Category Benchmarks are the reference point for the category.
They define quality expectations. They anchor price ladders. They shape what “normal” looks like. They are widely distributed, culturally familiar, and top-of-mind.
Their risk is gradual dilution of differentiation.
This paradox is structural because the systems that protect their current position often make long-term growth harder.
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The Structural Advantage
When a brand is ubiquitous, its meaning comes from more than advertising. Habit. Childhood exposure. Routine presence on shelf. Cultural repetition. Mental availability is reinforced by lived experience as much as communication.
In penetration-driven categories, growth comes from reaching more buyers more often (Sharp, 2010). Benchmarks already reach many buyers. Their advantage is mental and physical availability.
That availability must be maintained, but not at the cost of meaning.
When brand is underfunded while distribution holds, familiarity slowly turns into nostalgia. Shelf presence becomes passive presence. The brand remains visible but becomes less actively chosen. This is how benchmarks drift toward becoming memory brands.
Loyalty Is A Repertoire, Not A Contract
In most CPG categories, switching carries little risk or penalty.
The Dirichlet model shows that buying patterns are driven by light buyers and predictable switching across a repertoire of brands (Ehrenberg, Uncles & Goodhardt, 2004).
Consumers rotate across brands, respond to price, and experiment within a familiar set. Even highly penetrated brands are bought alongside competitors. Absolute loyalty is rare outside categories with high switching risk.
In such a scenario, benchmarks win because they are easy to recall and easy to access, not because buyers commit exclusively. In categories without switching penalties, loyalty lives at the repertoire level.
When leadership overestimates loyalty, recruitment underfunds itself. Focus shifts to existing buyers. Penetration weakens.
The Default Playbook
When growth slows, benchmarks typically rely on familiar levers.
Line extensions increase SKU count and operational complexity. Unless they create a new usage platform or defend against a defined threat, they risk fragmenting attention and redistribution of demand within the portfolio.
Premiumization drives trade-up and improves mix. It strengthens margins. It does not necessarily increase the number of buyers. Each time I shifted towards premier tiers, I improved margin mix but did not materially expand total category buyers. This is because premiumization depends on purchasing power. When disposable income stagnates and private label quality improves, the ceiling tightens.
Promotion and trade investment stabilize velocity but also train deal-seeking behavior and compress margin.
Price increases protect short-term profitability while increasing vulnerability among light buyers.
These tools protect position. They do not automatically build new demand.
If velocity is stable but household penetration declines, the brand is extracting more from fewer buyers.
Trade-Up And Economic Constraints
Premiumization can drive revenue and margin growth. It cannot expand indefinitely in an environment where purchasing power does not grow at the same pace as costs. That is our reality today, and something most CPG brands need to address.
Trade-up works when consumers can afford to stretch or when value perception rises meaningfully. Over time, consumers trade across or trade down if elasticity tightens.
Premium mix shift strengthens economics. It does not expand the structural buyer base. Share gain within the category can drive revenue growth, but premiumization alone has limits when purchasing power stagnates.
Sustained expansion requires new consumers, new occasions, new channels, or new geographies.
Where Growth Actually Comes From
For highly penetrated benchmarks, structural consumer growth can come from several sources:
Adjacency. Leveraging existing equity to enter related categories. This requires transferable associations. Arm & Hammer moved from baking soda to toothpaste to laundry detergent to cat litter because “natural deodorizing” was portable across contexts. The core equity transferred because it solved a consistent job. But adjacency changes competitive position. In the new space, the former benchmark becomes a challenger. Distribution plus brand equity reduces the risk of failure, but it cannot guarantee demand. Adjacency must be seeded, and how often do big brands have the patience or willingness for this?
New geographies. Emerging markets where the category exists but the benchmark is underrepresented. This requires distribution build and cultural adaptation.
New channels. E-commerce, direct-to-consumer, subscription, and alternative retail formats create access to buyers who don’t shop traditional retail. Channel expansion is structural penetration growth if it reaches genuinely new households, not just shifts existing buyers.
New occasions or usage contexts. Expanding when, where, or how the product is used. This stays within category but unlocks latent demand.
New demographic segments. Not through targeting messaging, but through product formats or pack sizes that remove barriers. Single-serve formats can recruit apartment dwellers or smaller households who were priced out by bulk sizing.
Category expansion through behavior change. Rare and difficult, but possible. Convincing non-users to enter the category or increasing usage frequency among light users.
None of these are new to you. Does it recruit new buyers, or does it redistribute existing demand? What may be different is the categorization. If it recruits, it’s growth. If it redistributes, it’s optimization. And all too often Benchmark brands overindex on optimization.
For example, large organizations often filter innovation by size thresholds. Year-one revenue hurdles eliminate platform-building moves that begin small.
In the case of growth, incrementality may matter more than projected scale.
Innovation And Habit Disruption
Cannibalization is often treated as the primary risk in large organizations. A less studied behavioral risk is habit destabilization.
New formats and launches encourage consumers to reconsider routines. Once a routine is disrupted, evaluation increases. Increased evaluation exposes buyers to competitive alternatives, including private label.
Innovation requires awareness of this dynamic. It must be managed deliberately rather than assumed to trade up automatically within the portfolio.
Organizational Bias Toward Defense
Most benchmarks are structured around revenue stability and margin delivery.
Common structural patterns include:
- P&L systems that penalize cannibalization
- Innovation filters tied to current scale
- Quarterly incentives that reward margin over seeding
- Marketing budgets indexed to current revenue. Declining brands lose media weight. This compounds penetration decline.
These systems favor scaling what exists. They make long-term platform building harder.
Schumpeter described economic renewal as a process of dismantling and rebuilding structures (Schumpeter, 1942). Large incumbents are subject to the same forces.
If renewal does not occur internally, erosion occurs externally, and rarely as a single dramatic event.
- Private label improves quietly. Costco’s Kirkland brand reached quality parity with established benchmarks in categories like paper products and batteries through reformulation and blind testing. By the time incumbents noticed material share loss, repeat purchase parity had already been established.
- Insurgents build identity-based positioning that incumbents cannot easily adopt without destabilizing broad appeal.
- Younger buyers form habits in channels where incumbents are underrepresented or underinvested.
- Subscription and auto-replenishment systems lock in new defaults, reducing active choice.
Christensen (1997) described how incumbents ignore small early threats because they appear unattractive relative to the core business.
American cheese products provide an example of gradual category erosion. Sales declined for four consecutive years as younger consumers shifted toward fresh cheese, string cheese, and alternative formats. The shift was driven by health perceptions and changing food preferences rather than a single competitive threat. By the time category declines became material, purchasing patterns among younger cohorts had already shifted.
Cohort penetration, search intent, and channel mix shifts are early signals. Flat share can mask aging buyer bases.
Defense And Growth
Defense is a valid strategy in mature categories. Many benchmarks should harvest. Extracting profitability from a dominant position is rational strategy when executed deliberately.
Transformation is also valid. Adjacency, new occasions, geographic expansion, channel innovation, and portfolio renewal require time and investment.
Both work.
What fails is the middle ground: harvesting margin while demanding penetration growth. Cutting brand investment while expecting to both retain the core and drive new recruitment. Optimizing the P&L quarter by quarter without building for the next decade.
Pick a lane. Resource it appropriately. Measure it honestly.
Competing Against A Benchmark
Challengers typically succeed through value or meaning.
Competing directly on the core functional benefit reinforces the benchmark’s authority.
Value players need to aim for blind-test parity and price advantage, and not worry too much about branded taste advantages. Halo effects influence branded evaluations (Romaniuk & Sharp, 2016), but in-store decisions are often heuristic and price sensitive.
Meaning-led challengers need to define identities that the benchmark cannot easily adopt without destabilizing its broad appeal. Own that one moment that is highly meaningful to your consumers, but too specific for that Benchmark brand to feel comfortable committing to. Benchmarks defend the default. Challengers reshape the frame.
As a marketer, your job is to compete. Compete differently with The Blake Project.
The Reframe
Benchmarks drift when they:
- Overestimate loyalty
- Confuse trade-up with structural growth
- Underinvest in salience
- Filter innovation only by size
- Delay portfolio renewal
- Optimize current P&L while weakening future recruitment
Defending the default requires discipline. Delaying growth is often a structural outcome of how large brands are managed. Dominance requires maintenance. Growth requires structural change.
If your brand cannot flex to gain new consumers, then you need to consider how your portfolio can do so.
Brands not prepared to disrupt themselves may eventually risk becoming a ‘has-been’, sooner or later.
Contributed to Branding Strategy Insider by Sweta Kannan, CPG Marketing and Innovation Executive
At The Blake Project, we help clients worldwide, in all stages of development, define and articulate what makes them competitive and valuable at pivotal moments of change. Please email us to learn how we can help you compete differently.
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