3 Ways to Grow your Challenger Brand Beyond £5m

Reaching the first £1m in annual retail sales is the hardest milestone for any consumer goods challenger brand. You’ve likely bootstrapped and worked hard to get there, money for building your brand has been tight and it’s been a challenge to get a foot in the door with the biggest retailers. 

The next stage of growth brings with it a whole new set of challenges, including how you broaden out distribution, maintain and grow your rate of sale and continue to build your brand in the most cost-effective way possible. However, it’s not all doom and gloom! If you haven’t given it a read already, check out our ‘Are Challenger Brands Winning in the UK Market?’ report for more in-depth insights to help you profitably grow your business and seize the opportunities available to you at each stage of your brand journey. 

As a follow-up to this, we’ve been in conversation with Nigel White, CEO at The Marketing Place, to take a deep-dive into the characteristics of brands that have successfully moved beyond the £5m annualised sales tier. Check out our top 3 recommendations below.

Top Tip 1: Get Your Category Argument Clear 

What incremental business will you bring to the overall category? 
Are you bringing in a new group of consumers? 
Or are you opening up a new meal occasion, or offering a new bundle of benefits to the category?

In order to secure multi-site listings within grocery retailers, you need to combine your brand story and gut instinct with tangible category data. This will enable you to paint a rounded picture that resonates with Buyers.

By understanding what’s happening in the market, how you’re performing against your competition and what challenges and opportunities Buyers are faced with, you can position your brand in the best light possible. This enables you to uncover new growth potential for yourself and the category as a whole - which is ultimately what the buying teams are looking for. 

We know this may sound really basic, however it’s integral to take stock and question whether you’re really clear on this for your brand and (more importantly!) whether you’re putting this into action?

Top Tip 2: Solidify Your Brand Strategy 

Get your brand strategy nailed. 

Don’t just create a list of functional benefits versus your competitors. Focus on the emotional reasons why people will pick up your brand and bond with it over time. Ensure the values and personality of the brand shine through, the backstory and provenance is clear, and the proposition is tight. 

Above all, when deciding upon your brand strategy and what to communicate, remember the mantra - be fascinating!

As part of your brand strategy, we’d also highly recommend spending time focusing on your sustainability strategy. This is your secret weapon against the bigger players. It’s an area where you can be more agile, and where many larger brands can be too slow to respond in a meaningful way. Look closely at all of the elements that should make up your sustainability strategy and build them into your overarching brand plans. 

A great testament to this is the growth we’re seeing within the Household category for brands under the £1m sales mark. For the majority of categories, sales growth remains significantly behind that of the total market. However, when we place a spotlight on the Household category, we can see it's having unparalleled sales growth, with sub-£1m challenger brands growing at 3.1% versus the total market at 3.7%. This is being driven by fantastic challenger brands bringing true eco-innovation to this once traditional category, including our fabulous clients Neat. and Homethings, who are using North Star to maximise their impact with retailers. Shoppers are reacting incredibly positively to this injection of excitement, with innovative offerings aligned to their wants and needs. 

Top Tip 3: Map Out Your Tactics 

Finally, ensure your marketing investment model is joined up, that each activity amplifies the others, and that the tactics you’re investing in will actually drive rate of sale - not just awareness.

This requires an understanding of all the different marketing activities that could be done and selecting the optimum blend of those activities, alongside considering the associated costs/returns. This is a crucial step now, as the retailers can easily swallow your marketing budgets with little return on investment. 

We’d recommend reaching out to other fellow challenger brand founders to pick their brains on what’s worked and what hasn’t, alongside trialling new things to establish what works for you. This is a good time to think about who is going to manage this part of your strategy, be it an agency, internal resource or a freelancer. 

In Summary 

By working through these steps sequentially and getting these three things right, you have an excellent chance of avoiding expensive marketing spends and driving distribution and rate of sale. This is our recommended approach to build smoothly, and profitably, out of the £1-5m category towards full national distribution and brand fame. 

Co-Authored by Kieran South (North Star) & Nigel White (The Marketing Place)

About North Star:

It’s tough for challenger FMCG brands. When your competitors know your performance, even down to your rate of sale, and you’re in the dark, you’re at a disadvantage in every meeting.  North Star gives you a clear, quick, and affordable understanding of your competitors’ performance, in an intuitive dashboard, with expert advice by your side, so you know how to win. North Star illuminates the way to win over retailers, make effective decisions and dazzle investors. 

About The Marketing Place:

We are a team of marketing experts who help businesses grow fast, but in a profitable way. We do this by developing strong category arguments that create incremental growth; brand thinking that builds emotional loyalty; and ensuring distribution grows in line with marketing spend.  Our unique Marketing Investment Optimisation model ensures you spend on maximum impact activities that drive rate of sale.