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The Power of Branding

04 April, 2019

The power of branding is an aspect of the corporate world that often goes unnoticed. It has proved both a catalyst for growth and a ballast in times of decline for countless businesses navigating the ever-changing consumer environment. In an age of increasing product offerings and ever more agile ways of reaching consumers, its power is more essential than ever.

In the early 19th century, sweetening a cup of tea was surprisingly tiresome. Sugar was imported in enormous 'loaves' which would then be attacked by a grocer wielding a small axe or grater. This was then physically repeated on a smaller scale by the consumer at home with 'sugar nippers', which shaved them into smaller yet still uniformly irregular shapes. Such was the hassle that many consumers simply took to dunking large chunks into their drinks and then leaving them to dry out before reusing them at a later date (cue palpable horror from modern tea drinkers.)

It wasn't just sugar; before 1870, most groceries were predominately unpackaged, unprocessed and often adulterated. It took a former grocery assistant named Henry Tate to change this when in 1872, he bought and patented a sugar-cubing machine. An intensely simple concept, the uniformity of the sugar cubes thus allowed the customer to exercise product control and introduced an element of ease to what had become a rather messy affair. This combined with Tate's branding (and the inherent individuality and sophistication that came with it) gave rise not only to Henry Tate's colossal fortune, but to an entire industry.

There was no great invention, no new idea that pulled the rug from under competitor's feet, but instead a marked shift towards branding and consumer needs, rather than a focus on simply importing in bulk, marking up and then shifting product on. This creation of 'value from nothing' led to the newly merged Tate & Lyle's Thames Refinery becoming the largest in the world by 1939 and Henry Tate becoming one of the most prolific collectors of contemporary art in the UK (he would end up funding the construction of the Tate Britain art gallery in London.)

In some ways, Henry was at the forefront of what would become a branding revolution, as consumers moved away from generics into the modern age of pre-packaged and branded goods. Along with William Lever, who did the same for butter and soap that Tate did for sugar, he changed the landscape of consumer retail.

Not only was an advertising industry born, but the concept of brand value began to take hold. Today the concept is the basis for reams of business academia as well as the strategies of many of the world's largest companies. In the 2018 Interbrand Best Global Brands report, 46% of the top fifty global brands as measured by the consultancy are over 100 years old, a staggering number considering the cultural and technological changes that have occurred during this time. Longevity is seemingly accompanied by market performance as well: between 2000 and 2017 the top 100 brands outperformed the MSCI World Index by nearly 100%.[1]

The power of branding therefore appears self-evident. It is how companies can maintain margins and economic moats for such extended periods of time. It is why consumers will sometimes pay significantly more for identical products separated only by labelling, such as painkillers. And it is why in 2006 Lyles Golden Syrup set a new record as the longest unchanged brand in British history. Its longevity is symptomatic of its clout and this concept cannot be ignored by corporations or investors alike.


[1] Interbrand Best Global Brands 2017.

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