (31.1%) and Persil (29.9%). Who could have predicted that two of those brands would disappear
without a trace and the third would continue to dominate the category for rest of the century? That change
is explained by “creative destruction”. The economist Joseph Schumpeter coined the phrase “creative
destructive” (Capitalism, Socialism and Democracy, 1942) to describe the radical transformation that
accompanies innovation, and we see that same phenomenon in the CPG industry time and time again. In
Laundry Detergents the market moved to automatic machines and it also moved away from soap flakes
to synthetic materials – synthetic detergents were both cheaper and more effective and Tide, Ariel and,
eventually, Persil, swept the soap flake brands aside with a superior consumer proposition.

In the last 60 years we have seen the same thing happen countless times. The market makes a tectonic move
based on a leap in technology or a genuine innovation and the dominant brands simply can not react. It is
one thing seeing the change but quite another to be able to move the business quickly and radically enough
to benefit. In fruit juice Tropicana displaced Del Monte with a fresh chilled juice; your shower gel will more
likely be Radox or Lynx rather than Lifebuoy; and your liquid soap will be Carex not Lux. It was P&G that led
the move to synthetic detergents (with Tide in US) and they did the same with toothpaste.

Laundry detergents market share over time

7.9% 12.2%
31.3%

31.1% 14.7% 13.0%

When radical
transformation
29.9%
accompanies innovation
17.7%
19.2%
brands can set themselves
apart from their
1949 Something 1979 2009 competitors and secure
happened? long term brand success.
P&G commercialized the use of fluoride in toothpaste, an ingredient that was proven to fight decay. Crest
was launched in the US in 1956 and when it eventually got ADA approval in 1960 it rose to 30% market
share over night. The toothpaste market split between cosmetic claims (whitening) and therapeutic claims
(fight decay with fluoride). Brands like Pepsodent that promised a “brighter taste means clean whiter teeth”
began to decline. It was not until the launch of the Aquafresh stripes (fresh breath, healthy gums, strong
teeth) that the market began to re-converge.

Creative destruction has happened to one degree or another in almost every category and will continue to
happen. It is hard to imagine that we will continue to wash our clothes in water and detergents 30 years from
now, alternative solutions are already coming to market, but will it be Persil, Ariel and Bold that profit from
the transformation or a set of new players? History would suggest the latter. In fact, it is quite hard to find
examples of brands that do survive the impact of creative destruction - a round of applause for Anchor for
having led the charge into spreadable butter from an existing position of dominance.

Copyright © 2010 The Nielsen Company. All rights reserved.


Strong Brand Management
The impact of emotional engagement and creative destruction might suggest that the role of the brand
marketer is simply that of an interested observer, watching the events unfold – but that is not true. A brand
must stay relevant and adapt to the macro consumer trends or it will diminish and die through neglect.
There are many celebrated brand revival marketing case studies. Lucozade’s transition from a medicinal
tonic to an energy drink and the shift from Dairylea triangles to Dairylea Lunchables are just two examples
of where a brand may not have survived in the long-term without the marketer’s understanding of the
relevant macro consumer trends and some skilled brand management. The macro trends of value for money,
convenience, choice and health have dominated consumer behaviour since the war. The bar is raised with
each generation and it is critical that a brand stays relevant on at least one of these dimensions.

A brand must
Lucozade developed their energy message with the times
stay relevant
and adapt or it
will diminish.

Premium Price
The study also looked at the price position of the 33 brands to see if this presented a key differentiation
between success and failure. While more in depth work is needed on this topic there are examples of a
relationship between price premium and longevity – where price premium is defined by a brand having a
higher value than volume market share. Heinz Baby Food and Ryvita are both good examples of premium
surviving brands whereas, in the same categories Libby’s Baby Food and MacVita Crispbread are both
examples of brands that had a lower value share than volume share in 1949 and have now disappeared. It
was also clear that brands find it increasingly difficult to maintain a premium position over the long-term. In
2009 it is new brands like Organix and Ella’s Kitchen that have the premium positioning - will this help them
survive in the long term?.

There are examples of


1949 - £value share v volume share
price premiums and
brand longevity that Winners Losers
60
stretch back three
50
generations.
40

30

20

10

0
Heinz Baby Ryvita Jeyes Libby Baby MacVita Ibcol

Value Share Volume Share

Copyright © 2010 The Nielsen Company. All rights reserved.


Emerging Channels
Finally, it would have been fascinating to prove that the brands that dominated the emerging channels in
1949 were the brands that went on to win in the long-term. In 1949 the market was split between Multiples
and the Independent trade and it was split between Grocers and Chemists. There is not enough data available
on trade channels in 1949 to make an empirical conclusion but the information available is indicative and of
strategic importance. Heinz Baby Food had a far higher share in Multiples than Chemists or Independents
but for Brands Baby Food, the now forgotten competitor, the opposite was true; Colgate was always strong
in Multiples and Kolynos toothpaste was stronger in Chemists; even with toothbrushes the ever present
Wisdom brushes had a stronger position in Multiples and the now absent Spa brushes did better business
in the declining channels. The significance of this conclusion, of course, is huge. If true, then it will be the
brands that market themselves well through the on-line retailers that will be dominant in the future.

When businesses look to the developing opportunities in India and China, knowing now which retailers will
lead the consolidation and later dominate the modern trade should influence how and where they go to
market. Spending time working out which channels and which retailers will emerge as the leading force and
focusing resources there is likely to pay dividends in the long term.

Brands that have a Share in grocery multiples indexed on share in


strong presence in chemists or independents in 1949

emerging channels Spa Toothbrush


have a greater
chance of longevity Kolynos Toothpaste

Brands Baby

Wisdom Toothbrush

Colgate Toothpaste

Heinz Baby

0 50 100 150 200 250

So what does make a big brand stay big?


The reality is that big brands, on the whole, do not stay big. If your brand has an emotional engagement
with children, if you manage the brand to meet the macro consumer trends, if you continually support the
brand to maintain a premium, and if you focus your resources on the emerging retailers then you might be a
long term success. That is if you can also persuade your business to move all its investment behind the new
innovative technology at just the right moment. Spare a thought for Rinso and Oxydol; Erasmus Shaving
Stick; for MacVita Crispbread and Brands Baby Food; for Ibcol and Owbridges; for Evan Williams, Drene,
Icilma and Amami because history only remembers the winners.

Big Brands stay big because:


People buy what they know
They stand for something real 1876 1881 1886 1904
They are consistent over time

1908 1918 1920-33 1934

1939 1962 1969 1996

Copyright © 2010 The Nielsen Company. All rights reserved.


2010 - 100 Biggest Grocery Brands
The annual Britain’s 100 Biggest Brands report which ranks the 100 best selling grocery brands in Great
Britain, compiled by The Nielsen Company and published in trade magazine, The Grocer, sees another
successful year for the nation’s most popular grocery brands.

The year was a tough year for the consumer and value for money became more important than ever before.
What is apparent though is that shoppers have continued to buy trusted brands. The sales value of the top
100 brands accounted for £16.7 billion (12.9%) of the total £130 billion grocery market, an increase of 4.5%
YoY. The growth was ahead of total market growths which were 3.8% for the year.

Topping the table again this year is Coca Cola which has now become the first ever grocery brand* to pass
the £1 billion mark. The iconic brand was launched 110 years ago and continues to perform. With sales of
£1.011 billion, Coke grew sales by 4.9% in 2009 to retain the top spot.

Other classic brands that have stood the test of time and feature in the top 10 of the league include bread
brands Warburtons and Hovis. Warburtons is 134 years old and the Bolton based brand remains strong
at number 2 with £706 million sales in 2009. Hovis, a bread who’s branding hangs heavily on its heritage
enjoyed a very successful year with sales growing over 13%, sits in 4th place. Cadbury’s Dairy Milk, another
brand which has survived over a century, ranks at number 5 and Britvic’s Robinsons drink which has a history
that can be traced back to 1823 retained its 10th place position with sales of £307 million.

The oldest surviving brand in the top 100 league is Twinings. Twinings entered the Top 100 for the first
time this year, over 300 years after the company first produced tea. In 1706, Twinings was one of the first
companies to introduce tea drinking to the British when Thomas Twining began selling tea from his first
premises on the Strand in London**. 304 years later the brand grew sales 11% and was one of the five new
entries to the top 100.

The report also sees some comparatively adolescent brands continue to climb the rankings. Danone Activia
was launched only 11 years ago and now sits in 18th position with sales of over £220million and growth in
excess of 25% YoY. Cravendale, the country’s largest branded milk came onto the market just over a decade
ago. Taking what was a commodity product and forming a brand has
proved a successful strategy which others have followed. Cravendale
remains one of the most successful and the milk brand grew sales
16% in 2009, falling within the top 40 at
number 39.

The report sees some really exceptional


performances from brands who’s stories
began up to three centuries ago but who
continued to prevail in the last year.
Nielsen has seen consumers become
much more cautious and many have
undertaken strategies to save money on
the weekly shop but Britain’s 100 Biggest
Grocery Brands report highlights that
quality, trusted brands can survive and
indeed flourish in tough times and through
the times.

All data source: Nielsen Scantrack, MAT to


20/12/09 * Coke is the first brand ever to pass
the £1billion mark in the Nielsen/The Grocer
100 Biggest Grocery Brands report (formerly the
Nielsen/Checkout Top 100 Grocery Brands). In
this report, a brand is defined as any products sold
under a brand name within a given category. The
report covers grocery brands only and does not
include Alcohol, cigarettes, otc medicines and
Copyright © 2010 The Nielsen Company. All rights reserved. personal care goods. **Source: twinings.co.uk

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