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Copyright © 2010 The Nielsen Company. All rights reserved.

Nielsen Featured InsightsDelivering consumer clarity March 2010

www.nielsen.com

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

SUMMARY: Why is it that the most popular breakast cereal brands o 1949 are stillamongst the best selling brands today, when in contrast, all the top shampoo brands o thatera have long ago disappeared? What are the actors that ensure some brands survive as adominant orce while others, that appear unassailable in one decade, quickly become the topico nostalgia in the next? A close look at the Nielsen archives brings new insight to the oldquestion – what makes big brands stay big?

In the consumer packaged goods world we tend to think o the short term trend as being this week’s data anda long term trend might look at two or three years, or i you are really resourceul, maybe as much as ve oreven ten years o history – all the way back to the year 2000! In this study Nielsen has delved deeper intothe archives than ever beore, going back two generations to 1949 (with a brie pit stop in 1979) to take anew perspective on brand longevity.

1949 is the right place to start, partly because it is the oldest inormation that can be ound in the Nielsenarchives and partly because it marks the start o the race. The war was over, rationing was easing up andconsumer brands were poised on the edge o the great marketing boom o the 1950s with the advent o supermarkets and TV advertising and all that they brought. The question o brand survival can be nicelyramed by contrasting the evolution o the Breakast Cereal category with the evolution o the Shampoo

category over that 60 year period (1949-2009).

The big three cereal brands at the close o the 1940s, Kellogg’s Cornfakes, Shredded Wheat and Weetabixwere still amongst the top 3 brands a generation later (in 1979). A generation ater that (in 2009), despiteall the changes we have seen in consumer behaviour, all three brands were still amongst the top ten mostpopular cereal brands in the country. In the 30 years between 1949 and 1979 Weetabix’s market share movedrom 17.7% to 17.8%!

longevity




In Shampoo the big brands in 1949 included Evan Williams, Icilma and Drene. Together they accounted orover a third o all sales and yet all three had completely disappeared by 1979 as had all the other brandsin the category. Furthermore, most o the brands that replaced them, the contemporaries o Sunsilk and

Silvikrin, had themselves been displaced by 2009. Why should that be? Why should one category remainalmost totally unchanged while another should transorm beyond recognition?

Drene 11.2% Icilma 6.0% Evan William 18.4%Drene 11.2% Icilma 6.0% Evan William 18.4%

Sunsilk 8.3% (1979)

Silvikrin 10.8% (1979)

Sunsilk 8.3% (1979)

Silvikrin 10.8% (1979)

All the big shampoo

brands of the 1940’s had

disappeared a generation

later....... And most of

the brands that replaced

them had all but

disappeared a generation

after that.

22.7

7.5

17.8

1979

40.5

13.3

17.7

Kelloggs Cornflakes Shredded Wheat Weetabix

£ Brand Share 1949

no. 1

no. 2

no. 3

5.3

4.1

9.8

2009

no. 1

no. 2

no. 3

no. 1

no. 7

no. 4

22.7

7.5

17.8

1979

40.5

13.3

17.7

Kelloggs Cornflakes Shredded Wheat Weetabix

£ Brand Share 1949

no. 1

no. 2

no. 3

5.3

4.1

9.8

2009

5.3

4.1

9.8

2009

no. 1

no. 2

no. 3

no. 1

no. 7

no. 4

The big post-warbreakfast cereal

brands are still

household names

today




In total, Nielsen looked at 11 categories and examined the ortunes o the top three brands in 1949 rom eachcategory – 33 apparently unassailable national market leaders. By 2009 less than a quarter o those brandswere still in the top three in their category and only two brands had maintained a consistent no.1 positionacross the timerame (the two great survivors, i you are interested, are Ryvita Crispbread and HP sauce).This article argues that there are ve actors that infuence the long term success o 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 EngagementThe age at which the consumer engages with the brand is critical to the brand’s longevity. For the consumerto truly engage with the brand as a child the brand needs to be very visible, both in the house and on TV, andit needs to involve an element o personal choice or the child, however small. Chocolate and sweets are theobvious examples but also consider the choice o a ootball team an illustration o loyalty. Typically the childwill choose a ootball team around the age o 7 and will stay with that team or the rest o their lie regardlesso price, convenience or perormance. At this age the parents are a very strong infuence but ultimately it isthe personal choice o the child which team they support.

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

Other brands do develop an emotional engagement but at a later age – when the consumer is a youngadult. Shampoo, shaving brands, beer and cigarettes are all later choices and by this time the infuences aredierent. It is no longer a continuation o parental choice; it is almost the opposite eect – a desire to bedierent.

The age at which aconsumer engages

with a brand is critical

to longevity.




In the 1950s the young men about town might have shaved with a Colgate product beore enjoying aWatney’s Brown Ale and smoking a Woodbine; their children in turn would splash on some Old Spice, drinka can of Skol lager while smoking a JPS cigarette. Now a generation on, if they smoke at all it could beLambert & Butler, they will shave with a Gillette product and drink a bottle o Stella. Or will they? As onegeneration moves to another and we start to see a generation that might preer to drink a Peroni and use aNivea or Men product beore they hit the town. The younger the age o emotional engagement the greaterthe parental infuence 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 itscontemporaries have mostly allen away.

Shampoo, shaving brands,beer and cigarettes areall later choices and bythis time it is no longer acontinuation o parentalchoice. There is a desireto be dierent.

1950s1950s

1970s1970s

2000s2000s

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




Creative DestructionBut emotional engagement is not the only actor – that would be too easy. Emotional engagement doesnot 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 o those brands would disappearwithout a trace and the third would continue to dominate the category or rest o the century? That changeis explained by “creative destruction”. The economist Joseph Schumpeter coined the phrase “creativedestructive” (Capitalism, Socialism and Democracy, 1942) to describe the radical transformation thataccompanies innovation, and we see that same phenomenon in the CPG industry time and time again. InLaundry Detergents the market moved to automatic machines and it also moved away rom soap fakes

to synthetic materials – synthetic detergents were both cheaper and more eective and Tide, Ariel and,eventually, Persil, swept the soap fake 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 movebased on a leap in technology or a genuine innovation and the dominant brands simply can not react. It isone thing seeing the change but quite another to be able to move the business quickly and radically enoughto benet. In ruit juice Tropicana displaced Del Monte with a resh chilled juice; your shower gel will morelikely be Radox or Lynx rather than Liebuoy; and your liquid soap will be Carex not Lux. It was P&G that ledthe move to synthetic detergents (with Tide in US) and they did the same with toothpaste.

Laundry detergents market share over time

1949

31.3%

31.1%

29.9%

1979

17.7%

14.7%

7.9%

2009

19.2%

13.0%

12.2%

Something

happened?

When radicaltransormationaccompanies innovationbrands can set themselves

apart rom theircompetitors and securelong term brand success.

P&G commercialized the use o fuoride in toothpaste, an ingredient that was proven to ght decay. Crestwas launched in the US in 1956 and when it eventually got ADA approval in 1960 it rose to 30% marketshare over night. The toothpaste market split between cosmetic claims (whitening) and therapeutic claims(ght decay with uoride). Brands like Pepsodent that promised a “brighter taste means clean whiter teeth”began to decline. It was not until the launch o the Aquaresh stripes (resh breath, healthy gums, strongteeth) 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 romnow, alternative solutions are already coming to market, but will it be Persil, Ariel and Bold that prot romthe transormation or a set o new players? History would suggest the latter. In act, it is quite hard to ndexamples o brands that do survive the impact o creative destruction - a round o applause or Anchor orhaving led the charge into spreadable butter rom an existing position o dominance.




Strong Brand ManagementThe impact o emotional engagement and creative destruction might suggest that the role o the brandmarketer is simply that o an interested observer, watching the events unold – but that is not true. A brandmust 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 rom a medicinaltonic to an energy drink and the shit rom Dairylea triangles to Dairylea Lunchables are just two exampleso where a brand may not have survived in the long-term without the marketer’s understanding o therelevant macro consumer trends and some skilled brand management. The macro trends o value or 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 o these dimensions.

Premium PriceThe study also looked at the price position o the 33 brands to see i this presented a key dierentiationbetween success and ailure. While more in depth work is needed on this topic there are examples o arelationship between price premium and longevity – where price premium is dened by a brand having ahigher value than volume market share. Heinz Baby Food and Ryvita are both good examples o premiumsurviving brands whereas, in the same categories Libby’s Baby Food and MacVita Crispbread are both

examples o brands that had a lower value share than volume share in 1949 and have now disappeared. Itwas also clear that brands nd it increasingly dicult to maintain a premium position over the long-term. In2009 it is new brands like Organix and Ella’s Kitchen that have the premium positioning - will this help themsurvive in the long term?.

Lucozade developed their energy message with the timesA brand muststay relevantand adapt or itwill diminish.

Winners Losers

0

10

20

30

40

50

60

Heinz Baby Ryvita Jeyes Libby Baby MacVita Ibcol

Value Share Volume Share

1949 - £value share v volume shareThere are examples o price premiums andbrand longevity thatstretch back threegenerations.




Emerging ChannelsFinally, it would have been ascinating to prove that the brands that dominated the emerging channels in1949 were the brands that went on to win in the long-term. In 1949 the market was split between Multiplesand the Independent trade and it was split between Grocers and Chemists. There is not enough data availableon trade channels in 1949 to make an empirical conclusion but the inormation available is indicative and o strategic importance. Heinz Baby Food had a ar higher share in Multiples than Chemists or Independentsbut or Brands Baby Food, the now orgotten competitor, the opposite was true; Colgate was always strongin Multiples and Kolynos toothpaste was stronger in Chemists; even with toothbrushes the ever presentWisdom brushes had a stronger position in Multiples and the now absent Spa brushes did better business

in the declining channels. The signicance o this conclusion, o course, is huge. I true, then it will be thebrands that market themselves well through the on-line retailers that will be dominant in the uture.

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

0 50 100 150 200 250

Heinz Baby

Colgate Toothpaste

Wisdom Toothbrush

Brands Baby

Kolynos Toothpaste

Spa Toothbrush

0 50 100 150 200 250

Heinz Baby

Colgate Toothpaste

Wisdom Toothbrush

Brands Baby

Kolynos Toothpaste

Spa Toothbrush

Share in grocery multiples indexed on share in

chemists or independents in 1949

Brands that have a

strong presence inemerging channels

have a greater

chance of longevity

So what does make a big brand stay big?The reality is that big brands, on the whole, do not stay big. I your brand has an emotional engagementwith children, i you manage the brand to meet the macro consumer trends, i you continually support thebrand to maintain a premium, and i you ocus your resources on the emerging retailers then you might be along term success. That is i you can also persuade your business to move all its investment behind the newinnovative technology at just the right moment. Spare a thought or Rinso and Oxydol; Erasmus ShavingStick; or MacVita Crispbread and Brands Baby Food; or Ibcol and Owbridges; or Evan Williams, Drene,Icilma and Amami because history only remembers the winners.

Big Brands stay big because:People buy what they knowThey stand for something real

They are consistent over time 1876 1881 1886 1904

1908 1918 1920-33 1934

1939 1962 1969 1996

1876 1881 1886 1904

1908 1918 1920-33 1934

1939 1962 1969 1996




2010 - 100 Biggest Grocery Brands

The annual Britain’s 100 Biggest Brands report which ranks the 100 best selling grocery brands in GreatBritain, compiled by The Nielsen Company and published in trade magazine, The Grocer, sees anothersuccessul year or the nation’s most popular grocery brands.

The year was a tough year or the consumer and value or money became more important than ever beore.What is apparent though is that shoppers have continued to buy trusted brands. The sales value o the top100 brands accounted or £16.7 billion (12.9%) o the total £130 billion grocery market, an increase o 4.5%YoY. The growth was ahead o total market growths which were 3.8% or the year.

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

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

The oldest surviving brand in the top 100 league is Twinings. Twinings entered the Top 100 or the rsttime this year, over 300 years ater the company rst produced tea. In 1706, Twinings was one o the rstcompanies to introduce tea drinking to the British when Thomas Twining began selling tea rom his rstpremises on the Strand in London**. 304 years later the brand grew sales 11% and was one o the ve newentries to the top 100.

The report also sees some comparatively adolescent brands continue to climb the rankings. Danone Activiawas launched only 11 years ago and now sits in 18th position with sales o over £220million and growth inexcess o 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 orming a brand hasproved a successul strategy which others have ollowed. Cravendaleremains one o the most successul and the milk brand grew sales

16% in 2009, alling within the top 40 at

number 39.

The report sees some really exceptionalperormances rom brands who’s storiesbegan up to three centuries ago but whocontinued to prevail in the last year.Nielsen has seen consumers becomemuch more cautious and many haveundertaken strategies to save money onthe weekly shop but Britain’s 100 BiggestGrocery Brands report highlights thatquality, trusted brands can survive andindeed fourish in tough times and through

the times.

All data source: Nielsen Scantrack, MAT to20/12/09 * Coke is the rst brand ever to passthe £1billion mark in the Nielsen/The Grocer100 Biggest Grocery Brands report (ormerly theNielsen/Checkout Top 100 Grocery Brands). Inthis report, a brand is dened as any products soldunder a brand name within a given category. Thereport covers grocery brands only and does notinclude Alcohol, cigarettes, otc medicines andpersonal care goods. **Source: twinings.co.uk

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