Why Flamin' Hot is the most sensational launch of 2024

In June 2024, Pepsico Netherlands launched a cross-brand innovation across four of their brands for the first time. At the same time. It's now December 2024, so this blog is ‘crying over spilt milk’ because ‘long overdue’. Well, I rather think that every brand organization should draw inspiration and lessons from this, because what Pepsico has done was considered a curse in branding 10 years ago...And is still the case for many non-believers.

However, Pepsico simply applied the principles of ‘How brands [categories/needs segments] grow’ soundly.

What is the case?

Pepsico launched 4 innovations under the Flamin' Hot label at the same time:

1.                     Doritos Flamin' Hot

2.                     Lays MAX Flamin' Hot

3.                     Cheetos Flamin' Hot

4.                     Duyvis Flamin' Hot

In the recent past, it was a No Go to do this, because I can already hear the old-fashioned  marketeers saying, “Duyvis has a completely different brand image, has been synonymous with fun and cosiness for years and Doritos has been synonymous with toughness and boldness for years. This Flamin'Hot is really quite extreme and bold in terms of flavour profile, so it only fits under Doritos.”

Fortunately, we are all learning from marketing science and realising more and more that this is nonsense.

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And why is this nonsense?

Because a different image/different associations is not at all determinant or at least only to a very limited extent responsible for a brand's structural growth. This chart by Bruce Clark* powerfully demonstrates this (36 countries, 112 brands,18,000 shoppers). By the way, this does not mean that brand image does not have a positive effect, it is just that the effect is much smaller than always thought it would be.

What is also crystal clear is the importance of penetration over share of wallet(=other word for brand loyalty). Of course, you need penetration for loyalty and loyalty/inertia/routine is certainly not to be underestimated and obviously to be nurtured. Still, everything starts with building or maintaining penetration - and as we all know - this is often already challenging enough.

So, if you look at it from that point of view, what Pepsico implemented makes perfect sense and is even to be recommended. After all, what are the potential benefits from a Pepsico (corporate) perspective?

-           During the strategic category management sessions with the retailers/OOH players, you demonstrate that you are really going to seriously address this existing needstate. By targeting it with 4 brands (!). The retailer sees this and will be thinking, ‘Whoa, this is serious. We need to make room for this in the crisps category. 'Together, we are going to make Flamin' Hot a success & as long as both parties commit to this, this is going to work and deliver great results. That's how you create a self-fulfilling prophecy.... Quite smart when you think about it.

-           In addition, you create space in the crowded & overloaded brain of consumers, by mentally activating this need for a ‘bold sensory adventure’ within crisps, with 4 brands from different angles. Faster buildup of penetration, which as we know is THE determining factor for success!

-           This is further emphasised by the fact that the four propositions share the same visual identity (purple+fire). Once, this visual cue is activated in consumer's memory, it will become the search heuristic in the shop, when s/he thinks of something really spicy, in the savoury snacking category.  Taking into account the not to be underestimated flavour segments in crisps. “You like corn chips more than crisps? No problem then we have the Doritos version for you.”

The above results in Faster+More people seeing one of these propositions, more people actually using them, at parties, in the schoolyard, at the etc. Yes, you figured it out yourself: Familiarity breeds Popularity....

Of course, from a business point of view, there are all kinds of economies of scale to be achieved in terms of sourcing ingredients (these kind of spices, are ‘spicy’ in terms of ingredients price…), in design, in activation of the 4brands etc. etc. In other words, scalable. Which makes it easier to manage price levels. As with every successful A-brand launch, one can wait for the retailer brands and other A-brands to follow suit with their own versions. One better not be too far off in terms of pricing, because a consumer is not as brand-loyal as the traditional books say they are...

In other words, when putting all of this together, it is a sensational piece of ‘new’ marketing strategy. Here's to more well-thought through, let’s call them sensational marketing strategies in 2025!

This article was published (in Dutch) on the largest Dutch Marketing Community Platform; Adformatie. If you want to read it in Dutch: https://tinyurl.com/LaysFlaminHot

After posting it on LinkedIN, Pepsico supported and agreed to our analyses!.

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#Brandportfolio#BrandStrategy #Marketingstrategy #Branding #Innovation #HowBrandsGrow

Ronald Laan

Multisensorial Strategic Brander

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