Challenger Brand Study 2016

Challenger Brand Study 2016

Challenger Brand Study 2016

Challenger Brand Study 2016

The Decade of the Challenger Brand

The only constant in the Consumer Packaged Goods (CPG) industry today is disruptive change. It can feel overwhelming, but we at the Seurat Group take comfort in our belief that the more things change, the more the foundation for success remains the same: it all starts with the consumer.

Brands are merely people that build trusted relationships with consumers. When established brands become misaligned and are not able to deepen relationships with existing consumers and attract new ones, an opportunity
arises for an emerging brand to fill that void.

Those brands that authentically connect with consumers’ needs, values and community can become Challenger Brands.

Challenger Brand

A brand that stimulates long-term growth by disrupting the dynamics of an established category or creating
a new one.

The Decade of the Challenger Brand

We believe the Challenger Brand trend will only accelerate and become the most defining and disruptive force in CPG this decade for two primary reasons:

​Larger CPG firms have difficulty orienting towards a total category approach, beyond the positioning of their established brands, to deliver against consumers’ changing expectations within a category.

The barriers to entry for emerging brands are lessening with channel fragmentation. Retailers are hungering for new growth and greater resources available to build these brands

The 2016 Study

The goal of this year’s study is to celebrate the brands that are poised to emerge as Challenger Brands this decade and to illustrate the behaviors and practices that allow them to do so.

We believe within every brand lies a Challenger opportunity and we hope this study allows our clients to unlock their Challenger within.

This year’s study again draws upon our network of industry experts, from manufacturers and retailers to brokers and distributors, and our deep experience across categories. The big changes in this year’s study are twofold:

Our Top 10 Challenger Brands are, on average, smaller in revenue size than the brands featured last year, reflecting our belief that Challenger brands ‘get it right early’ with proof of concept and execution occurring within channels and regions.

Our Challenger Brands are found across the store, unlike last year’s brands, which were primarily focused in Food and Beverage. This demonstrates that disruption is not category specific; rather, every category is subject to disruption.


Product & How they are positioned to challenge

Multivitamins & Wellness Boosts

Olly’s bright, simple packaging with focus on consumer-friendly benefits (e.g., Sleep, Beauty, Bones) in a disruptive brand block at shelf allows it to break through amongst a sea of confusing, “scientific” vitamin brands, categorized alphabetically at shelf.

Plant-Based Dairy Alternatives in Cheese, yogurt, cottage cheese
The non-dairy alternative segment in Milk is nearly $2B and growing at 9% annually. Lyrical Foods, parent company of kite hill, is creating great tasting, non-dairy alternatives in cheese, yogurt and cottage cheese with simple ingredients and artisan techniques. Using Whole Foods as its incubator, the kite hill brand is poised to mainstream its portfolio across more channels in 2016.

Cosmetics & Personal Care

While many brands and retailers are hesitant to talk about ingredient safety, Beautycounter has brought the issue front and center. Bypassing traditional retail in favor of direct to consumer sales, Beautycounter sets itself apart by publishing and sticking to its “Never List” – a list of ingredients never found
in their products.

Electrolyte Tablets
Currently the top-selling electrolyte sports drink tablet in run, bike, and outdoor specialty stores, Nuun is poised to disrupt a segment of the multi-billion dollar sport and energy drink market. The tablets dissolve in tap water and deliver real performance to everyone from elite athletes to business athletes.

Men’s Shaving System

Walker and Company’s mission is to make Health and Beauty simple for people of color. The Bevel Shave System, their first line, established a strong presence online, and is now launching into Target stores. Riding this multi-cultural wave, the brand is positioned to enter multiple segments to better cater to needs experienced by people of color.

Breakfast & Dessert Mixes
Kodiak Cakes are usurping established players by offering more of what
consumers want – fiber, protein, and whole grain – and creating new segments like minute microwave muffin cups that align well with consumer needs for healthy, convenient options.

Cold-Pressed Watermelon Juice

Already making a splash with A-list celebrities, WTRMLN WTR is exploiting a new segment of the cold-pressed juice category with their raw, electrolyte and vitamin filled watermelon juice. The brand uses “damaged” melons from family owned farms, allowing farmers to make a profit from what would have previously been wasted and appealing to consumers’ needs for sustainable and traceable brands.

Ketchup, Mustard, Mayonnaise
Sir Kensington’s has established a loyal and ardent fan base by offering a line of condiments free from artificial ingredients, factory-farmed eggs, and GMOs that is more aligned with consumer values than established brands within their categories.

Single-serve entrees, chicken & beef alternatives

Similar to non-dairy alternatives, the potential of great tasting, plant-based meat alternatives in the traditional meat case is significant. The brand has aspirations to improve human and environmental health, and animal welfare by bringing meat-free to more consumers for more occasions.


Notebooks, pencils, folders, etc.

With support from celebrity-investor Usher and expertise from Yes To founder Ido Leffler, Yoobi is disrupting the Arts & Crafts supplies space with its “Buy 1 Give 1” model and emphasis on continually introducing fresh, fun designs.


Challenger Brand “Algorithm” for Growth

While our Top 10 Challenger Brands play across different spaces, they all share similar behaviors and practices that form the algorithm to accelerate growth.

We call this algorithm the Challenger Brand Accelerator curve, and have summarized each step using examples from our Top 10 Brands.

While each step is critical by itself, challenge-worthy growth occurs when they all work together seamlessly to change consumer dynamics and truly disrupt an established category.

Challenger Brand Accelerator Steps

Communicate a compelling, differentiated ‘reason for being’ that authentically connects with your target consumers’ needs, values and communities.

Aggressively innovate against growing consumer trends; or simply put, pour gasoline on what’s working rather than trying to fix what is not.

Manage channels with a view towards the demand landscape, specifically using incubator channels as a marketing vehicle to build one-to-one relationships with your target consumers.

Embrace and continuously invest in category influencers to create a tribe of ambassadors leading a groundswell movement for your brand.

Over-invest in ecommerce, digital, and social to establish “proof of demand” and build a platform for consumer education, insights, and engagement that cascades across the demand landscape.

Ensure that your brand has stopping power and communicates your “story” at shelf; most consumers will meet Challenger brands at retail.

Help retailers drive differential category growth and achieve their strategic goals in order to increase retailer engagement to brand plans.


How do Our Challenger Brands Bring These Strategies to Life?


Step & Example

1. Have a Story

Beautycounter sets itself apart from other cosmetics and personal care brands via their intense and clear focus on ingredient safety. They position themselves as pioneers of safe ingredients by providing educational resources, conducting proprietary research, and prioritizing organic, natural, and plant-derived ingredients.

2. Accelerate Consumer Trends

Though the dairy-free milk category has been disrupted hugely over the past several years, kite hill takes it a step further by expanding that successful trend into other dairy segments such as yogurt, cream cheese, and cheese spreads that have been less of a focus for recent dairy alternative entrants.

3. Curate Demand Through Channels

Sir Kensington’s built the buzz around their brand by becoming the condiment of choice in locations like the Ritz Carlton, Bareburger, and The Spotted Pig, where the most ingredient conscious, trend-forward consumers count on finding high quality, buzz-worthy brands.

4. Go Beyond Everyday Ambassadors

Nuun’s mission is to inspire healthier, happier, and more active lifestyles. To that end, Nuun partners with over 300 athletes nationwide, ranging from amateurs to Olympians, with the end goal of inspiring others to become more active, and demonstrating that optimal hydration is a must for everyone — not just elite athletes.

5. Win in Digital/E-commerce

Bevel’s website communicates not only their brand vision and product information, but their blog, “Bevel Code,” a resource for information on lifestyle and grooming trends, and lets them connect better with target consumers. After establishing success online with with direct to consumer sales, the brand is launching into physical Target stores.

6. Stand Out At Shelf

Olly’s brand block of brightly colored, consumer-friendly benefits (e.g., “Sleep,” “Beauty”), disrupts the sea of alphabetically organized, jargon-heavy vitamin and supplement bottles that shoppers are accustomed to seeing in the aisle today.

7. Add Incremental Value to Retailer

Yoobi’s “Buy 1 Give 1” model provides a dual benefit to retailers; first, by driving socially conscious shoppers to trade up from less expensive brands, and second, by creating a halo effect where retailers benefit from being seen supporting socially conscious brands.


No matter the size of the brand or position in a category, true revenue growth is available by unlocking the Challenger within. Take a category approach to identify where and how to deepen relationships with existing consumers and attract new ones by authentically connecting with consumers’ needs, values, and community.

Though the brands celebrated here are younger in their growth trajectory, we truly believe that every company should consider these brands’ lessons and growth algorithms as part of their annual planning in order to disrupt and drive new growth in their categories.

To learn more about Challenger Brands or the Brand Accelerator curve, please contact us at

Challenger Brand Study 2017

Challenger Brand Study 2017

Challenger Brand Study 2017

Challenger Brand Study 2017

By now, the term “Challenger Brand” has become part of the CPG industry’s lexicon. We have been tracking these emerging brands for the better part of this decade, and continue to believe that leading Challenger Brands are the harbinger for how organizations will build brands in the future.

This year’s Top 10 list features brands from across categories, departments, and even distribution models, reinforcing their broad influence.

We discover our Challenger Brands by crowdsourcing opinions from our robust network of leading-edge industry insiders, and from diligence work on the investment side of our organization – Seurat Capital Group. After you learn about this year’s brands, follow the links at the end of our article to revisit the brands featured in years past. But first, enjoy our Top 10 Challenger Brands to watch for in 2017.


Product & How they are positioned to challenge

Toothbrushes / Toothpaste

These elegantly designed electric toothbrushes have been called the “iPhone of toothbrushes,” due in part to their sleek, minimalist redesign of an everyday object. And like the iPhone, Quip is disrupting an established category. The company’s subscription model takes the guesswork out of brush replacement by delivering a new brush head to consumers every three months. This model allows Quip to establish a direct relationship with consumers, thereby avoiding the expensive task of fighting entrenched competitors in traditional retail channels. It also encourages more frequent purchase and solidifies loyalty to the brand in an otherwise commoditized category. Quip can grow by continuing to attract new consumers to their routinized and highly convenient reimagining of dental hygiene products.

Ice Cream
Delivering all the taste of traditional ice cream without the sky-high sugar and calorie content, Halo Top is on a mission to let us have our cake and eat it, too. The additional 6g of protein isn’t bad, either. Unlike most ice creams, Halo Top doesn’t hide its nutritional panel – rather, it boldly declares “Only 240 calories PER PINT” on the front of the tub, providing a clear value add for calorie-conscious consumers. The “Per Pint” label also gives consumers permission to eat the entire tub in one sitting. Retail sales of the brand have exploded as a result of the clear value proposition and the brand’s social media presence and “buzz-worthiness” among influencer consumers.

Coffee Shot

Coffee and new parenthood go hand in hand, as any sleep-deprived parent will tell you. It’s no surprise then, that Neel Premukar founded Forto Coffee after having his twin daughters and thirsting for clean, on-the-go energy. These 2-ounce coffee shots are Organic, Fair-Trade Certified and lack the artificial ingredients found in most traditional energy drinks. Their shelf stable, portable packaging (and caffeine content equal to 2x a regular cup of coffee!) makes them truly stand out from other caffeinated options. Forto gained credibility and awareness in the military supply channel, then translated its success to c-stores, where it became the #1 selling coffee energy shot. Forto is poised for growth as it gains distribution and builds sales in mainstream channels.

Protein Bar
In the über-crowded nutrition bar category, RXBAR has found a way to stand out using packaging that highlights its real food credentials. The front of each bar is devoted to its nutritional label, which quantifies exactly how much real food is included (e.g., a blueberry bar includes “3 egg whites,” “9 almonds,” and “No B.S.” The strong nutritional profile (<7 ingredients per bar and 12g of protein) coupled with product distribution in influencer channels such as gyms and fitness studios, has led to triple-digit year-over-year revenue growth for the brand, and makes it one to watch in a popular and already crowded category.

Eggs & Dairy

Vital Farms is going beyond cage-free to create a new standard for poultry’s quality of life. Their pasture-raised chickens have more than 100 square feet of outdoor space in which to roam, compared to cage-free chickens, who typically live within ~1 square foot. What started as a small brand in farmer’s markets has quickly scaled into lines of organic, non-GMO, and certified humane eggs and butter that are available in both Natural and Mainstream retailers across the country (Whole Foods, Kroger, Target, and Safeway). The brand’s distinct, colorful packaging helps it stand out at shelf and communicates its premium position in the category.

Detergent / Gear Guard
With the growth of “athleisure” clothing, the fabrics we wear have changed, but the detergents we use to wash them haven’t. Traditional detergents are not formulated to keep synthetic materials odor-free, leaving synthetic workout clothing smelling…well, as if it hasn’t been washed. Enter Hex. This line of laundry products pledges to repair damage caused by mainstream detergents, eliminate existing odors in synthetic materials, and prevent new ones from forming. With this “fresh” new benefit, Hex is bringing a Millennial-focused solution to the large and stale fabric care category currently dominated by Gen Y brands.

Pea Protein Milk

First there was soy milk. Then came almond milk, which paved the way for a growing (yet high-churn) category of non-dairy milk alternatives. Hoping to carve out a more permanent space in the category is Ripple pea milk, positioned at the intersection of two consumer mega trends: plant-based dairy alternatives and legume-based protein sources. With more protein than almond milk and fewer calories and sugar than conventional dairy milk, this pea-based milk offers the best of both worlds. And because peas are not a “Big 8” allergen (unlike soy and almond), Ripple is making dairy alternatives more accessible for more people. Ripple continues to increase distribution in mainstream channels and is forecasted to be in 6,000 stores by the end of 2017.

Lupini Snacking Beans

Try this one out at your next cocktail party: the Lupini bean, while new to most American palettes, provides 50% more protein than a chickpea and 80% fewer calories than an almond. Brami is rapidly making this bona fide superfood more accessible with fun flavors and approachable, convenient packaging. And thanks to the Millennial-driven ‘snackification’ of meal occasions, fruit and vegetable-based snacking have become a destination among progressive retail outlets. With credible nutritionals and macro trend tailwinds, Brami is poised to make an impact in the healthy snacking category.

Gum & Mints

Simply Gum is challenging the large gum category with its simple promise to provide consumers with 100% Natural gum, free from artificial flavors and other “bad” ingredients found in traditional gum bases such as plastics, aspartame and other synthetics. The brand’s minimalist packaging stands out on shelf and helps communicate its commitment to clean ingredients. Simply Gum is already making an impact on the counters of natural and influencer retailers, and is preparing to build on its success with the launch of a Simply Mint product line.


As changes in cannabinoid regulations and usage sweep the nation, brands stand to grow by figuring out how to successfully package and brand related ingredients for use across categories ranging from health and beauty to food. One such brand is Apothecanna, a health and beauty brand that infuses lotions and sprays with CBD oil, a hemp extract and all-natural, non-psychoactive concentrate that delivers therapeutic benefits, without the euphoria in a traditional “high.” Apothecanna, which touts benefits like relief from inflammation and improved circulation, has used premium, vibrant packaging and positive publicity in influential media to stand out in this developing market.