As discussed in last week’s edition, Number 1 brands are not immune to long term decline irrespective of the economic situation.

But why and how difficult is it to recover?

Many brands gain or lose category leadership and it’s not easy to recover

Over 14 years around 30% of No.1 brands are replaced by a competitor – and apart from the pandemic, their decline has been continuous with 90% not recovering top spot – therefore not easy to reverse.

Innovation is a key driver of growth for brands gaining the number 1 position – but current levels are low

Brands that have gained category leadership started their rise with significantly more innovation than those that lost the top spot. This innovation was also at a time of economic downturn. So the slower recent pace of innovation is a key concern, given the inflationary situation and Private Label share gains.

Translating new products into increased physical presence is key to number 1 brand growth

By innovating and then backing up with renovation, brands that gained category leadership have driven additional shelf space (and distribution) to underpin their growth – but more recent stagnation, as with innovation, is of concern.