Ingredient branding

Branded ingredients (e.g. food) or components (e.g. technology powering a product) can boost your demand and prices. In one experiment, sales increased 40%.

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📝 Intro

Smartphones with Gorilla glass screens. North Face coats with Gore-Tex membranes. Apple Watches with Hermes leather straps.

Branding your product’s ingredients or components is a way to make your product more attractive.

73% of people said they would be willing to pay more for a product with a known ingredient.

And as we’ll see today, it can also increase your sales.

P.S.: This study focused exclusively on branding menu ingredients in restaurants. While previous research found ingredient branding to work for a wide range of products, it may be riskier than usual to generalize this insight to your situation. Always test before making big changes.

Previous insight: Simplify your prices (All insights here)

Use branded ingredients to increase sales for your product

Impacted metrics: Customer acquisition | Customer spending
Channels: Co-branding
For: Mostly B2C
Research date: July 2021

📈 Recommendation

Use the brand of ingredients or components of your product to emphasize what you want your product to be known for (e.g. high quality, exclusivity, sustainability).

For example, you can signal reliability by saying that your SaaS uses Amazon Web Services, or performance by telling customers that your car has Brembo brakes.

Make sure this co-branding is aligned with your product and brand (e.g. Barilla pasta may work for a casual restaurant, while Benedetto Cavalieri pasta would be better suited for a high-end one)

Get it right and you will command higher prices and increase sales.

🎓 Effects

  • Ingredient branding is a special form of co-branding whereby a product uses the brand of one of its components to enhance the main product.

  • Previous research found that ingredient branding improved brand attitudes and purchase intentions for both physical products and B2B services.

  • This study extends the findings to B2C services and finds that using branded ingredients increases actual sales and the price people are willing to pay for the product.

  • For example, in experiments, people:

    • Said they were willing to pay 9% more for a pizza with “Galbani mozzarella cheese” than an unbranded one

    • Said they were willing to pay 8% more for a “Lindt chocolate brownie” compared to an unbranded one. However, willingness to pay for the other (unbranded) dessert option fell by 12% when the branded option was present

    • Bought 40% more smoothies at a cafe when they were branded as coming from Love Struck ingredients.

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🧠 Why it works

  • Branded ingredients increase our quality perception of a product.

  • Because we perceive the product as higher quality, we are more likely to buy it and willing to pay more for it.

  • Other factors may also come into play. For example, in the case of Apple Watches with Hermes leather straps, the driver may be exclusivity rather than quality.

✋ Limitations

  • This study focused exclusively on casual cafés and restaurants. This makes it riskier than usual to generalize the results, not only to other products and services but also to other types of restaurants. Still, previous research across different products and services found beneficial effects of this technique, so it’s likely to be an opportunity for your product.

  • We don’t know whether using different ingredient brands would have made the effects stronger or weaker. Previous research suggests that inappropriate brand partnerships can backfire (i.e. that are not a natural product fit in the customer’s mind).

  • In one of the experiments, having an ingredient-branded product next to an unbranded product reduced the willingness to pay for the latter. It’s unclear how widespread this effect could be. In such situations, people might assume that unbranded products are made with low-quality ingredients.

🏢 Companies using this

  • One of the most famous examples of ingredient branding is Intel processors (i.e. Intel Inside), which are used and promoted by several laptop brands, from Dell to Huawei.

  • Other examples include non-stick pans that promote Teflon as one of their components, or Algida’s Cornetto Disc Oreo ice cream.

  • The use of ingredient (or supplier) branding in online products and platforms remains relatively rare, although Amazon Web Services actively encourages it.

⚡ Steps to implement

  • Identify ingredients that you currently use or could use in your product that have brands that are known by your target audience.

  • Select one or more brands that are commonly associated with product attributes you want your product to be known for (e.g. Whole Earth peanut butter for sustainability).

  • Communicate that your product uses those branded ingredients by including them in the product name (e.g. Belvedere vodka martini) or description (e.g. all our cars come with Michelin tires). Include logos if appropriate to make it more recognizable.

  • Check with your supplier or seek legal advice to understand whether you need an agreement to use and promote the ingredient’s brand. The supplier may also be willing to help you promote your co-branded product.

  • In case you don’t identify any interesting brands among your ingredients, consider the alternative technique of branding ingredients by geographical origin (e.g. German steel, San Marzano tomatoes, Tellicherry black pepper).

  • Be careful when choosing which brand to partner with. Ideally, it comes with low risks of reputational damage. You don’t want your brand dragged down by another brand’s failures.

🔍 Study type

Field and online experiments. United Kingdom

📖 Research

Turan, C. P. (July 2021). What's inside matters: The impact of ingredient branding on consumers' purchasing behaviours in services. Journal of Retailing and Consumer Services.

[Link to paper]

🏫 Affiliations

Kingston Business School. United Kingdom

Remember: Because of the groundbreaking nature of this paper, it could be disproven in the future (although this is rare). It also may not be generalizable to your situation. If it’s a risky change, always test it on a small scale before rolling it out widely.

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