The Rise Of Insurgent Brands

How some small brands are rewriting the growth playbook. They are capturing more than their share of the growth — and no category is immune

- Brian Mcroskey, John Blasberg, Guy Brusselmans And Charlotte Apps ​​​​​​​

Brands such as Noosa, Bai and Halo Top didn’t exist 10 years ago, but within a decade, they’ve changed the competitive landscape and become a major thorn in the side of big consumer products companies by capturing a disproportionate share of growth and, in some cases, radically disrupting profit pools.

We call these types of brands insurgents. They are dynamic brands with a clear vision and an entrepreneurial mission, committed to fulfilling an unmet need — whether it is for organic peanut butter (Justin’s), more affordable beauty products (e.l.f. Cosmetics), or probiotic beverages (KeVita). Such brands have achieved more than $25 million in annual sales and have outpaced their category growth rates by more than 10 times over the past five years. Some achieved $50 million in annual sales within five years of launch; a few are generating annual revenue in excess of $500 million. While some of these brands have recently been acquired, they achieved their growth largely as independent brands.

These insurgent brands may only account for 2 per cent of the market share across the 45 categories that they’ve disrupted, yet they captured around 25 per cent of the growth from 2012 to 2016. While they are more prevalent in larger and more fragmented product categories, the reality is that no category is immune to disruption. We’ve seen the consequences play out. Chobani picked up 20 per cent of the US yogurt market within 10 years; Dollar Shave Club and Harry’s led to substantial price drops and market share loss to leaders in the razor category, reshaping profit pools.

As consumer needs change and as these small, nimble brands are able to meet those needs at an increasingly lower cost and faster pace, it is hard to imagine a future in which these brands will not continue to gain meaningful share.