It is an amazing place to be when you have had initial success with your first product but it can also be a pressurizing situation for emerging brands to answer the question ‘what’s your next product and when are you launching it?’, especially when operating in a demanding environment like retail. Adding new products can generate incremental revenue by building on your brand’s core offering growing your appeal and attracting more consumers. But with the costs associated with launching new products, the high rate of failure and the limited resources in your business, brands want to be sure the timing and conditions are right. When is the right time to expand your portfolio and how can you be confident you have got the timing right?
How to manage the scaling risk when it comes to new products
The scaling risk lies in expanding beyond a brands core product offering too early. Managing this risk is the first step to your portfolio expansion.
I appreciated this quote from the founder of Goli recently as it perfectly demonstrates how the timings and conditions were right for this brand to expand their range of supplements;
We knew we were on to something groundbreaking in wellness when we founded Goli in 2019,” says Goli Nutrition Co-founder, Michael Bitensky. “We could never have anticipated that our Goli Apple Cider Vinegar Gummies would become a daily part of millions of households in just two short years. That experience has given us the confidence to expand our product portfolio.”
In this scenario, it took the brand two years to be able to launch their next new product. This has worked for Goli and the key to their confidence was that they had achieved signs of momentum. They had penetrated the market to cover millions of households and their product was being consumer daily indicating they had successfully integrated into the consumption habits of their base, a sign that their proposition has longevity.
When I was working in a corporate ventures team searching for investible food & beverage brands I would look at three ingredients to understand if a brand was going to be able to scale and this same framework can be applied to how an emerging brand earns the right to expand their product portfolio and offer adjacency.
A truly scalable brand proposition has three factors: longevity, momentum, and breadth. Once you have indications that these three factors are in place, it’s time for your new product to launch on the market.
There is no shortage of brands or products popping up in the same category repeatedly. Tactics such as a good place on shelf, an effective consumer loyalty program, compelling branding, and social media presence keep these products on shelf but none of these matters if a product doesn’t actually fit with a deep and lasting consumer lifestyle or mindset. The product that solves a problem for consumers that can’t easily be solved with other solutions are the ones that will stick around. Small brands are often in a good initial position as they can authentically meet the needs of a consumer. They can target to a niche consumer base and develop a solution them. This problem needs to be pointed but big enough to enable breadth of their offering later on.
Bulletproof, founded by Dave Asprey in 2011, was created based on a consumer need to lose weight without being distracted by hunger or cravings that limit us from achieving our other goals. Their solution was butter coffee that offered weight loss and fast energy without the crash helping consumers to unleash their limitless potential. There are so many fascinating tactics that this brand took that align with consumer psychology it really needs a post of its own. There are principles of group think in their launch and how this amplified the appeal of the initial product offering by vilifying traditional diets. They launched a unique product, butter coffee, and successfully made this appealing by choosing a format that easily fitted into existing routines, the coffee occasion, that was already ingrained in daily life and the perfect occasion to offer weight loss and mental performance benefits. By sharing their recipe straight away, there was a sense of co-creating that let to a loyal following that galvanized their mission. These are some great examples of the appreciation of human mental limits when it comes to launching new products. But back to longevity, they had also tapped into a deep and lasting consumer need that sees them still on shelf today.
To launch a new product funds will be needed to buy ingredients, pay a co-packer, do microbiology testing, shipping, packaging, warehouse storage, slotting fees, marketing costs and so on. For a brand to be able to take this on the initial product needs to have momentum which means a good number of consumers must be convinced by your solution, be in love with it and are repeatedly buying it. Looking back at the example of Goli they had brand loyalty and repeat purchasing which secured them the revenue to build a solid base from which the brand could grow into new products. With longevity and momentum your brand will be in a good position to offer breath.
Breadth is the ability to move to new adjacent categories, channels, geographies or needs. Bulletproof taped into deep consumer motivations held by their bullseye target that could be trickled down to a wider base of consumers as they expanded their reach from foodservice to retail and through new product introductions. Their second product was Fat Water which layering on benefits and a new occasion to their core proposition. Together with the additional touchpoints they accessed and appealed to a broader audience expanding from the biohacker to the health enthusiast.
To determine the next opportunity requires the product team to be constantly evaluating the brands performance together with the food and beverage market, consumer health, categories, new product innovation, competitors, trending topics, consumer purchases and feedback and other factors that will impact the success of your brand, ultimately seeking out signals of change that can be used as an opportunity for brand growth.
What product should I launch?
I hope these three hallmarks of a truly scalable proposition help you understand when is a good time to start expanding your portfolio. At LaunchJuice we offer an agile service that helps emerging brands identify the role of innovation in their product portfolio, define the problem to be solved and ideate solutions. We like to start broad to capture everything and narrow down to the most compelling concept. The results are a range of fresh product concepts you and your stakeholders can compare, decide on and, build knowing that they reflect your brand and support on your strategy. Contact us if you would like more information.