How do you know if you have a brand portfolio problem? Businesses don’t typically come to us saying, “We need to fix our portfolio.” They usually come with broader frustrations; growth has stalled or innovation’s misfiring, for example. But under the surface, a common pattern often emerges – a portfolio that’s grown chaotic, confused, or no longer fit for purpose.
So, you may not think you’ve got a portfolio problem. But if any of these symptoms sound familiar… you just might.
1. Premium in Price Only
Your brand used to be the trade-up. Now private label offers the same functionality, similar ingredients, and it’s half the price. What once felt premium now just feels expensive. As categories evolve, consumers demand more value add, and if your offer isn’t evolving too, your premium brands will end up in the mainstream.
This might feel like a brand strategy problem, but it could be down to your portfolio. You need to have the right price tiering to exploit premium opportunity spaces. This means you should be continually developing or acquiring brands to sit on top of those that have become mainstream, instead of just struggling to defend their position.
2. Stuck in Neutral
You feel like you’re doing everything right – investing in innovation, launching campaigns, adjusting pricing, but it’s not turning into the growth you’re expecting. It’s tempting to blame the execution, but sometimes the real issue is your portfolio.
Categories aren’t homogenous: take beer, for example. Some parts of the category are growing, such as low alcohol, stout (led by the growth of Guinness) and premium world beers. Other parts are in decline, such as cask ale, which is declining to the extent that brewers are turning to UNESCO for help to preserve its historical status.
Your portfolio needs to have the right mix of brands to take advantage of these growth areas and not be stuck just in those that are declining. Without a portfolio designed to find and serve those spaces, putting in more effort won’t move you forward.
3. No Plan, No Leverage
Retailer negotiations can be tough. And deals can involve so many variables such as margins, fees, targets, shelf space, discounts, promotions, location in store or type of store. If you aren’t going in with clear red lines about what you are willing to give away and what you need to keep, you can find yourself pushed too far and giving up too much.
It’s hard to know how to value and to trade off what you are being offered if there’s no long-term plan guiding the decisions. But if you have a strong portfolio strategy that is aligned with your category vision for the coming few years, you can view all negotiations through that lens, which makes your red lines much clearer and puts you in a stronger position with retailers.
4. Portfolio Myopia
Internally, your portfolio story makes perfect sense, but retailers don’t see it. Whereas you know the backstory, they can only see a cluttered set of offers, and not a family of brands playing distinct, additive roles. For example, you may have two premium brands that you know are subtly different in heritage, ingredient profile or claim, but from the consumer perspective, there is little to choose. Your sales team is left doing verbal gymnastics to try and explain the difference between Brand A and Brand B and getting little traction.
This kind of disconnect often signals a portfolio that makes sense on paper but not in the market, due to lack of research into future consumer value. And retailers care more about the category and what their customers value than they do about the subtle differences between your brands.
5. Turf Wars
Every time a new opportunity appears, such as a trend, a consumer need or a white space, it can be tempting for every brand to pile in. You end up with duplicated innovation, which can lead to internal turf wars with brands in conflict instead of complementing one another. When nobody’s sure who owns what, whether that’s a consumer, an occasion or a strategic territory, the whole business gets stuck in endless internal arguments that suck time, money and energy.
A well-designed portfolio cuts through the chaos by setting clear roles for brands and teams alike while the opportunity is still new. It may be that, ultimately, the new opportunity starts as a differentiator and ends up as table stakes – zero-alcohol beer was once a niche offer and now every brand has a zero version – but the business should resist having all brands jump on the bandwagon right from the outset. The job of the portfolio is to keep brands as distinct and definable entities.
6. Non-Stretch Brands
Following on from the Turf Wars above, this is a symptom of the opposite problem. You’ve done consumer research and identified an opportunity but, rather than all your brands making a grab for it, none of your current brands can stretch credibly into that space.
For example, brands may be narrowly positioned in consumers’ minds as serving a niche group or need, but the opportunity is much wider and more general. Or they may be anchored in a past need but not set up for what’s coming next for consumers.
This means there is a gap in the portfolio which needs to be filled by developing or acquiring a new brand or building the story of an existing brand such that it can stretch to the new opportunity. The risk here is that brands just jump in when they are unprepared so as not to miss the boat.
Plant-based food is a great example: many businesses launched plant-based ranges so as not to miss out. When some of these ranges failed, it may have seemed like an innovation issue but may actually have been a portfolio issue instead.
7. Short of Cash
You sit down to plan investment and realise there’s not enough money to go around. In this scenario, one of two things is happening: either you’re trying to support too many brands with your budget or your budget needs to be increased to achieve your growth ambitions.
A good portfolio strategy can help you decide which of these is true. It uncovers where the future consumer value exists and the optimal number of brands needed to unlock it. This means that you’ll easily spot if you have too many brands, as it will reveal where they are overlapping, and competing for the same consumer opportunities. It will also show you how to rationalise. On the flip side, a robust strategy will see each brand allocated a quantifiable share of future growth – which means you can much more clearly make the case for additional investment if needed.
8. The Favourite Child
We all know that you aren’t supposed to have a favourite child. But in many categories, businesses have one or two brands that always get the lion’s share of budget, attention and innovation.
This may just be because they are too big to fail – losing half a percent of share has a catastrophic impact on the bottom line. Or it may be that they are untouchable for other reasons, such as heritage or internal politics. This is sometimes the case in businesses where the top brand is also the name on the door of the company – and it can mean that other brands get stuck in the shadows. A portfolio strategy that defines the role of other brands relative to that ‘favourite’ will help other brand managers make the case for the resources they need to thrive.
9. Distracted by Deadweight
This is the opposite problem to the Favourite Child: when you have a long tail of small brands that soak up time, budget, and attention but contribute little in return. It’s clear that you need to cut some of them. And although you will lose the revenue from the sales they do make, you can redirect resources and make the whole portfolio stronger.
It can be hard to know which ones to let go and which to strengthen. But a clear plan will help you identify why a smaller brand might merit a place in the portfolio. For example, you may be aiming to capture a very specific audience or trying out an emerging trend. Sometimes small brands should be cut entirely and other times the product may have a new life elsewhere in the portfolio, such as when Coca- Cola cut the Lilt brand but kept the flavour as a variant of Fanta.
10. Lost in Translation
You’re a global business but that doesn’t mean that all of your top brands should be present in all countries. Often global teams roll out brands internationally regardless of the local portfolio into which they need to fit. This can create confusion and tension as ales teams don’t necessarily know how to sell the brands into local retailers and cultural differences may mean that they aren’t meeting local needs.
Portfolio strategies aren’t one size fits all. You need to take market nuances into account. For example, market size – bigger markets may be able to sustain a range of brands doing somewhat differentiated jobs, but smaller markets may need a more tightly edited portfolio.
So… is it a portfolio problem?
If any of these symptoms sound familiar, it may be time to have a rethink of your portfolio strategy, especially if you are seeing a persistent impact on growth, clarity or performance. And the more of the ten you recognise, the more likely it is that the portfolio is the issue.
As we’ve said before, most brand portfolios aren’t designed. They evolve and they accrete. Even if they make sense at one point in time, they do so less over the years as the world moves on. Portfolio strategy is about future-proofing the business and focusing resource on the brands that will drive growth.
If this piece has struck a chord and you’re starting to wonder if your portfolio is part of the problem, we’d love to help you explore whether it could also be part of the solution.
