What Is Ingredient Branding and How Does It Link to Retail?
2020 has been a bit of a retail paradox: on the one hand, the year has been devastatingly brutal for retail. On the other, it’s been exceedingly good for retail. Which side your business is on depends quite a bit on what you sell and how you sell it.
That said, whatever you sell, surviving — or even thriving — in 2020 requires resilient marketing techniques. One of these is ingredient branding. But what is ingredient branding, exactly? And how can savvy digital marketers in the retail space use this tactic to their advantage?
After reading this article, you’ll get a deeper understanding of ingredient branding and the ways that it links to retail. You’ll also learn about some examples that implement this tactic as well as the types of co-branding and how these work.
- What is Ingredient Branding?
- Why does Ingredient Branding matter?
- How ingredient branding links to retail
- Ingredient branding examples
- Types of Co Branding
- Wrapping up
What Is Ingredient Branding?
In a nutshell, ingredient branding is the process of using branded components inside (or as a part of) another product. It’s paying to license another brand’s product or technology into yours, usually with the intent of promoting that additional branding and either expanding your customer base or increasing sales (or both).
Many ingredient brands don’t sell to the public, or it’s only a small part of their business. Instead, they primarily (or exclusively) sell to manufacturers. Classic examples here include :
- Intel: computer processors
- Gore-Tex: waterproofing
- Teflon: nonstick coatings
- Microban: antimicrobial and antibacterial solutions
- Corning: Gorilla Glass for smartphones
Other instances of ingredient branding (especially the ones you find at the grocery store) repurpose or incorporate something about one brand to enhance another.
We’ll get into specific examples a little later, but for starters, we’ll create a hypothetical example. Let’s take Oreo cookies as an example. Oreos are fantastic, of course, and in recent years, Nabisco has branched out with all sorts of inventive flavours.
Nabisco could, in theory, seek to draw in new customers via ingredient branding. Imagine a Skittles-flavoured pack of Oreos with five different fruity fillings, or maybe a Red Bull- or Mountain Dew-inspired edition. Would they taste good? We don’t know! But by licensing and harnessing other flavours and brands that consumers already know, Nabisco could see a sales spike.
Much less hypothetically, Oreos themselves are an answer to the question, “What is ingredient branding?”. You can find Oreo-branded cookies-and-cream ice cream from Breyers. In this case, Breyers is executing the tactic using Oreos, just like Nabisco could using Skittles or Mountain Dew.
Breyers theorised that by using real Oreos and paying to use the brand, they could sell more cookies-and-cream ice cream than without the tie-in. And given how long the mashup has been on the market, they must have been right.
Why Does Ingredient Branding Matter?
There are a number of reasons why ingredient branding works, and we’ll focus on just a few. First, consumers are overwhelmed with choice. You know this personally, right? When you shop for toothpaste or shampoo, you’re greeted with an absolutely staggering number of brands, flavours, types and subtypes.
No human has the capacity to carefully weigh the differences between 70 types of toothpaste, yet that’s how many options you’ll encounter at your nearest big-box retailer.
With so many choices, consumers face decision paralysis. Some even double down on what they know in reaction to feeling overwhelmed.
So, what is ingredient branding’s role here? You can use this strategy to make your product familiar in a way it wasn’t before. This change just might be enough to cut through that decision paralysis.
Another reason ingredient branding works is the comfort factor. Humans are nostalgic creatures trying to make ordered sense out of a chaotic world. When they see a known (and, even better, loved) brand on your product packaging, they form an instant connection. They know that company or flavor or product. If they have positive associations with it, those positive associations now transfer to your product.
Of course, for ingredient branding to succeed, it must fit into certain parameters, like both brands’ brand guidelines. Nabisco isn’t going to sign off on flavoured vape pods, for example, because it would (we assume) violate their brand guidelines and tarnish their image. Similarly, many ingredient brands that trade on quality or exclusivity might decline a partnership with a poorly made no-name manufacturer.
How Ingredient Branding Links to Retail
We covered some of this in the previous section, but the main link is finding a way to stand out from the crowd. Shelves are crowded with options, and online shopping can quickly get overwhelming. Smart ingredient branding cuts through the chaos by providing something familiar or desirable that can differentiate a product from the competition’s.
The other major link is quality. A clothing company may subtly establish quality by boasting about using YKK zippers or textiles from a specific fair-trade co-op. You may not know exactly what you think about Fictional Clothing Co., but its ingredient brands begin to paint a picture.
Ultimately, a successful ingredient branding partnership will enhance the image of your brand, whether through differentiation, quality enhancement and association, or some other way.
Ingredient Branding Examples
Let’s look at some ingredient branding examples to understand how this functions in the real world.
Some of the most well-known examples don’t require much explanation. Intel doesn’t really market products to mainstream consumers. Yet the brand is a near household name. For years, PC notebooks slapped Intel Inside stickers on the palm rest, and for that sticker alone they could command a higher price.
Teflon is another ingredient brand in this category. You can’t exactly buy Teflon, but you can buy all sorts of cookware and kitchen gadgets coated in it. And a generic nonstick pan doesn’t have near the convincing power of a nonstick pan with Teflon. Curious how they get a nonstick substance to stick to stuff in the first place? Check out this interesting video.
In scenarios like Intel and Teflon, manufacturers enhance their own credibility and desirability through ingredient branding.
There’s another category of this strategy, where instead of using a company’s primary output as a component, a brand uses just one product or feature from another company. Antimicrobial shoes, of all things, are a great demonstration.
Keen is a shoemaker catering largely to the active outdoor crowd. Outdoor feet tend to make for stinky shoes, so years ago, Keen sought out to add antimicrobial technology to its shoes.
Now, could a large shoe company theoretically develop a solution for adding antimicrobial properties to its shoes? I’m not a scientist, but let’s assume yes. If a company can engineer high-end synthetic footbeds, it’s no stretch to assume they can develop a microbe-killing solution.
The larger question is whether they should. First, would customers believe them? Or would the feature be dismissed as a marketing gimmick rather than a truly functional enhancement? Second, would customers tend to assume a shoe company should be trusted to do this right?
Instead of going it alone, Keen partnered with Aegis, incorporating their Microbe Shield product directly into their shoes. They gained the authority of a trusted brand, bolstering their position in the market.
Not to be outdone, competitor Teva licensed some Microban technology for the same dual purpose: the move added value to the product and authority and familiarity to the brand.
Speaking of Microban, their strong consumer image makes them a valuable partner during a global pandemic. Luggage maker Samsonite recently announced its own partnership with Microban on a range of antimicrobial travel accessories.
Retail food is another huge area for ingredient branding (and, more specifically, co-branding). Pillsbury’s Toaster Strudel brand tends to feel like the less popular cousin to Pop-Tarts. But add in Cinnabon branding (and frosting), and you mix two complementary brands. People can’t buy fresh Cinnabon cinnamon rolls at the grocery store, but the idea of getting something similar is tempting.
A Note on Ingredient Marketing
With a new understanding of ingredient branding, some might still be trying to understand what is ingredient marketing in layman's terms.
Ingredient marketing is simply the marketing component of ingredient branding. It’s the sloshing cola cups in fast-food advertising: come for the burgers, stay for the Coke. It’s similar to ingredient advertising, where one brand creates and funds an ad that boasts of a particular ingredient brand.
For a deeper dive on this specific subtopic, check out this case study and explanation.
Types of Co-Branding
Co-branding is similar to ingredient branding, but with a more equal partnership. Take Nike and Apple, a great example. Apple offers a variety of its Apple Watch that’s co-branded with Nike, simply called Apple Watch Nike. This partnership goes far beyond simply borrowing a few design elements or a key technology or feature. The two brands worked together in partnership to develop unique features and finishes not available separately or elsewhere. Apple Watch Nike is also one of a few great cooperative advertising examples. Some of the ads look just as much like an Apple ad as they do a Nike one, and that’s not an accident. Both companies benefit from the advertising and may have shared production and advertising costs. Therefore, at least for the time being, the two dominant methods to co-brand items is by:
- Creating an equal partnership between brands (like the example above)
- Creating an unequal partnership between brands (small brand identifies with bigger brand to increase its exposure - like the Breyers/Oreo example)
- Finally, we may a partnership between brand and customers, for example when customers compete for the new model of a sneaker, or are able to customize an item as they see fit (e.g. Printful or Printify business model).
After reading this piece, you should have a deeper understanding of ingredient branding and co-branding and a more robust answer to the question “what is ingredient marketing?”:
- Ingredient branding is the process of incorporating a product or feature from a trusted maker into your product, usually for the purposes of familiarity or authority.
- Ingredient marketing is advertising along the same lines, where a business's ads incorporate ingredient brands from other companies for the same reasons.
- Using these tactics is an essential tactic for standing out from the competition in a crowded retail space.
Armed with this knowledge, you're ready to get out there and execute.