As Café Bustelo sales continued to rise, J.M. Smucker executives recognized the need to adapt to changing consumer preferences. With the growing popularity of on-the-go iced coffee options, especially among millennials and Gen Z, Café Bustelo couldn’t afford to stay behind. In response, the brand launched an iced coffee product in 2024, expanding its presence into the refrigerated section of stores.
This strategic move not only opened up new opportunities for Café Bustelo but also showcased the brand’s ability to evolve with the market. By tapping into the $3 billion cold brew category, Café Bustelo aimed to cater to a wider audience and further solidify its position in the coffee market.
Emily Lucci, vice president of marketing and coffee at J.M. Smucker, emphasized the importance of seizing opportunities for brand extensions. By leveraging the strength of established brands like Café Bustelo, companies can enter new categories with a competitive edge and drive growth.
Empowering Brand Extensions to Drive Growth
Research indicates that brand extensions have the potential to resonate with consumers and drive incremental sales. Companies like Nestlé have successfully extended their brands into new territories, such as bringing Nespresso into the ready-to-drink coffee sector and introducing Coffee mate cold foam.
Mike Van Houten, vice president of commercial excellence at Nestlé, highlighted the impact of brand recognition on consumer behavior. Seeing a trusted brand in a new context can capture attention and create a powerful connection with customers.
However, the success of brand extensions hinges on strategic alignment and consumer insights. Tiffany Grube, qualitative research director at Curion, emphasized the importance of understanding consumer preferences and ensuring that brand extensions align with market trends.
“Folks still want to explore with food and beverages and so sometimes when you see a beloved brand in a sort of an unexpected place, it does make you stop in your tracks.”
Mike Van Housten
Vice president of commercial excellence, Nestlé
Successful brand extensions require a deep understanding of consumer behavior and market dynamics. Companies must carefully evaluate the fit of a brand extension within the existing brand portfolio and ensure that it resonates with target consumers.
Strategic Expansion into New Categories
While brand extensions offer growth opportunities, companies must proceed with caution to avoid potential pitfalls. Rushing into new categories without considering consumer perception can lead to confusion and dilution of brand equity.
Emily Lucci from J.M. Smucker emphasized the importance of strategic evaluation before expanding into new categories. By aligning brand extensions with consumer expectations and long-term vision, companies can effectively leverage their brand equity to drive growth.
Ultimately, successful brand extensions require a balance of innovation, consumer insights, and strategic alignment. By carefully assessing market opportunities and consumer preferences, companies can unlock new avenues for growth and strengthen their brand presence.