The Scaling Dilemma
How to Avoid The Worst Mistakes Big Brands Make (Saving You From Losing Consumers Jumping on The New Kid on The Block)
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Dear Bottom-up Drinks Builder,
In this Mini-Guide, I am going to discuss an issue that affects most brands when scaling: losing relevance with their consumers, especially when newer, cooler brands enter the market while they are promoting to grow volume.
In our industry, there's a tendency to think that bottom-up brand building is only for small brands. I've been challenged that my approach works for small brands launched in the market, but it does not work when selling 1 million cases.
Well, that's wrong.
Although big brands have passed the famous Malcolm Gladwell's Tipping Point, no brand is safe after that.
If that were true, there wouldn't be a need for re-launch, re-branding, or re-positioning of big brands. No brand is too big to fail.
Unfortunately, most brands focus on short-term growth more than long-term brand building. They forget the fundamentals and must return to fix their brand when it's too big. Young trees are easier to fix than old ones. It’s better to grow sustainably instead of trying shortcuts that will send you back to the Start.
It takes 20 years to succeed overnight and one year to ruin everything.
How many brands have you seen succeeding and ruining all the hard work to grow too fast?
It reminds me of the story of the dog with a piece of bread in its mouth that goes to the lake and sees himself reflected. To catch the mirrored piece of bread, he drops it and loses it all.
So why do brands fail when scaling up, and how can you fix it?
1. They forget about the Bottom-up when selling to the Top-down Trade (Big On and Off Trade Chains)
People always look at Off-trade (i.e., Supermarkets/Retailers) for fast growth. You can do that, but not at the expense of your On-trade channel. If you forget about maintaining your relevance in the On-trade, your brand becomes a commodity.
Your brands start to get discounted, and consumers looking for premium products look for the next cool thing as your brand has become too affordable.
Think of what happened to Absolut when Grey Goose appeared. Also, remember what happened to the latter when Tito's Vodka launched. There's always a newcomer; if you don't keep your users hooked, they will switch brands. We all know it, so why do managers fail at this?
Very few managers understand how to work with On-trade. There are more Off-trade types of managers than on-trade ones.
That's simply because, in big corporations, only a few categories are sold in bars and restaurants, while all the others( from yogurt to toilet paper) are sold in supermarkets.
Mastering the Off-trade may give you more career opportunities, but if you work with drinks brands, you must master working with bars to ensure sustainable growth.
I wrote a Mini-Guide about the Bottom-up Trade:
2. Management gets a new toy and defocuses on the Core Brand.
In the era of M&As (Mergers and Acquisitions), it is widespread for companies to switch priorities.