Whether it is your distillery's new BBQ sauce, your brewery's new citrus flavor or your winery's new premium offering, deciding to add new products to your brand lineup takes careful preparation.
Even though there are many reasons why extending your brand can be advantageous, it's important not to dilute or damage your parent brand's recognition in the process.

Before we look at how to reduce your risks and successfully expand your portfolio of products, let's explore the reasons you might want to extend or stretch your brand:

1. Reducing Perceived Consumer Risk and the Halo Effect.

Using the strength of your parent brand can unlock untapped equity by dawning your new product's launch with the halo of positive brand association. Driven by your brand equity, your existing customer base's favorable bias and general consumer awareness can lend your new products the weight necessary to gain solid traction in new markets.
The prevailing philosophy is that extensions reduce consumer's perceived risk and pave a smooth road towards launching new products. Successfully launching new brands under your parent name can reduce the necessary time and resources dedicated to building a loyal consumer base.

2. Leveraging your Retail and Distribution Relationships.

One of the upsides of choosing to extend your brands is that it can be easier to convince your existing distribution network to take on the new challenge. Using your connections and convincing them your new product is a potential best-seller is much easier when you've already shown them how well you can make your parent brand name move.

3. Less Investment

The assumed belief is that taking advantage of your existing brand name recognition (and all of the research, sales, and marketing & design costs that go with it) will make your new product's costs be considerably lower - leveraging the power of your brand name can give you ample room for growth.
While this is true for some historical extensions, the assumption that the product launch will be seamless can lead to horribly misdirected launches and subsequent brand failures. The key is in understanding your strengths and weaknesses and designing your next products on the backbone of a well-planned market launch.

Once you've decided that you are ready to consider extending your brand, Start by asking yourself the right questions:

4. What are the strengths of the parent brand?

Understanding your company's profile is the first step to a successful brand stretch or extension. If you are a brewery with a successful line-up of offerings and a huge cult following, then it might be best to look at producing a new T-shirt line-up to pad sales rather than messing with your winning formulas. On the other hand, if you are a winery known for producing some top value wines, it's most probable that you can successfully expand your line-up with a new premium offering.

Winter Jack Cider uses the power of Jack Daniel's halo effect to generate consumer recognition.

Take the time to consider your options and don't limit yourself by analyzing just one. The better you are at recognizing the strengths of your company, envisioning your future propositions and analyzing their profitability, the easier it will be for you to grow your brand's offerings.

5. Why will our brand's offering be better than the competition's?

In today's market, there seems to be a new SKU every time you turn around. For new category products, it's a good idea to research your competition and understand their market plans. If you can match or beat their offerings with your new beverages, then you are in a great place to look at extending your lineup. The next step is understanding how to successfully bring your products to market without any hiccups so that they have every chance to compete with category leaders.

6. What consumer recognition can we truly leverage and should we be considering a new SKU?

Despite the perception that extending your brand name is a great way to grow, there are many reasons to consider launching a new SKU instead. Hinging the success of your new launch on the basis that consumer already knows your brand name can be disastrous. This can be particularly true for established companies with novel beverages designed to enter foreign markets. Local or International, if you are a relatively new brand name with little recognition it might be better to launch a new brand than try and stretch your existing one.

The idea is to make your brand's image stronger, not dilute it or damage it. Even if you have established strong brand recognition, you do not want your new label taking market share from your parent brand. Look at your various strategies and opt for those that only leverage your brand's existing strengths. If you can't find a clear-cut solution, then maybe a new SKU is the right decision for your beverage company.

Another of the recognized strengths of brand extensions and stretches is that, generally, no outside recruitment is needed - they are entirely possible to execute with your existing marketing and management team. Finding answers to these questions determines your brand's potential extendable equity.

Now that you have a good understanding as to what extending or stretching your brand means to your company, let's take a look at some tips on how to expand your product line-up.

7. Choosing Your Next Category.

As much as you want to believe that extending your parent brand's resources to a new label means vastly reduced costs, successfully entering a new category means new market research. Although the costs might not be as much as launching a new SKU, you'll need to understand the market you are about to enter and that means putting the time and energy into thorough studies.

There are many emerging and profitable markets to consider and many ways to enter them, so getting the recipe right the first time is paramount to success. Whether you are looking to produce novelty cookbooks, new varieties or enter a different a new drink into a market, use your business sense and feel out the profitability of your options.

You want your new products to be natural spin-offs of your brand image. In other words, you want your family of products to complement each other nicely and create a portfolio of strong players in each of their categories.

Even if it's a simple venture into general merchandising, make sure you aren't hurting any of your labels. This means analyzing things like the potential pitfalls of launching a new, low-cost cork-screw to match your new value line when your parent premium line distribution is in full swing. Looking at every possible outcome is paramount with any launch, and it's no different with choosing your category for an extension.

For example, Craft Breweries are continually launching novel varieties beer under their parent brand name. These examples of extension are considered low-risk attempts, due to the low volume and capital involved and the average craft beer consumer's willingness to try their favorite breweries next brew. However, be it a craft brewery, winery, or craft brewery, caution must be used with this technique. Consumers are creatures of habit, and without a best-selling product with strong parent branding, it can be difficult to coax new and old consumers to follow you down the road of successful experimentation.

Sierra Nevada's strong parent brand give's them ample recognition to leverage their brand name and produce a variety of labels.

8. Find the Right Price Category.

Some companies look at brand extensions as a chance to expand their lineup into new price categories. This can be a very successful technique, but your ability to distinguish the profitability of potential markets will ultimately be the deciding factor. Use your expertise and ask the advice of your retail and distribution partners. Once you've decided on your entry point, make sure your product can compete with the quality as well as the image of the competition.

9. Looking at new Marketplaces

Looking at new markets can also be advantageous. Sometimes your new offering will have a strong market demand in near-by or foreign markets that didn't exist for your parent's brand. Consider different options, depending on your new offerings, by thoroughly studying what it would mean to expand your market reach. Taking market measures into account can focus your team's energy on ensuring your brand's new extension is primed to succeed in both new and existing marketplaces.

Masi, a traditional name in Italian wine, used their parent name to lend recognition to their recent expansion into the Argentina wine market.

10. Plan like it's your first SKU.

Vigorous planning gives you every chance to be as competitive as possible. Looking at different marketplaces, ensuring proper logistics, choosing strategic launch dates, getting proper promotion – these, and everything else you would do if you were launching a new brand, are all great ways to ensure your new launch will be a complete success.

11. Ensure the extension is self-sufficient.

The last thing you want to do it take market share away from the parent brand, nor do you want to dilute or damage the image. Making your new label self-sufficient means starting from the ground up and creating a quality product – from production to the shelf.

The key to a successful launch of a new label is to make it easy to sell, regardless if it carries your best selling brand name. Is your new beverage something that consumers would want to buy over the competition? Once you've got your product on the shelves, you need to translate your hard work behind the scenes into the hard-earned margin.

12. Support your Launch                                                   

Regardless of how well known your parent brand is, every new product needs properly executed launches. This means putting time and money into your digital and traditional marketing channels as well as offering proper incentive programs for your distributors and importers. Use social media, create inbound marketing around your new label, talk to media companies, sponsor events and advertise in as many channels as possible.

About London Beer Competition

The London Beer Competition is being launched to identify and reward those brands and products that consumers actually want to buy, rather than simply recognize good quality beer for their beermaking ability alone. To be a real success a beer brand has to be bought by consumers, be it on a supermarket shelf or a restaurant or bar's list. The London Beer Competition will single out and highlight the beer brands on sale in the UK and International markets that are truly commercially successful. Read more about how it works here.