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What media companies can learn from a beer company about brand extension


Assortment of Carlsberg Brewery's newly launched shaving line.
Assortment of Carlsberg Brewery's newly launched shaving line.

When I read recently about Carlsberg launching a line of men’s grooming products that includes shampoo, conditioner, and body lotion, I rubbed my eyes, did a second take, and then Googled to verify that this was not an April Fool’s joke.

This beer giant has indeed embarked on a brand extension outside its core area of specialty and competency. “What were they thinking of?” I thought to myself.

Could it be that the folks in Denmark had become desperate due to the sharp drop in beer sales? Were they simply clutching at the closest available straw to come up with this idea? Or was it as a result of a strategic and well-researched move on behalf of the brand to appeal to its core target audience by servicing their other needs?

The world’s fourth-largest brewer by sales said the idea came from studies highlighting the beneficial effects of vitamin B and silicium that are contained in barley, hops, and yeast — the main ingredients in beer. Jim Daniell, Carlsberg’s international media director, told Adweek that “studies have shown [beer’s] benefits for skin and hair, so this made sense.”

According to data from Euromonitor International, “the proportion of men that care about their grooming rituals beyond the traditional shaving experience is increasing.” Sales of men’s toiletries were up 4% last year to US$3.4 billion.

Digging deeper, I found out that Carlsberg’s research had identified a gap in the men’s beauty market. It found that 67% of Carlsberg drinkers in the United Kingdom said they were prepared to buy grooming products containing beer, and that 62% of men who rubbed lotion on their hands and arms used products that belonged to their girlfriends or wives.

So, unlike some brand extensions that merely carry the name on a third-party contract-manufactured product, Carlsberg shampoo has real beer in it. To be specific, there is half a litre of freeze-dried beer in each 250-millilitre bottle.

The new beauty line “gives us a chance to talk about the health benefits of beer in terms of it being a drink that’s good for the body, when consumed in moderation,” Carlsberg said.

Spiros Malandrakis, senior analyst at Euromonitor International, said big brewers are actively innovating to fight market share losses. Apparently, craft beers and spirits have increasingly found favour with younger drinkers at the expense of beer.

There are distinct similarities between this and what news media owners are experiencing the world over: declining advertising revenues for traditional print products, digital options increasingly finding favour with brand owners, advertisers actively experimenting with newer and more faddish media alternatives, the increasing reliance on social rather than paid media, etc. And the list goes on.

The Carlsberg example is a timely reminder for legacy publishers to continue innovating, or if you haven’t started, to actively do so immediately. As we are all aware, ideas are ideas – none will guarantee a 100% success rate.

However, my take is that if you don’t try, you will never know. If you experiment with 10 ideas and two take off, you (the company you work for) could be laughing all the way to the bank. If you don’t try anything at all, you’d probably not chalk up any blatant failures, but at the same time also not make any headway forward.

In today’s context, not innovating is akin to standing still on a moving treadmill. You are guaranteed to fail and be left behind.

Whether Carlsberg is right or wrong in launching its toiletries vertical, the brand must be applauded for doing something and not just sitting back and watching the inevitable happen.

And even if the line isn’t successful, said branding consultant Dean Crutchfield of DCA Growth Advisors, it’s still good marketing. He sees the launch as provocative and supports provocation as a good ingredient for brand building.

If I’ve managed to whet your appetite on brand extensions designed to empower new revenue streams, then I have a word of caution: It is not as easy as merely slapping your logo on a new product or service. The epic failures in Hooters Air, Colgate television dinners, Harley Davidson perfume, Bic underwear, and the Evian water-filled bra attest to this.

In a piece titled “The No. 1 reason why brand extension fails,” IMD president Dominique Turpin says this is primarily due to not bringing enough meaningful value to the consumer. He quotes McDonald’s across two examples:

  1. The failure of McPizza, because consumers thought that its value proposition was too similar to Pizza Hut.

  2. And the success of McCafé, because it is seen as different, especially by teenagers, for whom Starbucks might be too expensive.

One of my favourite publisher examples is TIME magazine’s TIME for Kids, a weekly classroom news magazine that motivates kids to read. This publication further led to an extension of its own entitled YOUR $, a monthly financial-literacy magazine targeted at teachers, students, and their families, with sponsorship coming from the PwC Charitable Foundation.

Others include Monocle opening up brick and mortar stores, Seventeen selling apparel, The New York Times marketing travel tours (Times Journeys), and Cosmopolitan developing an on-demand fitness and lifestyle channel featuring themed workout challenges (CosmoBody).

And with this, I wish you “happy extending!”

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