Legacy Supplement Rebranding: 5 Key Steps for Evaluating Brand Health

by Yadim Medore | February 19, 2020

Introduction

It’s not easy being a legacy dietary supplement brand. A brand’s long history can be both a blessing and a curse. A legacy brand can emotionally leverage its authenticity, or it can feel out of touch with the times. Legacy brands have built-in strengths: loyal customers, a proven track record, good distribution, a high degree of brand awareness, a solid infrastructure, and a brand identity.

Some may reap the benefit of an acquisition by a larger, multinational CPG (there are challenges in that, too). Others who choose to remain independent may find themselves at a competitive disadvantage to those legacies that have the backing of a large CPG.

During the past three or four decades, these established brands have benefited from increased consumer interest in health and wellness and the supplement category’s enviable sales growth. They have prospered in a market that has become increasingly crowded. Consider that, in the 1970s, there were only a handful of supplement and herbal supplement brands in the United States. By 1994, there were about 600 supplement companies, producing about 4,000 products, with revenue of approximately $4 billion. Today, there are close to 6,000 companies producing about 75,000 supplement products, boasting revenues of about $74 billion.

Because of this dramatic proliferation of supplement brands, many legacy brands are struggling to maintain their market share. This challenge can be due to unexpected competition or a dramatic change in market forces. New and exciting herbal and dietary supplement brands are gaining attention, many launching as digitally-native, direct-to-consumer brands. Amazon continues to flex its muscle. These older brands are not as nimble as the younger brands (i.e., internal bureaucracy). Whatever the cause, the impact is often a decrease in sales or a replacement on the shelf by new, disruptive supplement brands.

The Legacy Supplement Brand Space

The Coasters

Some legacy brands are coasting. They’ve got their formula for success down. They have a few stellar products and have not really focused much on innovation for decades. And more power to them. They are not looking for anything other than profitability.

The Superstars

These high achievers embrace it all: new products, new channels, full engagement. If they are not the first to market with a new supplement, give them time, because pretty soon they will be leading through innovation. They are not afraid to spend money to make money. They are the “named competitor” that always comes up in the conversation. They take branding seriously. They conduct market research, they protect their IP, and they dominate. It’s not that they don’t have challenges. They live in a high-pressure environment. Some are publicly held and have the added pressure of serving their shareholders. When they make mistakes (and they do), no one sheds any tears. They are not the bad guys: they are just the big guys who are aggressive in their expansion and very protective of existing market share. When they can’t innovate internally, they actively look to acquire emerging brands.

The Middle

The majority of legacy supplement brands live somewhere in the middle. They have their superstar products that guarantee some shelf space. They have invested in producing quality supplements. They take the future seriously, knowing that new competition is always around the corner and that their success does not just rely on manufacturing quality products backed by good science. They face the same regulatory hurdles that everyone in the supplement space does. And each one has challenges specific to its brand. How they address those challenges is often the difference between being an “also-ran” to being a relevant brand, one that competes head on with both the high achievers and the new brand or product du jour.

How you classify your brand in relation to these three, broad definitions is a good way to start our five-step process to help you assess the need for a rebrand.

Step One: Challenge Assessment

There are several challenges common to legacy supplement brands. How many or how extreme any of these challenges are to your legacy brand will determine how big the need is for a redefined brand strategy.

Flat revenue growth

The numbers don’t lie. But when flat revenue growth confronts a legacy brand, the justifications abound: the category is flat. The media is hammering the supplement category with negative press. Sales are down because larger legacy brands that multinational CPGs have acquired provide free fills and outspend all others on consumer marketing to drive awareness and purchase. Sell-through and support from the conventional FDMC channel entered the year before has been less than stellar, resulting in a bad year-over-year comparison.

Some legacy brands are fine with flat sales growth as long as their profit margins remain healthy. Others offset unit sales declines with price increases. However, we’ve observed that flat revenue growth is the canary in the coal mine. It often has less to do with actual sales and more to do with how the brand will be perceived in the future (see the Relevance section below). And it is often an indicator of a corporate culture that lacks passion and urgency.

Key questions to ask if your numbers are flat or declining:

  • Are you aware of the age of your customers relative to the age of the category consumer? The greater the number of years your sales have been incremental, flat, or declining, the higher the likelihood your customer base is aging.
  • Do you have data insights into who the category consumer is and who your key consumers are? There is often a correlation between flat and declining sales and not having consumer insight beyond transactional SPINS data to determine how your growth compares with that of others.

Any “no” answer means you are avoiding the issue of flat revenue growth.
 

Relevance

Diminishing relevance happens slowly and quietly. Then, one day the brand wakes up to realize that it has lost its relevance in the market. This can manifest itself in several ways:

The consumer is aging out.

If market research is conducted, it becomes clear that the customer-base is older (see above) and may be aging out. Yes, they are loyal, and sales may not yet be suffering, but the younger supplement user is going elsewhere. This is puzzling to the brand because what it has to offer is still relevant to the needs of the consumer.

Shelf space is decreasing.

Another manifestation of this dynamic appears when retailers begin challenging the brand’s shelf space. A legacy brand with a perceived lack of relevance finds itself not just competing against other brands; retailers may begin to question whether this legacy brand is adding value to their shelf or is just competing against their more profitable private-label brand.

Key questions to determine relevancy:

  • What other herbal or supplements brands do you think lack relevance, and how many of the same traits do you share with them?
  • Is your packaging iconic or out of date? This is hard for brands to self-assess. Legacy brands have brand equity in their package designs, but that is a double-edged sword. Easy to recognize and identify on the shelf, but with what associations? Market research can help determine how it influences perception and whether a fresher visual identity can keep the old and enthuse the new.

Loss of direction

Most of the legacy brands we know began with a purpose. They had a personal origin story that led to the company’s creation. Sometimes it was a powerful personal or family health crisis that they overcame. Often, it was a villain to rally against—such as the conventional medical system—and they wanted to offer a viable alternative.

Then the company grew. People came and went. Expansion for its own sake became the driving force.

Whatever the case, one day the brand looks at itself and does not really know why it is in existence other than making and selling supplements. What was once a place where everyone felt a deep sense of purpose is now just a job.

Key questions to ask to determine whether you have lost direction:

  • How different is your current mission statement from your original? What is important in this comparison is to determine whether something essential is missing from the new mission: a core belief or a unique sense of purpose, for example. What we find is that what was important at the brand’s inception may have been lost as the brand grew and expanded its product offerings.
  • Are you living up to your Brand Center: the who, what, how, and why of your brand? Patagonia recently challenged its employees to live up to its new mission of “being in business to save our home planet”: If their job was not supporting that mission, then they had to try to make it so. If a brand can’t live up to its Brand Center, clearly it has lost its direction.

Lack of differentiation

Being first has great advantages, but how long can this advantage last? Success breeds imitators. It’s a common story in our space: a leading legacy brand will develop innovative messaging, product nomenclature, or a unique set of reasons to believe. For several years, they drive home this messaging with great success. Then, they notice that their competitors have started copying them.

Features and benefits are essential for product differentiation, but in the supplement space, a successful product and brand will quickly find imitators. From echinacea to omega-3s to collagen to curcumin and now to CBD, the consumer looks to brand, rather than features, when they believe everything else is equal. You can’t rely on brand differentiation in the supplement space through science alone.

Key questions to ask to determine whether you lack differentiation:

  • Do you lead with the science? If the answer is yes, then you need to find other differentiators. This is not to say that science it not important. It’s just not a differentiator.
  • Do you rely on the needs that products are solving for as differentiators? All supplements provide solutions to health needs. Focusing on the need that the product fulfills does not differentiate it from other brands. Every turmeric will have similar structure function claims. What story can you tell about your turmeric that will make the consumer remember and trust your brand more?

Confirmation bias

We’ve found that legacy brands are more susceptible to confirmation bias than their newer competitors. “Confirmation bias” is where people look for data, instances, or anecdotal experiences that confirm their preexisting beliefs. Legacy brands often have executives who have fallen into well-grooved patterns that guide their decision-making.

Additionally, in an effort to bring in fresh perspective, legacy brands will bring in new people from other industries. These new players often start to equate their experience and that of their friends with how “all” people see and engage with supplements. Or they apply the norms and best practices of their previous industry to the supplement space.

Confirmation bias is the enemy of legacy brands. It prevents them from seeing new trends. Depending on the corporate structure (top down or bottom up), it stifles new ideas. It encourages closed corporate cultures by rewarding those who buy into groupthink.

Key questions to ask to determine how much confirmation bias is getting in the way:

  • Have you conducted market research in the last two years? Not conducting custom market research puts a brand at risk of relying too much on confirmation bias. Without good and brand-need-specific market data, the brand lacks objective certainty and is vulnerable to the subjective powers that be. Secondary market research from reputable sources can answer objectively many of the questions a brand should be asking. However, this brings up two issues: First, brands get the exact same data that their competitors do, which is okay but does not give you a competitive advantage. Second, the data do not offer the granular specificity that a brand often needs. Getting to the brand-specific details can tell you how well you really know your consumers and what they want to hear (not what you think they want to hear).
  • Do you hear people in your organization rely on anecdotal personal experiences? Anecdotal information has value. “My mother loves our product because…” “I was at a store when a customer came up and said…” These insights are all helpful for preparing to determine what to investigate quantitatively. However, they are not representative of any market segment. Too often they are spoken by veteran industry people as gospel, passed on from one person to another, representing a moment in time that may or may not be relevant today.

Founder syndrome

Most successful legacy supplement brands have founders with a powerful vision. These founders have invested their lives in their companies, and, for them, their brands are an extension of who they are. They often find it hard to disassociate their experiences with what consumers are looking for in brands, and this so-called “founder’s syndrome” can be a challenge for the brand’s growth.

Over the past decade, many founders of legacy brands have begun reaching their 60s and 70s or older. They are retiring, selling their brands, focusing on specific areas of their companies that drive their passion, or just making a clean break and exiting completely.

Brands that relied on these founder personalities as part of their branding now have to adjust to life beyond the founder. And this is not a simple process. It requires careful and conscious attention to how the brand needs to evolve, with a renewed sense of purpose and core beliefs.

Key questions for determining how you are dealing with founder syndrome:

  • If the founder(s) have left the company and retired, how intertwined is the brand with the founder? This is a difficult assessment. Because the brand is often an extension of the founder’s beliefs, how much does everyone else in the company still align with those beliefs? Is the new CEO someone who is just keeping things on track, or do they have a slightly different worldview? What are you noticing that is different about the decision-making process in the many functional groups within the company?
  • If the founder(s) are still involved, have you had the legacy discussion? This is where the real opportunity exists: to translate a singular vision into a lasting one beyond the personality. Founders want their life’s work to have significance beyond their involvement. But how much are they willing to let go of their personal vision and allow for an evolution of their broader vision? Can they let go of their control and trust in new leadership? This is often where the brand has a real opportunity to become far more consumer-centric than it has ever been.

 

Step Two: Differentiation Assessment

Lacking differentiation is a challenge. However, many legacy brands don’t necessarily see themselves as having differentiation issues. They believe they have the right messaging. Their “customers” know who they are. They have brand awareness.

The truth is that most supplement brands share more brand traits with one another than they own distinct ones.

Take this quick quiz, and, when you are done, you will know how differentiated your brand is:

  • Does your brand lead with the science?
  • Does your brand’s technology/science differentiate it from the competition?
  • Is your solution the best, when compared with similar solutions by the competition?
  • Do you have a commitment to producing the highest-quality supplements?
  • Are you a mission-driven company?

 

The more you answered “yes,” the less differentiated you are. The vast majority of legacy supplement brands would say yes to almost all of the above questions.

And the more you answered “no,” the less impressive your brand is.

Yes, this was a trick quiz. What it demonstrates is how difficult it is to differentiate a brand in the supplement space—especially if you are competing as a premium brand that maintains the highest standards.

Step Three: Taking or Mitigating Risk

The term “legacy” comes with baggage. By definition, it exists because of things that happened at an earlier time. Thus, a legacy brand is beholden to the past.

That past includes not only breakthroughs and heroic tales but a sales history, an expensive corporate infrastructure, the needs of investors and/or shareholders, and the livelihood of employees.

In other words, the needs and wants of legacy brand stakeholders are quite different from the needs of emerging brand stakeholders. This impacts how a legacy brand approaches a rebrand.

The first responsibility of most legacy supplement brands is to protect their assets rather than disrupt the market. This does not mean that a rebrand for a legacy company can’t be bold. In fact, it often calls for more brand courage than that of a startup. With a startup, what brand equity do you have to lose? With a legacy, going the wrong direction can have disastrous results.

Mitigating risks in a rebrand is not about being timid—or too conservative. Some legacy supplement brands err on being too cautious with their rebrands by doubling down on past differentiators, ultimately only drawing attention to their lack of relevance.

Often, a legacy brand will understand what it needs to do to reassert its relevance, accentuate its differentiation, and tap into its authenticity. It will identify its brand opportunities and agree on a strategic direction for the rebrand. All is good until the execution. However, key to execution is how well the rebrand is integrated into the corporate culture.

When it comes to execution, brands fall into two oppositional patterns:

One pattern is that brands see their rebrand as a rebirth. For them, the only risk is if they do not completely embrace it.

The other pattern is when acculturation to the rebrand within the company is minimized. (It’s just marketing’s responsibility, after all.) The old mind-set starts to influence the execution of the rebrand. Pretty soon, because the rebrand does not represent “the way it’s always been done,” the company soon forgets who the rebrand is really for: the target consumer, not the entrenched internal interests. Even though market research points to high receptivity for the new direction, voice, and messaging, everything gets watered down to a rebrand that shifts the brand incrementally rather than making a bold statement.

The only way to provide certainty that a supplement company rebrand is going to have a positive impact on sales is if the entire company culture fully embraces it.

In the end, it is about whether yours is a brand that moves forward boldly or with trepidation. There is nothing wrong with being cautious. But, remember, if everything was going great, chances are you would not be considering a rebrand. If you’re planning on a rebranding process, commit to the findings and embrace them wholeheartedly.

Key questions to help determine whether to take or mitigate risks with a rebrand:

  • What’s the risk of doing nothing? When evaluating risk, it’s important to have a benchmark. It could be that if you continued on doing business as usual, you could expect small sales increases. This could be similar to or slightly less than category projections. On the other hand, you could project significant losses, not only in sales but in shelf space. How you evaluate the answer to this question will help determine how you proceed in relation to taking or mitigating risk.
  • What new constituency are you trying to reach? Please don’t say millennials or Gen Z. It’s not that you should not appeal to this age demographic, but what beliefs, attitudes, and behaviors (not age) of this new constituency do you want to engage? For example, you may want to reach a new constituency that is radical in its demand for addressing climate change. Or you may already have that group and want to reach a more middle-of-the-road consumer segment. Going after new constituencies can affect your existing core, but that may be the best path to future growth.

 

Step Four: Adoption within the Company

With a startup or young company, change is part of the culture. With a legacy, there is an established corporate culture. What makes a legacy supplement brand different from a legacy appliance, software, or clothing brand is the daily connection to the health and well-being of its customer base. This connection has been built over years. It’s not uncommon to have decision makers and employees who have been with the brand for years believe they know “what will fly and what won’t.”

And they may very well be right. But when a brand confronts the challenges mentioned above, a degree of open-mindedness is required.

Once the rebrand strategic development process begins, achieving alignment among the key players is critical.

The next step is making sure the corporate culture adopts this rebrand. It requires extensive acculturation. Leadership must embody it, and employees must understand how and why the rebrand is essential. They will be the first line of communication, and so they must represent the change in direction.

This process of top leadership alignment and employee acculturation is critical for a successful rebrand. A company whose key executives are not on board with its rebrand will often experience rebrand derailment six months later.

Conversely, when a brand struggles through the rebrand process but eventually reaches alignment, it can then first introduce the rebrand to its employees, and, next, with much fanfare, to the trade. By the time the rebrand reaches the target consumers, it will be old hat to the employees and completely understood by retailers. A rebrand socialized this way will result in category leadership.

Key questions to ask to determine how well prepared you are for full adoption of a rebrand:

  • Is your corporate culture one that looks forward to company-wide meetings? Company-wide meetings can feel special, or they can be reminders that there are those who count and those who don’t. A good movie in a drab theater is not the same as a good movie in a great theater.
  • How would you describe your functional groups in relation to their being siloed or collaborative? The more a corporate culture is one that encourages cross-functional communication, where there is true camaraderie and trust, the greater the likelihood that new good ideas will be embraced.
  • How do you measure the effectiveness of your communication to your retailers? Everyone communicates with their retailers—often too much. But few measure how well received their communications are.

 

Step Five: Certainty vs. Uncertainty

Many legacy supplement companies come to us knowing they need a rebrand. And it’s got to happen now. They’ve identified the challenges. They know they need to identify their authentic differentiation. They are anxious to take bold action.

Next, they ask, “How quickly can you do repackaging? How quickly can you redo the website? When can we launch new products?”

There is urgency. Key stakeholders are applying pressure, and the market is changing quickly.

The question we ask is, “How certain do you want to be that your rebrand is the right way to go?” Remember, a legacy brand has many stakeholders who are more concerned about protecting their interests than are willing to take a chance on swinging wildly for the fences.

Many processes can lead a brand down a path of greater certainty, but two critical elements cannot be skipped. The first is performing the due diligence of the discovery process: in-depth interviews with key stakeholders, reviewing any and all market data, and assessing the key opportunities. The second is consumer market research and testing.

One supplement brand we know held strong beliefs about what was right and wrong. Internally they walked and talked the talk, but they worried that they were too adamant or activist for consumers. So even though they knew who they were, they were timid about presenting that way to the public. Wisely, they fielded market research and tested various positioning platforms. Much to their surprise and delight, they discovered that their key consumers wanted them to be more of an activist brand. Without this information, they would not have had the strength of their conviction to go forward boldly and with a high degree of certainty. Not only did they hold onto their leadership position, but they distanced themselves from the competition. Had they acted too quickly before the research, they would have launched a watered-down version of themselves.

Key questions to ask about certainty:

  • When was the last time you conducted market research or bought consumer segmented market research? This is not a sales pitch for market research. It is a reminder to rely on data intelligence that emboldens you to be the brand you should be.
  • If the answer to the first question is that you have recently fielded consumer market research, then did this data answer your key branding questions? Everyone wants the consumer segments that buy the most supplements, and everyone wants to attract the emerging Gen Z and millennial consumers. So even though you are targeting those demographic segments, you should be aware that all of your competitors are doing so as well. Beyond the costs of entry, what is it about your brand that you can embrace as your own that also resonates strongly with your key targets? Do you have those data and insights?

 

Conclusion

This article has provided a step-by-step process that legacy supplement brands can use in evaluating the urgency of the need for a strategic rebrand.

  1. Assess your brand’s challenges to determine the need for a redefined brand strategy.
  2. Assess the level of differentiation that your brand has within the supplement category.
  3. Determine how committed your brand is to embracing a rebrand, whether it is ready to move forward boldly or not.
  4. Understand the importance of alignment within the leadership and adoption of the rebrand within the corporate culture.
  5. Move forward with certainty.

Follow these steps, and you will know whether it is the time to invest in a rebrand of your legacy supplement brand.