Economic Rebound Bodes Well for Name Brands

Posted by Barry Silverstein on October 30, 2009 05:59 PM

Yesterday, it was announced that the US Gross Domestic Product (GDP) went up. It's been a year since that happened. On the same day, Colgate-Palmolive, Kellogg, and Procter & Gamble -- three of the world's biggest brand-makers -- said their own earnings were up and that next year looks strong, reports the Associated Press.

The faltering economy has brought with it a new, more cautionary attitude on the part of consumers. Store brands and generics have seen a big bump in sales, while name brands took a beating. Consumers looking to save money may have switched from preferred brands to less expensive alternatives. But despite such shifts, many name brands have held their ground and, in some cases, even benefited.

For example. the move to more meals at home helped cereal-maker Kellogg. Procter & Gamble never stopped introducing new products, such as Tide Stain Release and Tide Total Care. P& G said Thursday "sales were rebounding faster than expected."

A down economy meant lower costs for advertising and marketing. Colgate-Palmolive capitalized on this and advertised more. The company "sold more products this quarter than the same time last year," says the Associated Press.

Having survived the worst, the "official" end of the recession is good news for brand marketers. With an apparent turnaround on the way, consumers who are willing to pay a little extra for their favorite brands will be able to afford to do so. Resiliency is an attribute name brands share.

More about: Consumer Goods, Procter & Gamble, Kellogg, Colgate-Palmolive

Greg Zimmer says:

I hope other CPG / FMCG companies have also learned a lesson from the success of the companies you've referenced (during a down economy): Those that have invested in creating, building, and protecting their brands' equity over the years, are better equipped to survive these rough times. The brands that have invested (not just $ – but also in strategy & careful planning) before this recent downturn, have weathered the storm and are better poised for growth in the upturn. The brands that have cut every corner and made rash decisions before & during the downturn, may now find themselves commoditized and even worse off than their store brand competitors.

November 2, 2009 10:54 PM #

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3333I hope other CPG / FMCG companies have also learned a lesson from the success of the companies you've referenced (during a down economy): Those that have invested in creating, building, and protecting their brands' equity over the years, are better equipped to survive these rough times. The brands that have invested (not just $ – but also in strategy & careful planning) before this recent downturn, have weathered the storm and are better poised for growth in the upturn. The brands that have cut every corner and made rash decisions before & during the downturn, may now find themselves commoditized and even worse off than their store brand competitors.

April 12, 2010 11:15 PM #