Three ways ingredient brands can partner for long-term success

Ingredient branding has grown so mainstream in recent decades that customers often ask for items by their ingredients. From a Dupont Teflon-coated pan to Dodge’s Hemi engine, the more popular an ingredient is, the more it serves as an attractive differentiator that promises a level of quality popular with customers. It also promotes the product to customers who use that ingredient with other products or services. Not surprisingly, this symbiotic partnership between corporations and ingredient companies can offer plenty of benefits for both parties.

Brand partnerships are good for lifting your ingredient brands’ recognition, too. As consumers get accustomed to hearing about your branded ingredient, they seek it out, assuming that it has greater value than similar counterparts. It happened for global tech company Intel, as within about six years, the Intel Inside ingredient brand had cemented its identity as a household tech name.

This doesn’t necessarily mean you should go on a mission to join forces with as many companies as possible. As an ingredient brand, you should be hyper-selective when it comes to the businesses you permit to leverage your name. Otherwise, you risk a disastrous misalignment.

FINDING THE RIGHT INGREDIENT BRAND CORPORATE FIT

As the CEO of an infrared ingredient brand, I have learned just how imperative it is to seek corporate partners that align with goals and values. You might be able to work with any business that shows interest without value alignment, and that can sometimes lead to a fast revenue spike. Unfortunately, misalignment means dissonance and confusion in the minds of consumers, and as a result, revenue gains may be short-lived and peripheral problems can lead to long-term harm.

Imagine you’re an ingredient brand built around sustainability. If your brand engages with a company notorious for questionable environmental practices, the damage to the credibility of that partnership is inevitable, and skepticism of your brand’s other unrelated partners is questioned. Bruised credibility buoyed by public criticism can naturally hinder or eliminate current and future brand partnerships.

Signing on with every available business can dilute your ingredient’s market positioning. Partner selectivity can ultimately support both parties in the manufacturer-retailer relationship. With the rare exception of the Apple iPhone, ubiquity is seldom desirable from the consumer’s viewpoint. Instead, shoppers want their purchases to have an air of exclusivity. This can help secure their loyalty, which Harvard Business Review research associates with 2.5 times faster revenue growth.

With the right partners, marketing communication can become more effective when both parties’ features and goals align. That means less chance for consumer confusion—and more opportunity for customer engagement.

DEVELOPING A PROCESS FOR VETTING INGREDIENT BRAND PARTNERS

As an ingredient brand leader, you want to establish innovative retail partnerships that will work in your product’s favor. Below are several vetting tips to keep in mind.

1. CONDUCT EXHAUSTIVE RESEARCH ON YOUR PROSPECTIVE BRAND PARTNER

Who sits on the executive board of your prospective partner company? Do top stakeholders contribute funding to politicians that could project a negative image onto your brand? Has the company engaged in initiatives that may sway public perception of its brand? What is the public perception of the brand?

Inquire beyond what you think you know about the company. Digging deep takes time but makes business sense. Consumers will be asking these questions of the brands, so it is more important than ever that you do so first. The success of your ingredient depends on choosing wise matches.

2. FIND OUT THE BUSINESS’ COMMERCIAL STRATEGY

Every company has a distinct commercial strategy style. Some consistently overproduce products, prompting them to run a discount-heavy business. Others have a healthy, full-price, high-margin business supported by true loyalists.

Ideally, you should avoid companies with commercial strategies that may dilute your brand. Remember that you’ll be tethered to the commercial strategy of your partner, regardless of whether you agree with it. Therefore, find one that meets your expectations.

3. INSIST ON PROFESSIONAL, COLLABORATIVE RELATIONSHIPS

You should build trust in the business partners you choose. Make sure your engagement is a two-way street and that partners don’t see your company as “just another vendor.” Early red flags that collaboration may be a concern include lengthy delays in between correspondence to respond to communication efforts or battling you on every suggestion.

The strongest partners will give your team members a voice, such as during the retail product development process, to foster a successful manufacturer-retailer relationship. After all, a company that asks about your marketing rules upfront is more apt to follow them down the road. That means less friction for everyone.

Some of the most exciting and innovative retail partnerships in recent years have included an element of ingredient branding. However, you’ll do your ingredient brand a favor if you cultivate brand partnerships cautiously. As with any alliance, these types of relationships work best when both parties are in sync.

Seth Casden is CEO of Hologenix, a materials science company developing life-changing products such as our flagship innovation CELLIANT. This article was originally published in The Fast Company Executive Board