Why “Watering Down” a Brand is a Fundamental No-No.

The postulate that “watering down” a brand has long-term affects is generally well understood by smart marketers everywhere. But recently, two brands have been caught up in literally and figuratively watering down their products and consequently, their brands. We’d suggest that the act of watering down a product, or even the suspicion of it, will have very serious and long-term impacts on the business.

The two brands are Maker’s Mark Kentucky Bourbon Whisky and Budweiser. Maker’s Mark announced that they were lowering the alcohol content of their premiere product from 94 proof to 86 proof because demand is exceeding capacity, and consumer testing had indicated that the difference was undetectable. While possibly statistically true, the idea that slowly diluting a product so that the perceived change in the taste profile is negligible could end up taking the teeth out of a product and without ever understanding why. This incremental product thinking almost always gets manufacturers in trouble.

Surprise, surprise. One week after the announcement, there was so much push back from consumers and the press that Maker’s Mark relented, and will not water down their product. The jaded marketer might conclude that this was one big marketing canard, and that Maker’s Mark never intended to water down the product. If you read a lot about this issue, it is clear that it was just one bad decision, and they were smart enough to adjust quickly. Consumers aren’t so dumb, after all. In fact, if Maker’s Mark is smart, they can use the supply shortage to their benefit by creating a new cachet for the brand, and possibly higher pricing.

Budweiser has recently been named in a number of class action lawsuits class about “misleading beer drinkers about the alcohol content of Budweiser and other products”. Testing of their products by White Labs has apparently confirmed that the products were labeled correctly. But the damage has been done. As the press and the lawsuits linger on, consumers will start to question the product quality, whether the claims have merit or not. In other words, they are guilty by assertion. And the deeper they get into explaining why they add water, the bigger the hole. It is time for Anheuser-Busch to jump on this quickly, and definitively, by telling their loyal consumers exactly what is happening and clearly explaining the product quality standards all their brands meet. If they don’t, consumer loyalty will erode.

Coca-Cola did this back in 1985. They attempted to change the formula for Coke and introduce “New Coke”. While they said they had taste tests indicating that New Coke was preferred over the existing Coke and their rival Pepsi, consumers weren’t in agreement. The backlash was extraordinary. Coke gave in to protests and returned to the original formula under the name “Coke Classic”. Even the market leaders can make big mistakes.

What’s at stake here is the importance of product quality. It is the fundamental pillar of a great brand. And when you mess with a foundational element, you are risking it all on what consumers have come to love you for. Sure, products need to be analyzed and improved. But a big part of the equation is the consumer. Not just through quantitative product testing, but also through understanding the softer equities associated with the brand. In a sense, the mandate is to really understand the heart and soul of a brand.

Do not make these kinds of mistakes, no matter what business you are in. Spend time truly understanding the “brand”, not just the product.

Cheers!