The rapid growth of insurgent brands is proving disruptive in fast-moving consumer goods categories. Brian McRoskey, a partner with Bain’s Consumer Products practice, discusses how big brands can fight back and reclaim their insurgent mindset.
Read the transcript below.
BRIAN MCROSKEY: Rapidly growing brands like Halo Top, Noosa and Harry's have been a thorn in the side of big consumer products companies. These insurgent brands have grown at more than 10 times their category growth rates over the last five years, and while accounting for only 2% of market share have taken more than 25% of the growth.
We analyzed more than 90 categories, and the results are clear: No category is immune to disruption. These insurgent brands have benefited from lower barriers to entry. They have digital technology, changing consumer needs and access to an ecosystem of partners.
And insurgent brands have truly delivered for the consumer, providing compelling offerings that meet unmet needs while often providing ever more premium options within a category. And they've exploited the intrinsic advantages of being small: nimble and agile decision making, ability to grow incrementally through increased distribution, and a willingness to go after opportunities that are initially small.
But big brands can fight back. And to do this, they need to do three things.
First is rediscovering scale advantage and outinvesting in the places where scale actually matters. Second is becoming the acquirer of choice for insurgents. And this means a model where you sustain the growth of the brand, avoid destroying what made them successful to begin with and retain the authenticity of that brand. Finally, big consumer products companies can reclaim their own insurgent mindset. This means launching micro-battles where they can test, learn and win.