The Secret Weapon to Bigger Profits

How challenger brands make better ranges and bigger profits

Challenger brands have one thing in common – the best ones shake up the categories they operate in, fulfilling a consumer need that most onlookers did not even know existed.

Retailers have been quick to cash in on challenger brands while their mainstream competitors often take note – and attempt to reflect the trends they tap into in their lines.

“Everyone has different needs and missions and they’re evolving all the time,” says Natalie Lightfoot, co-owner of Londis Solo Convenience in Glasgow.

“They even change daily. One day, someone will be looking for a healthier product during the week, but then treat themselves on the weekend. And for us, it’s making sure brands meet these missions.”

Why Shoppers are looking for high-protein

Protein products are still soaring in popularity, with estimates of a 7.6% CAGR each year to 2030. It’s become a key category for retailers to stock. And its popularity – arguably – can be attributed to Grenade.

Grenade started its journey online and in health stores, like Holland & Barrett, before its rapid expansion into grocery retail and convenience stores.

“Grenade was one of the first protein brands we stocked,” Sarj Patel, owner of Pasture Lane Stores in Bonnington, Loughborough. “And we still have reps coming in to offer its latest flavours.”

Grenade’s success has since enabled other brands and suppliers to reflect the protein trend in their products.

These brands include the likes of Snickers Hi Protein Low Sugar, which expanded to offer a white chocolate variety last year.

The success within this category also led cereal bars and other healthier snack brands to expand their already popular ranges to offer a protein variety, such as Eat Natural, Nakd and Nature Valley.

It also spurred on other challenger brands. Huel Protein shakes and bars are rapidly growing in demand. The brand uses plant-based ingredients like oats, peas, rice, flaxseed, and sunflower seeds, filling a gap in the market for those following a plant-based diet.

The challenge for retailers is navigating what is quickly becoming a saturated market. However, many say this has made them more confident in stocking new brands if they’re based on something similar.

“We always try new products because you might be surprised at the success,” Patel adds.

Patel always stocks one case of new launches and gauges customer reaction as a metric to see if they should become a permanent line.

“Even if a new product doesn’t work out, at least you can say you’ve trialled it. You can always sell one case of any product, so what do you have to lose?” Patel says.

Why you should look for new product launches

Sometimes a new product launch unexpectedly becomes a permanent line in store. For Lightfoot, this was Propercorn, positioned as a more premium alternative to Butterkist.

“I didn’t think Propercorn would stick around because Butterkist is so cemented into snacking, but it has fulfilled a different mission,” she says. “People see it as a healthier alternative for school lunches, while families will buy Butterkist on the weekends when they want a treat.”

For many consumers, snacking is a treat, but most want a healthier alternative. While Butterkist fulfils one need, Propercorn taps into both.

Its success led to more alternatives entering the market – like Metcalfe’s – all of which aim to fulfil the healthy snacking mission.

On occasion, a new product helps to expand the category in a new direction. According to Lightfoot, this was Jack Link’s Beef Jerky.

“Before Jack Link’s entered the market, the only meat-based snack was Peperami,” she says.

Lightfoot introduced the line to her stores, merchandising it on a clip strip, and it has since become a top seller for her.

“Because shopper missions have evolved so much in recent years, it’s allowed room for these brands to thrive and help us, as retailers, drive sales and meet these needs in a better way,” Lightfoot adds.

The energy drink phenomenon

It’s hard to remember a time before energy drinks lined shelf after shelf in convenience stores, but it hasn’t always been the case. Just a few years ago, Red Bull was one of the only energy drinks on the market.

It was them – and evolving shopper missions – that paved the way for the likes of Monster and Relentless to become convenience staples.  

For Lightfoot, the popularity of these brands depends on the channel shoppers use. “We do so much on delivery and shoppers will take advantage of our Monster deal, but won’t always buy them in-store,” she says.

“It’s about making the most of everything. There are so many energy drinks on the market that are now essentially pushing other soft drinks brands out.

“These brands help fill the market and these products are helping them get their share of the market, too. It’s all about meeting different needs.”

The energy market is expanding further, with self-styled ‘cleaner’ drinks with added benefits such as Virtue and Tenzing broadening the market. Meanwhile, performance brands like Nocco are tailoring their energy drinks specifically to gym-goers, a demographic that all convenience stores should be considering.

Should you stock Mainstream or challenger brands?

If you’re looking at a growth opportunity and you’re wondering whether to list the original or a mainstream brand copying the trend, which do you pick? While the latter will have marketing power and brand recognition, the former usually comes with bigger margins, an authentic story, and a willingness to go the extra mile to support the early stockists that back them.

Looking to Create Your Own Range Of Differential Challenger Brands?

At Epicurium our job is to try and make this decision as easy as possible, so get in touch to find out how we can support you in stocking a winning range that captures trends right at the start.