Stand by your brand: despite some drawbacks, several product introductions reflect the benefits of merging two brands, but can the whole truly be greater than the sum of its parts?

Prepared Foods, May, 2003 by William A. Roberts, Jr.

A brand is often a company's most valuable resource, On first consideration, combining a pair of brands would seem a mutually beneficial arrangement. Such a maneuver helps reach new consumers, extends them into new areas of the supermarket and allows multiple marketing benefits. In the long run, co-branding should be more about building brand equity rather than immediate sales numbers. However, not all of co-branding's results are so positive. If the co-branding effort falters, the damage can extend beyond the shared product and into each participant's stable of products.

Battle of the Brands

Co-branding in the food industry is nothing new. General Mills (Minneapolis) added the Sun-Kist name to Betty Crocker lemon layer cake mix in the late 1960s, about the same time that Kellogg's (Battle Creek, Mich.) added Smucker's (Orrville, Ohio) fillings to Pop-Tarts. The partnership efforts hit a peak decades later when, in the early 1990s, a flurry of co-branded products raced onto store shelves. Some were successful, but others serve as prime examples of the dangers of co-branding.

Delicious/Frookie (Des Plaines, Ill.) gained recognition in the mid-1990s with a line of cookies boasting brand-name peanut butters, Land O'Lakes (Minneapolis) butter and a different cookie of the week featuring a co-brand. The strategy would have been sound: the little-known company capitalizing on a relationship with an extremely well known brand. The problems surfaced on the package.

According to Elinor Selame, BrandEquity International (Newton, Mass.), "Delicious would shout the co-brand on their package design--that Planters or Hershey's were in these cookies. All the cobrand partners had strong recognition and strong brand assets. Delicious probably went to these companies and said, 'We'll use your products, but we want to shout it on our packaging.' They did and were the first in the food industry that started to do it very vigorously."

Unfortunately, the company's own brand was completely overpowered by its famous counterparts. It failed to create and leverage a strong trademark on its packaging.

A successful co-branding effort--one that is beneficial to both sides--requires two strong brands in their own right. "That was the problem with Delicious," Selame believes. "They were not well-recognized, nor did they try to make it a strong brand. They gave prominence to whomever was their invited guest. A company has to decide carefully if one brand should be highlighted or if they should share equal space, and if so, how do you do that in a great looking package design? What kinds of brands should get married to what kinds of brands? Not all of them are suited for each other."

Ultimately, Delicious' endeavor netted only short-term gains. Often, such collaborations work in the short-run by increasing consumer awareness about a product. For true success, the product must answer a consumer need, and the participants must be compatible. It also helps if the pair target similar consumers and if the brands are held in roughly the same regard in their respective categories, i.e., two premium-quality items or two with lower price points.

Creating Co-dependence?

The selection of a co-branding partner is not to be taken lightly. Each participant risks its brand's integrity in the venture. As Mitch McCasland, founder of Brand Inquiry Partners (Dallas), notes, "If something happens to either participant, that will affect the co-branded product." Furthermore, the impact could extend into each participant's respective other lines.

When approached with an offer to co-brand, a company should research to understand the consumers of both companies, he says. "Make sure that they have the potential to enhance your brand by virtue of a positive association with another brand. Make sure the relationship is giving something residual to your brand, something that is going to stick around for a while."

McCasland identifies a key problem with some past co-branding efforts. "Not testing it with consumers first. Not making sure there is a conceptual acceptance of the product. The association may seem to make sense and, in fact, benefit the brands in question. However, just because it sounds like a good idea does not mean it will garner the trust of the consumers to open their wallets."

One such example never made it out of test market, although the concept seemed to be a natural. A peanut butter and jelly cracker featuring both Welch's and Skippy--properties of Welch Foods Inc. (Concord, Mass.) and Unilever Bestfoods Inc. (Englewood Cliffs, N.J.), respectively--went into test market and was rejected. Consumers reportedly found the product too confusing.

A (Co-)Brand New World

Consolidation within the industry has led to an increase in co-branding efforts, as a number of major companies have moved to leverage the power of their valued brands. For instance, Munchies combines the value of Frito-Lay's (Piano, Texas) Rold Gold name with Quaker Squares from Quaker Oats Company (Chicago). While leveraging the power of each brand, this endeavor ultimately benefits the owner of both--PepsiCo (Purchase, N.Y).