Incumbent or Insurgent

The consumer landscape is a constant dance between established and emerging brands.

While headlines often trumpet the rise of disruptive startups and the demise of stodgy incumbents, the reality is more nuanced. It's undeniable that emerging brands have made significant inroads in recent years. Armed with agility, innovation, and a direct-to-consumer focus, they've captured market share in previously stagnant categories. Insurgent brands often leverage dissatisfaction with established players, capitalising on perceived weaknesses like lack of responsiveness, slow innovation, or outdated marketing strategies.

The consumer landscape is a battlefield. On one side, established brands, titans of industry with decades of brand loyalty and market share, stand tall. On the other, nimble, innovative insurgents emerge, armed with fresh ideas and disruptive approaches. The question that burns bright is, who will claim victory?

Recent analysis reveals a fascinating truth. It's not a simple binary. While emerging brands have undoubtedly carved their niche, capturing significant market share, the death knell of established giants is far from ringing. Many consumer product brands, weathered and wise, continue to thrive, proving that resilience and adaptation are key weapons in this war for consumer hearts and wallets.

Writing the obituary for established brands is premature. Recent analysis reveals that many continue to thrive. Consider the likes of Coca-Cola, Nike, and Procter & Gamble, household names that have weathered decades of competition. These brands possess distinct advantages: established brand loyalty, robust distribution networks, and deep financial resources. Moreover, they've learned to adapt, embracing innovation, acquiring promising startups, and investing in digital marketing strategies.

The dichotomy of incumbent versus insurgent is too simplistic. Many brands fall somewhere on a spectrum, exhibiting characteristics of both. Understanding the evolving needs and desires of their target audience is paramount. Continuously seeking new ways to improve products, services, and experiences is essential, and responding quickly to market trends and adapting strategies accordingly is crucial. Building trust and emotional connections with consumers is the key to long-term loyalty.

The future of consumer brands is likely to see continued coexistence and competition between incumbents and insurgents. However, the lines will continue to blur. The most successful brands will be those that can embrace the strengths of both archetypes, demonstrating adaptability, innovation, and a deep understanding of their customers. The true battleground lies not in the label but in the ability to consistently deliver value and relevance in a rapidly changing world.

Bain & Company’s latest analysis shows many established consumer product brands continue to achieve success. The report studied established consumer product brands’ market share in 23 product categories across 11 Asia Pacific markets over a five-year period (2018 – 2022). It revealed that among 253 category and market combinations Bain studied, large incumbent brands lost market share in 44% of cases against emerging or insurgent brands, held steady in 28% cases and won in 27% of cases.

Interestingly, there was no single category where incumbents lost share across every Asia Pacific market, nor a single market where they lost share across all categories.

Emerging brands come armed with several distinct advantages. Unburdened by legacy systems and processes, they can adapt quickly to changing trends and consumer demands. Unafraid to challenge the status quo, they can introduce disruptive products that resonate with a new generation of consumers. And leveraging digital channels, they can build authentic relationships with customers and bypass traditional gatekeepers.

However, established brands also hold significant strengths. Decades of marketing have built deep trust and loyalty among consumers. They already have access to established distribution channels and retail partnerships. They have the financial muscle to invest in research, development, and marketing, allowing them to innovate and adapt.

These advantages have enabled many established brands to fight back. Think Coca-Cola embracing sustainability, or Gillette addressing toxic masculinity. These companies recognised the winds of change, adapted their offerings, and remained relevant.

The reality is not a simple insurgent vs. incumbent battle. Both sides have strengths and weaknesses, and success hinges on adapting to the evolving consumer landscape. Consumers expect brands to understand and cater to their individual needs. Transparency and genuineness are crucial for building trust.

The consumer battlefield is not a zero-sum game. There's room for both established brands and emerging insurgents to thrive, so long as they adapt, innovate, and connect authentically with consumers. The future belongs to those who can navigate this dynamic landscape and deliver value that resonates in a constantly evolving world.

The rise of online shopping and changing consumer preferences have fuelled the insurgent fire. Younger generations prioritise transparency, sustainability, and personalised experiences. They're drawn to challenger brands that offer clean ingredients, unique value propositions, and direct-to-consumer convenience. These newcomers can be more agile, adapting quickly to trends and exploiting niche markets.

Take plant-based milk, for example. Established dairy giants were initially slow to react, while vegan startups captured the zeitgeist.

The story isn't one of clear winners and losers. Instead, it's a complex dance of adaptation and co-existence. Established brands are increasingly acquiring or partnering with insurgent startups to gain access to their agility and innovation. Meanwhile, some insurgents are scaling up, leveraging the incumbents' distribution networks to reach wider audiences.

As a smaller market compared to some of the others mentioned, New Zealand might have higher barriers to entry for new players due to limited economies of scale and potentially fewer funding options. This could favour incumbents, as could New Zealand’s generally stable and transparent regulatory environment, which could benefit established players with existing regulatory knowledge.