January 6, 2021

Start up and scale up: how challenger brands are winning the CPG game

Peyton Sutton

EVP, Client Partnership

Everyone loves a good underdog story. Humans are hard-wired to root for the underdog — the David who has less raw talent, fewer resources or a small chance of winning the game against a bigger Goliath. In the advertising industry, our underdogs are our challenger brands. A challenger is a brand that disrupts or provokes the status quo by creating a product, experience or innovation that flips conventional wisdom in the category. Challengers intentionally deviate from established brands to create space for a dramatically different result.

Big CPG behemoths are taking notice of the challenger brands, carefully watching how they start-up and scale, in hopes of replicating their success. Here’s what we’ve learned about how challenger brands disrupt the category and stay true to their brand identity as they grow. 

Start (up) with Why

In Simon Sinek’s essential business book Start with Why, Sinek tells us “People don’t buy what you do, they buy why you do it.” While many traditional brands and products are created to meet a functional need, challenger brands start first with a higher order purpose: the emotional consumer need. Every single decision these brands make is centered around that emotional decision, and the function that follows suit. Take our clients at Charlie Banana, for example. Charlie Banana was not founded to create a superior diaper solution, but rather, to help solve a global environmental crisis by reducing the volume of single use plastic in disposable diapers. All innovation, communications, supply chain, hiring, and creative decisions are made for Charlie Banana with one question in mind: “will this further our mission?” Challenger brands are obsessed with their purpose and that resonates with consumers in a way that established brands simply cannot match. 

It’s not business, it is personal

Challenger brands are uniquely positioned to create a one-to-one consumer relationship because their brand purpose is steeped in meaning. They genuinely want to help like-minded consumers make informed, better-for-them decisions with their purchasing power. Challenger brands rely on consumer relationships to serve their mission. 

No one has built and maintained personal customer relationships like our partners at Native. Since day one, Native has relied on a constant feedback loop and direct customer communications to fuel every single product innovation the brand has made. Native customers demanded more sustainable packaging options and Native listened, pledging that the entire product line up will have plastic-free options by 2023. This constant feedback loop and direct consumer connection has fueled scale and growth for Native, leading to an acquisition by P&G in 2017. 

Identity Integrity

Big name acquisitions like that between P&G and Native often mean big time assimilation, with challenger brands’ bold missions being diluted by scale, rules and regulations, or reimmersion in the status quo. The boldest thing you can do as you scale is to remain steadfast in your commitment to your values and operational methods while the pressure to be like other brands weighs heavily on your business. After Native was acquired by P&G, the company assimilated into P&G by doing absolutely nothing, resolving to maintain their brand identity and stay true to their roots. Native had a meaningful connection with their customer base and that was exactly what made them so successful. That secret sauce is what retailers simply can’t replicate, and what CPG brands can’t do alone because they are just too large and too established. 

Find the right intersection between your brand purpose and creating real relationships, and never sway from that. If you can do this as a challenger brand, your brand will succeed and scale organically. We’d love to tell you more about how we helped Charlie Banana and Native stay true to their purpose as they continue to grow and scale. Just like other start-up companies, they aren’t afraid of the Goliaths of the world, and they are ready to share their stories.

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