We looked at 6 drivers of recent brand choice for peanut butter. One stands out (it’s not Price). And the second one will surprise you (it’s not Price either).
Food and drink makers in NZ... Most are small. Most of them are struggling. And most of them think that low pricing and store penetration are the core of their marketing strategy. Data shows they’re partially right. And partially wrong.
Naturally, if a product is to sell, it has to be available somewhere and be considered, by some people at least, to be worth paying money for. These facts are easily quantified, but are far from the full explanation for why some brands grow and others quietly disappear.
In our 2024 Brand Essentials project, we looked at what role perceptions play in brand preference. Across nine categories (including peanut butter) we asked users if they thought each of ten or so major brands were Unique, easily Available, had Good Communications, were well-Priced, of good Quality and had Affinity to the user. We also asked about brand purchase and validated this against Circana’s scanner data.
We expected to find what most food and drink manufacturers tell us – that two things matter above all else: 1) pricing and 2) store penetration. And that other marketing levers, if used at all, were of much – much! – less importance.
It turns out that – in peanut butter at least – we are wrong. Half wrong.
Availability helps most brands the most
The half that everyone seems to get right is Availability. Among the six beliefs that we measured, believing that a brand is easily Available is most strongly associated with recent purchase. Half of the peanut butter brands measured in Brand Essentials have Availability as the most powerful factor associated with recent purchase.
This doesn’t mean the brand actually has good availability; it’s whether consumers think they do. A store may carry a brand, but for several reasons the shopper might believe otherwise. Which of these do you control?
Out-of-stock
Reorganized aisles / shelves
Placement too low to see or reach
Sitting too far back in the shelf / appearance of out-of-stock
Occupying so little shelf space it is not noticed
The whole category is poorly defined and even the store staff are unsure where it is (try buying any brand of kombucha except Remedy!)
Obviously there’s a correlation; if people can easily find the brand when and where they expect to, the Availability belief will be reinforced. The belief will be undermined when consumers think (rightly or wrongly) that the brand is not available.
So, before pushing for more store penetration, brands need to make sure the quality of current penetration is up to par. Small brands hoping to increase sales by entering a new city (which could entail a significant investment in category management / merchandising on an already stretched budget) may get an easier sales uplift by scrutinizing and improving the quality of placement in the stores they currently serve.
Disregarding home labels, which are on a tilted playing field in this regard, notable brands who have grown primarily through Availability:
Sanitarium. Remember, on this and Price, Sanitarium did not differentiate from home brands, lost sales and bailed (see our earlier post)
Mother Earth – after Availability, their customers are driven by Price. Mother Earth retails for around the same price as Bega, which is likely to undermine their healthy imagery.
Nut Brothers – looking good. Availability is key, but Price isn’t. Other perceptions have played a bigger role in their success.
Price matters much less
Perhaps the biggest surprise is Price. Not only is it not the Number 2 driver of recent purchase, it’s not Number 3 either. This should serve as a wakeup call (or an alarm bell) for most brands, since there seems to be almost universal reliance on tactical pricing and a belief that price is a key barrier to purchase.
As expected, home brands – Woolworths’ Essentials and Foodstuffs’ Pams – have Price as the primary driver of their recent purchase. Bega is in the unenviable position of being the only other Peanut Butter brand whose recent purchases are driven primarily by Price. Because this will be Bega’s go-to (or only?) weapon for responding to competitive marketing pressure, it is likely to mean that their unit margins are trending negatively.
Affinity – Get to know what makes your brand the right brand for a buyer
Believing that this brand is right for me is the second strongest driver overall in the choice of recent brand. Affinity is what happens when 1) target users comprehend, even if vaguely, the brand’s identity and 2) that identity makes them feel good about buying it.
Only one brand has leveraged this to a high level: Fix & Fogg. Affinity is not easy to grow and the topic merits a blog post all of its own, but here are some characteristics demonstrated by Fix & Fogg which are worth keeping an eye on:
They fight category commoditization through innovation
Their communications show a tight focus on a well-understood target
They show emotion in their content
Affinity can be a frustrating concept to manage because it is nebulous, but it’s also a consumer experience that is largely controllable by the brand. It doesn’t require the assent of retailers, nor can competitors easily take it.
Now what?
“Trust but verify”
Hmmm… that’s not really trust, then, is it?
Take a close look at what’s happening in your stores. Align your consumers’ perceptions of availability with your brand’s actual penetration.
Deploy a merchandising team or partner, if your size warrants it
Conduct daily/weekly in-store monitoring/feedback – our company offers this service
Optimize in currently-used stores before expanding
Figure out what makes you and your competitor brands resonate with buyers. Channel partners will have only a partial view of this; you need to talk with consumers.
Do you have a brand story? Do consumers understand it? Do they care?
What brand assets do consumers see as distinctly and unmistakably yours? (Please don’t say quality).
Do consumers feel there is a use case for the category that fits your brand best?
What, if any, values matter to consumers in this category? Are you aligned with them?
[This is for aspiring market leaders] Can you be a chameleon? Are there multiple segments of consumers which have differing affinity for your brand? Have you chosen NOT to pursue any of them?
The path to growth isn’t just about more stores or lower prices—it’s about making sure consumers perceive your brand as available and feel it’s right for them. Before chasing wider distribution or cutting prices, brands need to fix availability gaps and strengthen their brand affinity. The good news? Unlike shelf space, affinity is something you control.
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