The usual suspect: Penetration!

Posted by Oliver Koll on Apr 12, 2017

Earlier this year we identified three ingredients for brand size:

  1. Penetration – How many consumers purchase a brand?
  2. Frequency – How often do consumers purchase this brand
  3. Volume per occasion – How much of the brand do consumers buy on each occasion?

However, are these ingredients equally crucial for growth over time?

Focusing on brand growth over 5 years, for a multitude of brands, categories and countries*, the verdict is undeniable for both growth & decline – buyers are the key.

The top 30% of growing brands increased:

  • Penetration by 37%
  • Frequency by 9%
  • Volume per occasion by 5%.

In contrast, for the bottom 30% of brands with the greatest decline:

  • Penetration was down 34%
  • Frequency down 7%
  • Volume per occasion down 4%.

What is also intriguing is that the price of the top 30% brands remained very steady – an indication of a greater use of price promotions – potentially to maintain the growth patterns.

*More than 14,500 brands in 13 countries and 80 categories up until 2015.