With growing consumer awareness, an ingredient branding strategy has become a necessary consideration for brands to establish exclusively and for defending their market share. To connect with consumers, brands need to create visible value, and adding a branded ingredient clearly adds an additional layer of value to the product’s overall proposition.
Let’s take a quick look at the world around us and how it is changing.You will not be surprised when you see a builder selling houses with baits of Italian marble and Jaguar fittings.When buying a food product from a super store, you pick it up and generally go through the product’s ingredients carefully and drop it if you have any doubts or it doesn’t meet your expectations.After hours of browsing through products, Sheela selects her favourite gold earrings. She enquires about the quality and drops it on finding it not hallmarked, quality mark for gold. A computer buying customer demanding from a computer seller if his computer has Intel chip inside. A shopkeeper selling a dress saying it has Lycra inside. A woman askingthe shopkeeper if the bag she is picking has genuine leather. “I like this dress but it is expensive,” says a woman shopper. The salesman avers, “But ma’am, this is made of Egyptian cotton.”These, and many such examples are testimonies that point to the changes in buying behaviour of contemporary consumers. Brands, like people, are also getting favourably judged by consumers based on the company they keep, in this case, ingredients/ ingredient brands, etc.
Growing customer sophistication has put pressure on brands to differentiate. Empowered with information at finger tips, consumers are getting more and more demanding. The point here is that there are abundant choices available today and hence, consumers are not satisfied at mere front end brand’s promises. Consumer today want to know what has gone into making the product. They want to know if the people making it/ producing it are happy? (refer to brand ‘Happy cow’). They want to know if the company making it is committed to social cause and community at large. They are asking for more from experts and sources. As a result, many manufacturing brands are feeling the heat to keep the sales growth numbers on an upward trajectory.At the same time, this trend has given rise to an opportunity that was not felt so strongly so far. An opportunity for most manufacturers to create awareness and develop equity with the end consumer, thereby translating into sales and better bargaining strength with the buyer when pushed on prices. The process where the manufacturer starts putting into spotlight an ingredient/component that goes into a product and creating awareness, need and desirability for it among consumers is called ingredient branding. Not surprising therefore that globally, brands like Intel, Dupont’s Lycra & Teflon, Nutrisugar have already successfully forayed in the space and have set extemporary examples of ingredient branding. Going forward with this changing trend, we are likely to see more brands also following the suit.in the space and have set extemporary examples of ingredient branding. Going forward with this changing trend, we are likely to see more brands also following the suit.The company had been witnessing less to flat growth rates and margins were also coming under pressure with increasing competition and stronger buyer bargaining power.
The company needed to think afresh if it had to grow at a fast pace. It quickly spotted a trend where garment buyers were seeking properties like comfortable fashion, freedom of movement, colour not fading, fabric not shrinking, etc., from their garments/clothes. In fact, many a discerning buyers started asking and reading about fabric specifications and companies started displaying them too. Apart from the style/cut of the garment which the designers and retailers were offering, fabric attributes and quality became a key reason for selecting the garment.
Birla cellulose fiber has a unique attribute of imparting drape/ flow to the final product/fabric when infused as an additive. A wardrobe study conducted with consumers, seemed to reinforce this view and women respondents loved this attribute.
Birla Cellulose fiber (that goes through a value chain to become a fabric which then becomes a finished garment) had a unique attribute of imparting drape/flow to the final product/fabric when infused as an additive. A wardrobe study conducted with consumers, seemed to reinforce this view and women respondents loved this attribute as the fabric fall gave shape to the body, instead of looking boxy, as in other fabrics.Meanwhile, what consumers bought was the cloth/ garment and it was the fabric in the garment that consumers experienced and had expectations from.
Hence, it was clear that the attribute consumers were loving, i.e., flow/drape/fluidity had to be married with fabric quality to deliver a clear benefit to the consumer. Thus was born the idea ofingredient fabric brand christened Liva.For this to happen and since company never made fabrics (in fact it was a couple of steps behind in the value chain), a collaborative approach with all people who were involved with making the fabric was needed. The challenge was why would the industry collaborate unless it saw a clear benefit.Hence, a programme christened LAPF (Liva Accridited Partner Forum) was created which offered the partners who came on board innovative design and development support, technical support for development of great fabric , marketing support for flow through of product produced, market intelligence on new innovations, buyer-seller linkage and other similar benefits. The proposition excited the partners as it was a win win for both the manufacturer as well as the buyer.
Fabrics made by these partners in the value chain were thus promoted and marketed to retailers, brands and consumers as ‘LIVA’ with a tag displayed for identification.A unique campaign was created to support and communicate the benefit of ‘fluidity’, a word that was subsuming the adjectives played by the consumer about the fabric, i.e., soft, flowy, drapy and sensuous. The fiber also had the USP of natural origin which was favoured by consumers. Thus was coined the proposition of ‘Natural Fluid Fashion’.
The proposition was not just a product or promise of high quality fluid fabric but a trend with a larger vision of setting women free through garments/ fabrics that allowed easy movement, comfort and draped beautifully.A distinctive LIVA logo and stand out brand colours were worked out to embrace the proposition of flow and fluidity. This distinctive identity helped brands stand out in the retail clutter.Supported by a full blown multimedia campaign (print, digital and outdoor) and a press event-cum- fashion show- cum trade meet, that saw Bollywood diva Kangana Ranaut as the showstopper, Liva was launched with all fanfare. The same got covered across leading print and television channels.When Liva was launched in SS’15, following successful initial test results, it saw 12 leading brands like Global Desi, Van Heusen, Pantaloons and Allen Solly partnering and retailing in 79 cities and around 920 stores. A total of 19 lakh garments were tagged. Over 475 stores adorned the Liva visual merchandise and training sessions were held for sales staff across the country. As on date, there are 2,000 plus stores that have over 85 lakh tagged garments across 197 cities.
Having said this, the current milestone has been achieved in a brief journey of two years. A lot will unfold in the coming years. Meanwhile, the brand has consistently been endeavouring to improve. Every season, it conducts study with the Liva buyers to understand the quality and desirability quotient of the fabric and works towards improving and innovating on the product to deliver superior value.Going forward, as the brand grows, distribution will be further enhanced. Greater distribution will mean more challenges and bigger focus. Challenges are many fold and so are the enthusiasm and commitment levels of the Group and backend teams to make it a success.
Having said this, while ingredient branding appear as a win win for all partners as well as manufacturers as if the host brand is weak, bland, or undifferentiated, ingredient brands can add strength, colour, and distinctiveness. If the host brand is commoditized, ingredient brands can add value, and if the host brand is average, ingredient brands can add quality. Dell adopting Intel, home products using Teflon, Chrysler using Hemi engines are all examples of host brands that have benefitted by ingredient branding.
Having said this, there is always a word of caution for host brands when allowing ingredient branding to their product. A host brand needs to be watchful of the ingredients, the quality of ingredients that make its product/brand. It should be a highly credible source. Else it can become a potential danger/threat. After a study that claimed that an ingredient called MUFA/ PUFA had carcinogenic properties, several food and oil brands spent a lot of advertising money to declare that their products don’t have MUFA/PUFA. Competition around can use this opportunity to kill your market.Patanjali has created an altogether new playing field by attacking competition on this unique ground.The strategy Birla Cellulose is following is unique in many ways as it offers value through a collaborative approach. It is creating a new playing field for the brands. It is a win win for all. Going forward, this approach and new model of delivery can be an example for other category and industry leaders to follow. The litmus test, however, for an ingredient brand would be to reach a stage where a consumer asks, “Does that product have XYZ ingredient in it?”