When Co-Branding Works
A question that we often get asked at CEI is whether co-branding will work with various customers in foodservice. The key to success is in understanding how a co-brand will benefit both brands equally.
Many product brands of all sizes want to build awareness by using the might and reach of a larger foodservice chain. When I worked at Dunkin’ and Baskin-Robbins we successfully launched a variety of key co-branded initiatives that were great fits both for the product brand (OREO for example) and for our products. In fact,some of the initiatives were so successful we would spend a great deal of energy trying to find ways to deepen the partnership and further the co-branded offering through permanent menu items or recurring LTO’s.
At Dunkin’ and Baskin-Robbins we did a tremendous amount of work with Mondelez, mainly with the OREO brand, and they were truly a great partner. They would find unique ways to ensure brand fit and really came to the table with fantastic ideas about how to meld the brands together. You could argue that the two sets of brands were very much on the same level and helped each other succeed.
Both Brands Must Benefit
The challenge really comes when one brand doesn’t have as much to offer, and they come to the table only looking to capitalize on the size and scope of a large QSR, for example.
There’s a great cartoon here by Mark Anderson that I think illustrates this idea well.
Co-branding really needs to be a proposition where both brands will win, not just one. Both brands need to bring something compelling to the partnership.
If, as a supplier to foodservice, growing your product brand is a key cornerstone of your business plan, it is imperative to find the right customers/partners who will embrace that philosophy. You must also have a compelling value proposition to ensure that they want to use your brand name on the menu.
For example, say you’re a large QSR who deals mainly in snacks, treats, and indulgences. You might say your customers don’t want healthier or better-for-you items from your brand. However, there could be a variety of pressures to offer healthy options from your board of directors or leadership, or other stakeholders. Utilizing a co-brand strategy here can be a great way to both gain credibility in the space where you are not an expert, while at the same time protecting your own brand identity.
Or perhaps you are a QSR Burger chain who wants to expand beverages and occasions, and you’re looking at new platforms like the growth of cold coffee and espresso beverages. Perhaps you would look at a co-branded cold brew program to initiate your launch.
Don’t forget differentiation and flexibility.
One problem that a large national QSR might have with using your brand is that it won’t differentiate them! After all, they don’t want to have the same product everyone else has on their menu. Think about how you can make your product custom to them if possible. Can you give them a special size, or customize the flavor to work with their products? What sort of fantastic marketing opportunities could you present to bring to the table?
Also, the product really must work “back-of-house” in foodservice. Operators usually cannot just take a retail brand and a retail packaging and make that work. They need foodservice specific products and packaging.
Alternatively, as a company your brand may be important but filling volume and line time could be a key initiative to ensure your company is profitable, and you may be looking at a large QSR who could fill that volume with your unique product or capability, but branding is less important.
Bring the research
If your budget allows, use research to show how your brand will drive incremental sales to your target customers. How does your brand target consumer overlap with the Chain’s consumer? Field research on specific concepts and show how the branding increases purchase intent or brand halo scores. This can be expensive; however, it can really crack open the conversation. Perhaps using your brand even allows the chain to charge a higher price!
Summing it up
All of this is to say that you need a sound strategy for foodservice co-branding whether you’re a supplier or a brand. Understanding that both brands must benefit and bringing a compelling value proposition to the table is extremely important. Even with a strongly branded product you still must have key points of differentiation from competitive products that ensure success at the restaurants. You also should offer flexibility to customize products and research to show that your consumer matches your customer needs.