Room for Growth
So far, we highlighted both the extraordinary market circumstances that influenced brand performance, as well as brands that fared well regardless. But with the tide shifting to a more favorable sentiment, it seems only right to uncover levers for brand growth. As shoppers feel some relaxation, they are again reshaping their behavior, willing to spend more and refocus on quality – a momentum for brand growth. However, many shoppers are still embracing PL and therefore brands need to invest in adding value to justify higher (perceived) prices. Brands now have the opportunity to demonstrate a true functional and emotional advantage, changing the narrative from money saved to money well spent.
Then what are the ingredients for CRP growth?
A closer look at the growth drivers – as the ranking of the most chosen brands is based on a combination of consumer choices and household penetration – shows, that 85% of growing brands expand on improved penetration, of which 54% in combination with more consumer choices.
As penetration drives growth, it is important to have a benchmark for success, so brands can define realistic growth targets. Globally, growing brands are gaining on average 1.5 penetration points – an 1% increase in penetration requires
an expansion of the shoppers’ base by 12 million households. As the global population is growing every year, a brand needs to add an extra 232,000 households for every 1% penetration point to stay at the same level of global penetration as in the previous year. In Europe, the benchmark for success is slightly higher at 1.6 penetration points – for big brands as much as 2.2%.
The list of brands with the highest increase in penetration points across the whole of Europe is dominated by regional, i. e. European brands – with one exception: Canadian McCain. All brands in the top ten added at least 1 million buyers. Dr. Beckmann (rank 244) is leading the list with an increase of penetration by 1.4 points (+13.3%), a very enviable increase of 3.1 million shoppers. Ukrainian Roshen jumped 101 ranks to 211, increasing its CRP by 30.5% and adding 1.0 penetration points. Only three of these 10 brands – Dr. Beckmann (+5.3%), Roshen (+8.5%) and Red Bull (+8.5%) also saw a noticeable increase in consumer choice (growth vs. 2022 in brackets).
Yet, as this year's overall ranking proves, growing penetration is easier said than done. Successful brands typically devise a coherent strategy across key growth levers:
✔ Availability is funda-mental, both geographically and across retail channels, to increase the number of opportunities in which a shopper can choose a brand.
✔ Intro-ducing new formats, variants and covering a broader range of occasions will help a brand to be relevant in as many moments of consumption as possible and reach new target groups.
✔ Brand stretching across different categories or sub-categories can attract buyers with different needs and expectations.
✔ Incre-mental innovation addresses the needs or new needs of shoppers. This can extend to establishing a new category. Brands that identify new needs and innovate to meet them can benefit from a first-to-market advantage.
✔ No matter the size, brand advertising is crucial to constantly prime and replenish your buyer base.
Dr. Beckmann, renowned for its cleaning products across Europe and the Globe, including favorites like "Dr. Beckmann Stain Devils," emphasizes sustainability and quality for consistent performance. With decades of research underpinning its foundation, Dr. Beckmann ensures reliable product effectiveness. Guided by the motto "Innovation is our single best
opportunity," the family business is dedicated to developing high-quality, innovative products that meet consumers needs. In 2022, Dr. Beckmann expanded into a new category with the launch of Magic Leaves detergent sheets and introduced a category extension earlier this year with Magic Leaves for lavatories and as an all-purpose cleaner.
Source: CPS GfK | Brand Footprint 2024 European FMCG Ranking; YouGov BrandIndex; dr-Beckmann.de
As penetration is the ultimate growth driver, recruiting and keeping shoppers must be the ongoing mission for a brand. To define an effective strategy for penetration growth, it is important to thoroughlyunderstand shopper needs and desires.”
So, what motivates existing buyers to stay and which drivers attract new shoppers? A closer look at the category of carbonated soft drinks (CSD) in Germany showcases the importance of identifying the right drivers to boost the recruitment and retention of shoppers for your particular brand.
The CSD category itself expanded its CRP by +4% in Germany, driven by both more buyers and a higher frequency of choice. A closer look, based on our Penetration Growth Driver analysis, reveals specific drivers that have a stropositive impact on both category recruitment and retention: choice, impulse, price, online, promotions and especially innovation. Secondary drivers are out of home, taste, convenience and advertisement. Drivers like health, organic and ecology have a negative contribution toward retention and recruitment.
As a brand, it pays off to first understand the key levers for growth for category buyers – after all, they are the most obvious target. But as each brand has a different positioning and a different level of salience, individual brand drivers vary.
In the case of the German CSD category we examined two well-known brands.
The winning brand was able to retain 80% of its buyer base from one year to the next. The losing brand only held on to less than half. More importantly, the brand was only able to newly recruit 5% of the headroom – a clear signal to prioritize penetration growth.
Further analysis reveals both brands share the same key penetration growth drivers, targeting the same audience, however, reveals the winning brand as well outperforms on nearly all of these key drivers. “Choice” is a crucial differentiator between both brands. The losing brand fails to recruit buyers looking for variety of choice via pack size, availability and broad assortment; a lever in much need of attention. Impulse does help the brand to recruit, so this should be amplified further via e.g. secondary placements and in store activation.
Further analysis reveals both brands share the same key penetration growth drivers, targeting the same audience, however, the winning brand as well outperforms in nearly all of these key drivers. “Choice” is a crucial differentiator between both brands. The losing brand fails to recruit buyers looking for variety of choice in terms of pack size, availability and broad assortment; a lever that obviously requires a lot of attention. Impulse does help the brand to recruit, so this should be amplified further, e.g. secondary placements and in store activation.
