Brand Architecture Amid Economic Uncertainty: CPG Lessons

Economic uncertainty presents a complex challenge for consumer goods companies

Economic uncertainty presents a complex challenge for consumer goods companies, particularly for established and emerging brands navigating this space. Shifting consumer behaviours, volatile supply chains, and intense competition demand strategic agility. Now that we are a quarter of the way through 2025, brands are keenly aware of the need to adapt.

For CPG brands, effectively weathering this turbulence hinges on a robust and adaptable brand architecture. It’s not merely about organising logos; it’s a fundamental framework that dictates how brands within a portfolio relate to each other, to the parent company, and crucially, to the consumer during times of financial pressure.

A well-defined brand architecture provides clarity, reduces market confusion, and allows companies to pivot quickly in response to changing conditions. It enables strategic resource allocation, ensuring investment flows to the brands best positioned to succeed. This structure becomes particularly vital when budgets tighten and every marketing pound must deliver maximum impact.

Understanding how to leverage brand architecture can transform uncertainty from a threat into an opportunity for growth and resilience.

Restructuring Brand Portfolios for Economic Resilience

Economic headwinds necessitate a critical evaluation of the entire brand portfolio. For many CPGs, this isn’t typically about multi-billion-pound mergers and acquisitions, though larger trends show 71% of CEOs still planning M&A as a growth strategy [1]. Instead, it’s about strategic rationalisation. Which brands are essential? Which offer growth potential even in a downturn? And which might be a drain on precious resources? This strategic restructuring is a proactive measure to build resilience [1].

For a brand with a diverse portfolio, this might mean identifying underperforming product lines that consume disproportionate marketing spend or operational effort. Divesting or discontinuing these non-core assets allows focus on more profitable and strategically aligned areas [1].

Alternatively, brand revitalisation can breathe new life into existing assets by refreshing image, product offerings, or marketing to align with current consumer preferences without the need for large-scale acquisitions [1]. It’s about creating a leaner, more focused portfolio that can respond nimbly to market shifts.

Consider a mid-sized CPG firm in North America that faced declining market share and profitability. By rationalising its brand portfolio, divesting underperforming brands and focusing on high-return products, the company saw a significant increase in profitability and reduced operational costs. This illustrates how strategic pruning can enhance market competitiveness.

To identify which brands to prune, companies might assess factors like market share trajectory, profitability margins, alignment with core business strategy, and resource consumption.

Measuring the effectiveness of such rationalisation requires a granular approach. CPG brands can track KPIs like sales growth for remaining brands, market share shifts, and changes in profit margins. Monitoring SKU reduction is also key to simplifying inventory and reducing complexity.

Accessible analytics tools like Google Analytics, Mixpanel, HubSpot Analytics, and Facebook Pixel can help track consumer behaviour and sales trends to assess the impact.

Tiered Pricing Strategies Within Brand Architecture

Consumer spending patterns inevitably shift when economic pressures mount. Value becomes a primary driver for many shoppers. CPG companies must implement tiered pricing strategies across their brand portfolios to capture value-conscious consumers while retaining premium segments [12].

The rise of private-label products, now accounting for nearly 20% of U.S. grocery spend, underscores this shift towards value [10]. This statistic demonstrates the consumer’s willingness to trade down for more affordable options.

For a CPG brand, this doesn’t necessarily mean launching a full private-label line. It could involve clearly defining economy, mid-tier, and premium options within existing product families or developing a specific value-focused sub-brand [12]. Each tier needs a distinct value proposition.

• Economy Tier: Focuses on essential functionality and competitive pricing.
• Mid-Tier: Balances quality and features with accessible pricing.
• Premium Tier: Emphasises superior quality, unique benefits, or aspirational positioning.

For instance, a food manufacturer dealing with rising raw material costs introduced a premium product line to cater to consumers willing to pay more for higher quality or organic options. This strategy improved profit margins and led to a notable increase in overall revenue.

This stratified approach allows companies to maintain market share across different consumer segments and economic cycles, protecting overall profitability [12]. Evaluating key performance indicators like market share per tier, sales growth, and customer segmentation penetration can help gauge the effectiveness of this approach.

Building on that thought, beyond pricing tiers, developing targeted sub-brands offers another strategic approach to maintaining market share during economic fluctuations.

Sub-brand Development to Maintain Market Share

Developing targeted sub-brands offers CPG companies a flexible way to maintain or grow market share during economic downturns. Sub-brands can address specific, emerging consumer needs without diluting the equity of the master brand [13].

Consider Shein’s launch of Musera, a trend-based sub-brand in the UK [13]. By creating a sub-brand focused on regional trends, Shein demonstrates how targeted extensions can respond nimbly to market shifts while benefiting from the parent company’s infrastructure.

For CPGs, sub-brand development can be a lower-risk way to experiment with different value propositions or price points, perhaps targeting specific demographics like Gen Z who value sustainability and authenticity [14]. Developing sub-brands focused on eco-friendly packaging or leveraging digital platforms like TikTok can resonate deeply with this audience [14].

It provides diversification and mitigates risk compared to launching under the main brand name [13]. Our analysis indicates a significant increase in geo-specific sub-brand launches, driven by AI-powered cultural trend forecasting [7, 13]. This suggests a future where hyper-localised sub-brand ecosystems could dominate market share retention.

Value-Driven Brand Positioning in Uncertain Markets

Economic uncertainty sharpens consumer focus on value. CPG companies must reconsider how their brands communicate their value propositions, ensuring clarity and relevance [15]. Brand architecture plays a key role in aligning this messaging across the portfolio.

The slowdown in the beauty and personal care industry, with consumers favouring clinical positioning and smarter purchases, illustrates this trend [15]. Consumers are moving towards pragmatic decisions based on tangible benefits and efficacy.

For a brand, this means recalibrating brand positioning to emphasise functional value, scientific backing, or cost-effectiveness [15]. Adjusting brand architecture ensures each brand within the portfolio has a clear, value-driven positioning that resonates with increasingly discerning consumers.

This might involve highlighting quality-to-price ratio, durability, or specific benefits that improve a consumer’s life [16]. Transparent communication about sourcing and practices can also build trust and enhance perceived value, especially for price-sensitive consumers [16].

Walmart, for example, has strategically shifted its focus towards health and value-consciousness by offering Mediterranean-inspired products, leveraging private-label products to reinvest in its infrastructure and offer premium wellness assortments while maintaining its low-price promise. This positions Walmart as a primary destination for health-conscious consumers and insulates it from competition.

Independent retail stores also offer a strategic advantage for CPG brands seeking early wins and deep consumer engagement, particularly in close-knit communities where trust and shared values drive purchasing decisions. Achieving successful rotation in neighbourhood markets can validate a product and build confidence, creating a reputation rooted in authenticity and resilience.

Experiential marketing, which creates engaging and memorable brand experiences, is particularly effective in competitive markets, fostering a sense of ownership and value among consumers. Brands that excel in this area, such as Apple and Nike, enhance customer loyalty and drive revenue.

By applying the brand experience to all aspects of the customer journey, companies can significantly boost customer loyalty and long-term engagement.

British manufacturers are redefining value-led production through small-batch, proudly local manufacturing, responding to policy uncertainty, rising costs, and shifting consumer habits. Focusing on the ‘Made in the UK’ label differentiates them and aligns with consumer preferences for locally produced goods.

Samsung has positioned itself as a global leader by designing products that elevate lifestyles through form and function, focusing on innovation in design to enhance environments and reflect personal style. This focus on lifestyle enhancement is a key component of Samsung’s value-driven positioning.

How effectively does your current brand architecture communicate value in today’s price-sensitive market? Can your portfolio quickly adapt to changing consumer priorities? Does your pricing strategy accommodate different value perceptions?