Even as century-old Café Bustelo sales were on the rise, J.M. Smucker management feared the rapidly growing brand was at risk of lagging behind a significant change in the way people drink. The CPG giant observed as increasingly more coffee drinkers reached for on-the-go iced versions on the way to work, while grabbing an errand, or as a mid-afternoon caffeine boost. With cold brews increasingly popular among millennials and Gen Z consumers, Café Bustelo couldn’t be left behind. The category is projected to exceed $3 billion by 2030.
Café Bustelo, which will reach more than $300 million in net sales during its 2025 fiscal year and has had 22 consecutive quarters of growth, was prompt to introduce an iced coffee in 2024. It took the mainstream coffee out of its traditional shelf-stable aisle and into the refrigerated environment, opening up the brand to a whole new part of the retail landscape and expanding the opportunity when a shopper might encounter Café Bustelo at the store.
“We stepped back and said, ‘Okay, where’s the opportunity?’ ” J.M. Smucker’s vice president of marketing and coffee, Emily Lucci, stated. “And then as we looked at our portfolio with Cafe Bustelo, we just saw an enormous opportunity with that brand, in light of where it is now,. to make that even larger.”
With up to 90% of food products failing within a year after launch, companies that take an existing brand into a new space have an immediate advantage. It’s also a financially savvy move, enabling businesses to generate higher returns on their investment as the extension typically costs less money to promote than if they started a new brand from scratch.
“Folks still want to explore with food and beverages and so sometimes when you see a beloved brand in a sort of an unexpected place, it does make you stop in your tracks,” said Mike Van Houten, vice president of commercial excellence at Nestlé. “It’s [an]… unexpected break from the norm. It’s really, really powerful.”
Brand recognition can help a product stand out, with 80% of consumers telling Nestlé that if they have used a trusted brand before, seeing it in a different part of the store is “going to make them … take notice,” he said. Nestlé, for example, brought its 40-year-old coffee brewing platform Nespresso into the ready-to-drink coffee sector last year to tap into demand for on-the-go drinks. The Switzerland-based company also took its Coffee mate brand into cold foam to help consumers replicate the coffeehouse experience at home.
One of Nestlé’s biggest launches in 2024 came after its frozen meal brand, Stouffer’s, entered the shelf-stable food realm with macaroni and cheese. The product helped Nestlé compete in a segment with almost $3 billion in sales and allowed it to take advantage of consumer interest in both shelf-stable and frozen versions of the food.
Tiffany Grube, qualitative research director with Curion, said before companies can take a brand into a new category, they must assess the health of the core product and how it is performing. A struggling brand is likely to face the same headwinds in its new space with the new offering creating additional distractions.
Grube noted companies also must understand why consumers like the brand, as well as what they look for when they purchase it and whether bringing it into a new category fits with what shoppers want and need. In addition, businesses need to determine who they want to attract to the brand and assess whether equity in one part of the grocery store can extend to another category with different consumers, trends and buying habits.
”The benefit of brand extension can be huge. For some brands, it’s the only way to grow,” Grube said. “But you have to make sure it’s done well. When it’s done poorly, you can risk not only losing out on the target that you’re setting out to gain but you can leave your core customer feeling betrayed, or they might stop being loyal.”
served in a cylindrical bottle decorated with the same red, yellow, green and orange stripes as its signature candy wrapper. The product fared well in taste tests, but it failed to catch on with consumers who thought it was too sweet.
Women’s lifestyle magazine Cosmopolitan rolled out a line of yogurt in 1999, but it was discontinued after 18 months. Baby food brand Gerber launched a line of pureed meals called Gerber Singles aimed at adults in the 1970s. The extension failed after older consumers balked at eating what essentially was baby food in flavors such as pureed beef burgundy and blueberry delight despite the convenience of the single-serve containers.
“It’s easy to have a temptation to start to think, ‘You know, I’ve got a brand that is growing. I see other categories that are growing. How might we quickly take our brand into that category?’” said Smucker’s Lucci. “We are trying to be much more strategic and focused to say, ‘Where are the right pockets?’”
Lucci added that entering a space that doesn’t fit with the perception consumers have of a product risks sowing confusion and damaging the overall health of the brand. Smucker carefully evaluates whether it makes sense for a brand to show up in a new category, how consumers may respond and whether the new product fits with the company’s long-term vision.
“We are actually running it through that filter regularly,” she said. “This is what we pay attention to so we don’t take our brand to places that don’t work from the consumer perspective, or that we don’t do it too quickly and that we don’t allow the consumer to come along with us.” Kraft Heinz, which registered $26 billion in net sales in 2024, explained it’s always seeking new places to expand its brands. A product extension that did not work a few decades or years ago might suddenly have transformed into a profitable opportunity today as consumer tastes change.
The potential to introduce some of its brands — such as A.1. steak sauce into butter or Crystal Light drink powders into ready-to-drink alcohol — is central to enabling the food and beverage maker to drive $2 billion in incremental net sales by 2027.
Kraft Heinz last year rolled out Philadelphia Cream Cheese frosting following an observation that the taste ranked as one of America’s top three favorites. The observation was further supported by the fact that there was no competing product in the market without artificial flavors and coloring, or one that wouldn’t take more than a step to prepare from scratch. Philadelphia is also pretty much synonymous with cream cheese, hence a frosting form of the dairy product made perfect sense.
