So, you may not think you’ve got a portfolio problem. But if any of these symptoms sound familiar… you just might.

1. Premium in Price Only

Your brand used to be the trade-up. Now private label offers the same functionality, similar ingredients, and it’s half the price. What once felt premium now just feels expensive. As categories evolve, consumers demand more value add, and if your offer isn’t evolving too, your premium brands will end up in the mainstream.

This might feel like a brand strategy problem, but it could be down to your portfolio. You need to have the right price tiering to exploit premium opportunity spaces. This means you should be continually developing or acquiring brands to sit on top of those that have become mainstream, instead of just struggling to defend their position.

2. Stuck in Neutral

You feel like you’re doing everything right – investing in innovation, launching campaigns, adjusting pricing, but it’s not turning into the growth you’re expecting.  It’s tempting to blame the execution, but sometimes the real issue is your portfolio.

Categories aren’t homogenous: take beer, for example. Some parts of the category are growing, such as low alcohol, stout (led by the growth of Guinness) and premium world beers. Other parts are in decline, such as cask ale, which is declining to the extent that brewers are turning to UNESCO for help to preserve its historical status.

Your portfolio needs to have the right mix of brands to take advantage of these growth areas and not be stuck just in those that are declining. Without a portfolio designed to find and serve those spaces, putting in more effort won’t move you forward.

3. No Plan, No Leverage

Retailer negotiations can be tough. And deals can involve so many variables such as margins, fees, targets, shelf space, discounts, promotions, location in store or type of store.  If you aren’t going in with clear red lines about what you are willing to give away and what you need to keep, you can find yourself pushed too far and giving up too much.  

It’s hard to know how to value and to trade off what you are being offered if there’s no long-term plan guiding the decisions. But if you have a strong portfolio strategy that is aligned with your category vision for the coming few years, you can view all negotiations through that lens, which makes your red lines much clearer and puts you in a stronger position with retailers.

4. Portfolio Myopia

Internally, your portfolio story makes perfect sense, but retailers don’t see it. Whereas you know the backstory, they can only see a cluttered set of offers, and not a family of brands playing distinct, additive roles. For example, you may have two premium brands that you know are subtly different in heritage, ingredient profile or claim, but from the consumer perspective, there is little to choose. Your sales team is left doing verbal gymnastics to try and explain the difference between Brand A and Brand B and getting little traction.

This kind of disconnect often signals a portfolio that makes sense on paper but not in the market, due to lack of research into future consumer value. And retailers care more about the category and what their customers value than they do about the subtle differences between your brands.

5. Turf Wars

Every time a new opportunity appears, such as a trend, a consumer need or a white space, it can be tempting for every brand to pile in. You end up with duplicated innovation, which can lead to internal turf wars with brands in conflict instead of complementing one another. When nobody’s sure who owns what, whether that’s a consumer, an occasion or a strategic territory, the whole business gets stuck in endless internal arguments that suck time, money and energy.

A well-designed portfolio cuts through the chaos by setting clear roles for brands and teams alike while the opportunity is still new. It may be that, ultimately, the new opportunity starts as a differentiator and ends up as table stakes – zero-alcohol beer was once a niche offer and now every brand has a zero version – but the business should resist having all brands jump on the bandwagon right from the outset. The job of the portfolio is to keep brands as distinct and definable entities.

6. Non-Stretch Brands

Following on from the Turf Wars above, this is a symptom of the opposite problem. You’ve done consumer research and identified an opportunity but, rather than all your brands making a grab for it, none of your current brands can stretch credibly into that space.

For example, brands may be narrowly positioned in consumers’ minds as serving a niche group or need, but the opportunity is much wider and more general. Or they may be anchored in a past need but not set up for what’s coming next for consumers.  

This means there is a gap in the portfolio which needs to be filled by developing or acquiring a new brand or building the story of an existing brand such that it can stretch to the new opportunity. The risk here is that brands just jump in when they are unprepared so as not to miss the boat.

Plant-based food is a great example: many businesses launched plant-based ranges so as not to miss out. When some of these ranges failed, it may have seemed like an innovation issue but may actually have been a portfolio issue instead.

7. Short of Cash

You sit down to plan investment and realise there’s not enough money to go around. In this scenario, one of two things is happening: either you’re trying to support too many brands with your budget or your budget needs to be increased to achieve your growth ambitions.

A good portfolio strategy can help you decide which of these is true. It uncovers where the future consumer value exists and the optimal number of brands needed to unlock it. This means that you’ll easily spot if you have too many brands, as it will reveal where they are overlapping, and competing for the same consumer opportunities. It will also show you how to rationalise. On the flip side, a robust strategy will see each brand allocated a quantifiable share of future growth – which means you can much more clearly make the case for additional investment if needed.

8. The Favourite Child

We all know that you aren’t supposed to have a favourite child. But in many categories, businesses have one or two brands that always get the lion’s share of budget, attention and innovation.

This may just be because they are too big to fail – losing half a percent of share has a catastrophic impact on the bottom line. Or it may be that they are untouchable for other reasons, such as heritage or internal politics. This is sometimes the case in businesses where the top brand is also the name on the door of the company – and it can mean that other brands get stuck in the shadows. A portfolio strategy that defines the role of other brands relative to that ‘favourite’ will help other brand managers make the case for the resources they need to thrive.

9. Distracted by Deadweight

This is the opposite problem to the Favourite Child: when you have a long tail of small brands that soak up time, budget, and attention but contribute little in return. It’s clear that you need to cut some of them. And although you will lose the revenue from the sales they do make, you can redirect resources and make the whole portfolio stronger.

It can be hard to know which ones to let go and which to strengthen. But a clear plan will help you identify why a smaller brand might merit a place in the portfolio. For example, you may be aiming to capture a very specific audience or trying out an emerging trend. Sometimes small brands should be cut entirely and other times the product may have a new life elsewhere in the portfolio, such as when Coca- Cola cut the Lilt brand but kept the flavour as a variant of Fanta.

10. Lost in Translation​

You’re a global business but that doesn’t mean that all of your top brands should be present in all countries. Often global teams roll out brands internationally regardless of the local portfolio into which they need to fit. This can create confusion and tension as ales teams don’t necessarily know how to sell the brands into local retailers and cultural differences may mean that they aren’t meeting local needs.

Portfolio strategies aren’t one size fits all. You need to take market nuances into account. For example, market size – bigger markets may be able to sustain a range of brands doing somewhat differentiated jobs, but smaller markets may need a more tightly edited portfolio.  

So… is it a portfolio problem?

If any of these symptoms sound familiar, it may be time to have a rethink of your portfolio strategy, especially if you are seeing a persistent impact on growth, clarity or performance. And the more of the ten you recognise, the more likely it is that the portfolio is the issue.

As we’ve said before, most brand portfolios aren’t designed. They evolve and they accrete. Even if they make sense at one point in time, they do so less over the years as the world moves on. Portfolio strategy is about future-proofing the business and focusing resource on the brands that will drive growth.

If this piece has struck a chord and you’re starting to wonder if your portfolio is part of the problem, we’d love to help you explore whether it could also be part of the solution. 

At AWE, Laura interviewed previous podcast guest Katie Evans, CMO of Burger King UK, about the Bundles of Joy campaign before Adam and Laura attended talks with brands including Jaguar and Vaseline.

This episode draws together the big themes from the conference including: the growing prevalence of brands adopting a challenger mindset, meeting consumers at their level with authenticity, and thinking about the entire consumer context to create value.

CREDITS:

Katie Evans on The Persuasion Game: https://open.spotify.com/episode/0UpvX4gTogiL7sUE0igZi4

Nick Graham on The Persuasion Game: https://open.spotify.com/episode/3AMSb9808W9MuBzAr9vUyb

Nick Manning and Caroline Marshall on The Persuasion Game: https://open.spotify.com/episode/2TWHtg8o8MDcnx9P4vK546?si=1I5r5OfcRxer5lUENJJ72Q

Burger King Bundles of Joy ad: https://www.youtube.com/watch?v=kFX6lHi6SZs

Jaguar: https://www.jaguar.co.uk/copy-nothing/index.html

Cole Walliser, Glam Bot: https://www.instagram.com/colewalliser/?hl=en

Episodes are released bi-weekly. Follow us on LinkedIn for updates.

Subscribe to The Persuasion Game Newsletter on LinkedIn.

Want to know more about us? Visit our website here: thisistheforge.com

This is an 18Sixty production for The Forge.

The Persuasion Game is available on all your favourite podcast apps: https://link.chtbl.com/PersuasionGame

For further reading on brand portfolio, check out: 

Why your portfolio could be getting in the way of your growth ambitions

Seven success factors for brand portfolio growth

Episodes are released bi-weekly. Follow us on LinkedIn for updates.

Subscribe to The Persuasion Game Newsletter on LinkedIn.

Want to know more about us? Visit our website here: thisistheforge.com

This is an 18Sixty production for The Forge.

The Persuasion Game is available on all your favourite podcast apps: https://link.chtbl.com/PersuasionGame

This isn’t always immediately obvious. The issues our clients are facing don’t always present as relating to their portfolios. Rather, they are asking us to help with sluggish growth, lack of clarity about direction or a general inefficiency in how the brand or the business model is performing. But in many of these cases, we find that portfolio strategy is an underlying issue.

What do we mean by a portfolio?

Broadly speaking, a portfolio is a way of organising the various components of a brand or a business for commercial outcomes. There are three main levels at which portfolios can be organised:

• Total business portfolio: some businesses work across diverse categories with business units or brands that sit within a broad vision or set of operating principles. For example, Nestle has more than 2,000 brands in categories as diverse as bottled water, baby food and pet care.
• Brands: others operate within a defined category (perhaps including adjacent categories) but with a portfolio of multiple brands. For example, Heineken has beverage brands including Heineken, Birra Morretti, Fosters, Amstel and Strongbow.
• Ranging: others still have one overarching brand but with a range of propositions that spans diverse segments within one or several categories. Dove is a great example of this with ranges for different types of skincare, haircare and deodorant all under one brand name.

What does a strong portfolio look like?

At The Forge, our guiding belief is that a strong portfolio should be as simple as possible, but as complex as needed. In general, the fewer brands or products in a portfolio, the better for efficiencies and to stimulate growth.

Effective simplicity does depend on drivers of choice in a category, so understanding this is key. For example, in some categories format is a primary parameter – so Unilever’s ice-cream portfolio is broadly anchored to format – the Cornetto cone, the Ben and Jerry’s tub, the Magnum on a stick.

But in other categories, too many brands will cause confusion. Coca-Cola famously changed their portfolio strategy, unifying the previously separate brands of Coca-Cola, Diet Coke and Coca-Cola Zero as different versions of one top-level brand; research had shown that consumers didn’t understand all the variants.

There are some situations in which it may be advantageous to have a larger set of brands or products. For example, it may be that retailers give you more shelf space when you have more brands, although it is equally likely that they’ll insist on you trading brands off against each other, which can leave you vulnerable.

Beyond simplicity, there are three key principles that define the stronger portfolios we see. A strong portfolio should be:

• Distinct: all components should have an incremental role, defined according to the discriminating aspects of choice within the category, such as target consumers, channels, price-points or needs. For example, Johnnie Walker’s portfolio of whiskies is powerfully dramatised through colour-coding, with each variant targeted at a different consumer segment, from entry-level whisky drinker to sophisticated connoisseur.
• Future focused: designed to reflect a view on how the category and consumer is likely to evolve. For example, Twinings has a diverse portfolio of teas that clearly delivers on the category fundamentals but also pays attention to emerging spaces with, for example, teas for wellness, sleep and energy, cold infusion teas and sparkling teas.
• Anchored in value: brands and products should not make the portfolio cut if they are designed according to theories or hunches about the consumer. They should be based on solid consumer understanding and positioned against specific competitors to deliver commercial growth.

What can go wrong?

Part of the problem is that most portfolios are messy. At whatever level, business unit, brand or range, rather than being purposefully designed, portfolios have usually been assembled, disassembled and re-assembled over time. They are built by default through acquisitions and through decisions about individual products or brands, usually for good reasons, but without considering the impact on the mix.

The weaker portfolios we see typically have one or more of the following issues:

• Duplication: many brands effectively playing the same or similar roles from the perspective of retailers or consumers, often despite the host business defining them on paper as having different roles.
• Lack of horizon planning: the portfolio is rooted in past needs and doesn’t take account of evolution – of the consumer, of needs, of innovation – over time.
• Inadequate investment balance: an overly complex portfolio can be dilutive, meaning that there is less A&P budget to go around – and overlap and lack of focus means that communications impact is not a given.
• Lack of discipline: unwillingness to make clear choices about each component, leading to unclear boundaries between components, resulting in perpetual internal renegotiation and turf wars.

Why is it so hard to get it right?

Portfolio strategy affects every part of the business. It’s not just about making rational decisions about the components and configuration to choose – there are many other forces at work under the surface. Portfolio strategy is about people and politics and as such is affected by how the company is structured and how easy it is to challenge the status quo. Individuals each have their own personal ambitions and hunger for resources for their own area. There can be political issues to combat such as assumptions about the true priorities of the business and about brands or products which are seen as ‘golden children’ and are therefore untouchable.

On top of this there are legacy issues to confront – portfolios that have been optimised against a view of the market that is no longer accurate or were the pet project of a leader who has long left the business. And with complexity there is often a lack of clarity about ownership and a failure to embed decisions into frameworks for future decision making and resource allocation.

What next?

A portfolio strategy project isn’t for the faint hearted. There’s lots to consider (see our forthcoming article for a ‘how to’), not least managing company politics and personalities. But like most things that are a big challenge, there is a big pay off when you get it right. An aligned portfolio is the foundation of long-term business success. It might just be the strategic change that you didn’t know you needed.

From working with clients in this position, we’ve learned what makes a successful strategy, as well as the watchouts and potential pitfalls. We’ve put together seven factors that people often haven’t considered before embarking on a portfolio strategy project, but that can make a big difference, not only to the outcome but also to how easy it is to implement.

1. How we got here

The first step is to understand the decisions that resulted in your portfolio as it exists today.

Why this is important:

You can’t create an effective portfolio strategy without understanding the perceived value of the existing parts, the intentions behind including them and what may have changed.

What to think about:

It’s likely that your portfolio wasn’t purposefully designed but is the product of various innovations, mergers and acquisitions. Digging into that history can help you make sense of why particular brands or products ended up in the portfolio. Some may be conscious choices that fulfil a specific purpose, but others may be there by default or by chance. For example, it’s surprisingly common for a business buy a suite of brands to get access to one ‘jewel in the crown’ and, in the process, get stuck with a bunch of other brands that nobody really cares about.

2. Where we are going

Define the long-term commercial vision and ambition for the brands in your portfolio. But also, be pragmatic – some things may not be changeable.

Why this is important:

Portfolio strategy is one of the most strategic and existential marketing challenges you can tackle. It can include acquiring and creating new brands and delisting and selling others. If you don’t have a strategic commercial vision, everything in your portfolio risks simply having an equal weighting, making these decisions impossible. This can lead to a portfolio makeover where each brand has a role ‘on paper’ without clarity on its strategic role and consequent investment approach.

What to think about:

What problems are you looking for your portfolio strategy to solve? It needs to meet the right business challenges, whether that’s driving innovation, increasing penetration, or defending and attracting specific consumer segments. At the highest level, the problem might be, “what categories do we want to play in in the long term?” But at the more tactical level it can just be about giving your brands clear swim lanes so that retailers can see the value in giving them all shelf space.

You must also consider what you are empowered to change. For example, if you have brands that occupy similar positions and perform the same functions, you may find that the business won’t allow any of them to be discontinued because they are all successful. It’s helpful to consider which brands senior stakeholders are enthusiastic about or where your organisation might have an irrational attachment to a brand, making it hard for you to push through change.

3. The behaviours we are incentivising

It’s important to examine your operating model to uncover the portfolio behaviours you are currently incentivising.

Why this is important:

Too often portfolio strategies look great on paper but don’t create change in the business. We’ve found that brand leaders can resist change if they think that the new strategy will hold their brands back. If this is the case, you may need to change behaviour by adjusting the incentives built into your business.

What to think about:

Are brand owners rewarded solely for growing their brands? The incentive structure must reflect the ambition of the portfolio as a whole and not just individual brands or products. As the category changes and new opportunities arise, you need to think about what incentives are in place to ensure that you can practice portfolio discipline and avoid overlap with other brands in the portfolio.

4. Establish a timeframe

It is important to understand when the portfolio changes need to come into effect.

Why this is important:

Time horizons are frequently overlooked but will make a material difference to the portfolio strategy you create and often come with different stakeholder expectations.

What to think about:

What is the agenda? Are you looking at short-term adjustment or long-term transformation? Talk to all potential stakeholders to get a broad consensus on what horizons the innovation teams are working towards, what are the immediate and longer-term objectives of the brand team, what are the timelines the sales team are working with and what the business is thinking about mergers and acquisitions or corporate developments.

The decision about time horizons will depend not just on immediate priorities for your business versus longer term opportunities, but also the degree of change you are planning. Short term wins might include delisting underperforming SKUs. Longer term goals might include a full restructuring of the portfolio to fit with emerging category trends. You also need to consider whether you will take a phased approach or implement change in one go.

5. Find the Future Consumer Value

Before you create a new portfolio strategy you must have a clear, evidence-based understanding of where the opportunities lie.

Why this is important:

To set any portolio up for success you need to align it with where the current and future value exists in your category.  An evidence-based framework will bring clarity to where to focus and which brands to prioritise.

What to think about:

You need to be clear on the opportunities that you are looking to target. This needs to be more than just an estimate of the annual growth rate – it needs to be an objective data-driven view of the landscape based on consumer research such as a demand space, consumer segmentation or usage and attitude study. If you don’t have such a framework in place, it’s fine to start work on the strategy in theoretical terms, but you will need to conduct such research and quantify the opportunities as part of the strategy project.

6. Be honest about the role of your brands

For the portfolio strategy to succeed, it’s important to be brutally honest about the role your brands fulfil with consumers today and how they are perceived.

Why this is important:

There is often a mismatch between what businesses believe about their brands and how consumers see them. The business needs to be willing to challenge internal narratives so that the solution you create will work in the market.

What to think about:

What is the received wisdom about how consumers interact with a brand within your portfolio? Has this been validated with research? And if so, how recently? An important message for marketer is, “you are not your consumer.” If the marketing team isn’t hearing this, they can make decisions on gut instinct which can miss the mark. Think about whether you truly understand how people are using your brands in their lives – and what you offer that they can’t get any other way? We need to remember that no brand has a divine right to exist and that many of us in marketing believe that our brands are more important than they really are. 

7. Prioritise the jobs to be done

Portfolio strategy is about making choices about where to direct resources to have the greatest impact. You need clarity on what you are going to fix and in what order.

Why this is important:

Brands in the portfolio aren’t all equally weighted. Some will be successes to be accelerated, others will require effort to get on the right track. When used alongside your evidenced framework of the future consumer opportunities, this will help to focus your attention on the biggest jobs to be done.

What to think about:

Have you understood which elements of the portfolio are performing well, and whether there’s an opportunity to grow them further or accelerate their growth? Similarly, are there elements that are struggling? Maybe you have long tail of brands that don’t really fit anywhere, or one brand that is not meeting its potential and needs to be repositioned.

Do you have enough brands in the spaces where there are the biggest trends and the highest potential growth?

What are the biggest jobs to be done? What will you prioritise to have the greatest immediate impact? What will you deprioritise to free up resources.

A successful portfolio strategy isn’t just about creating a plan on paper – it’s about making intentional, evidence-based decisions that drive real impact. And thinking through these seven success factors before you commit can really help with the project.

They discuss the business case for representing diverse consumers, why DEI initiatives are under threat, and the challenges of leading a portfolio across diverse global markets. Packed with valuable insights and practical advice, this episode is a must-listen for anyone looking to better understand and implement DEI in their marketing efforts whilst avoiding the pitfalls.

Episodes are released bi-weekly. Follow us on LinkedIn for updates.

Subscribe to The Persuasion Game Newsletter on LinkedIn.

Want to know more about us? Visit our website here: thisistheforge.com

This is an 18Sixty production for The Forge.

The Persuasion Game is available on all your favourite podcast apps: https://link.chtbl.com/PersuasionGame

Funeral care is an industry with some of the most deeply entrenched traditions, but Poppy’s Funerals is doing things differently. Poppy shares her approach to empowering grieving families, her dedication to offering personalized and respectful experiences, and the importance of breaking societal taboos around death.

Poppy is a truly inspiring entrepreneur, making a huge difference to people’s lives whilst disrupting one of society’s oldest professions.

Episodes are released bi-weekly. Follow us on LinkedIn for updates.

Subscribe to The Persuasion Game Newsletter on LinkedIn

Want to know more about us? Visit our website here: thisistheforge.com

This is an 18Sixty production for The Forge.

The Persuasion Game is available on all your favourite podcast apps: https://link.chtbl.com/PersuasionGame

Advertising: Who Cares? Website for information and sign up: www.advertisingwhocares.org 

Episodes are released bi-weekly. Follow us on LinkedIn for updates.

Subscribe to The Persuasion Game Newsletter on LinkedIn

Want to know more about us? Visit our website here: thisistheforge.com

This is an 18Sixty production for The Forge.

The Persuasion Game is available on all your favourite podcast apps: https://link.chtbl.com/PersuasionGame

Selina shares her journey from a psychology student to a leader in digital marketing, and discusses the importance of empathy and compassion when driving successful partnerships and brand transformations.

Episodes are released bi-weekly. Follow us on LinkedIn for updates.

Subscribe to The Persuasion Game Newsletter on LinkedIn

Want to know more about us? Visit our website here: thisistheforge.com

This is an 18Sixty production for The Forge.

The Persuasion Game is available on all your favourite podcast apps: https://link.chtbl.com/PersuasionGame

They discuss Imme’s unique approach to brand building including breaking the non-alcoholic beverage category rules by creating a hedonistic, pleasure-focused product. She the challenges Botivo has faced in educating consumers and category buyers and the tactics she has used to create awareness and drive trial.

This is a fascinating discussion with a visionary entrepreneur and brand-builder at the top of their game.

Episodes are released bi-weekly. Follow us on LinkedIn for updates.

Subscribe to The Persuasion Game Newsletter on LinkedIn

Want to know more about us? Visit our website here: thisistheforge.com

This is an 18Sixty production for The Forge.

The Persuasion Game is available on all your favourite podcast apps: https://link.chtbl.com/PersuasionGame