Thursday, July 06, 2006

Stop Messing with My Favorite Brands!

The Wall Street Journal has a terrific article by Deborah Ball today about KitKat bars and Nestle's ill-fated attempt to market new flavors of them. KitKats are probably my favorite candy. I don't like candy as a rule, but I love KitKats. They are also a favorite candy in Britain.

KitKat bars have been among the best-selling candies in Britain since they were invented here in the 1930s. One of the chocolate-covered wafers is eaten every 47 seconds in the United Kingdom, KitKat says.
Nestle decided to bring out all kinds of new flavors.

So it was natural for its maker, Nestlé SA, to apply to KitKat a marketing strategy that is becoming increasingly popular at food companies world-wide: extending a popular brand into new flavors and styles. The world's biggest food company brought a hotshot executive in from Australia in 2003 to find ways to add variety to the basic KitKat brand in the U.K.

Over the course of the next year, the company rolled out a dizzying array of new KitKats. For the summer months, it launched strawberries and cream, passion fruit and mango and even red berry versions. In the winter came "Christmas pudding" and tiramisu, which contained real wine and marscapone.
The experiment was a failure.

The experiments flopped. In just two years, KitKat's overall sales in the U.K. dropped 18%, to $253 million for the 52 weeks ending in April. Nestlé recently abandoned virtually all of its exotic flavors.
This parallels something I experienced this weekend in preparation for making barbequed ribs and chicken for the 4th of July. Of all of the mass-market BBQ sauces, my favorite is KC Masterpiece. I went to the store to buy some and what did I find? The KC Masterpiece shelf space filled with all kinds of exotic flavors. There was chipotle, hot n' spicy, extra smoky, country style, city style, octopus and mollusk style and muskrat bloodwurst style. By the time they had stocked the parakeet gizzard style, there wasn't much shelf space left for original flavor. I had to root around in the bottles to find the last two. It was annoying.

That's the whole problem with rolling out new flavors. It would be fine if there was an infinite supply of shelf space for each brand. Then you could have black licorice and anaconda liver flavored BBQ sauce or cotton swab and machine shop waste flavored KitKats. No one would care. They'd walk right past them and buy the original.

Shelf space in stores is a scarce resource. Like any scarce resource, companies that do not husband theirs carefully suffer the consequences. Next time you go into a grocery store, check out all of the flavors of your favorite sauce or coffee or candy and see which ones are scarce and which ones are plentiful. It will tell you how much shelf space a company has wasted on unpopular variations.


Anonymous said...

There's always an exception?
Tabasco sauce has a signature smell and a short list of natural ingredients.
But it is way hot, almost a chemical burn. The new-ish green Tabasco and chipotle flavor are out of this world. Esp the chipotle, which has become my fave spicy condiment!

K T Cat said...

That's an interesting comparison. What does it say about controlling the quantity of daughter products?

And when will Tabasco come out with a mollusk flavored sauce? :-)

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