Steal share or grow the category?
Ahh, the age-old question.
Folks at the Ehrenberg-Bass Institute led by Arry Tanusondjaja, PhD has shed some new light to this question.
They gathered data for 189 brands in 29 CPG categories in the US & UK from 2010-2015.
For the average brand, stealing share was the way to grow. Share changes accounted for 65% of revenue changes, and there was a 97% correlation between the two.
For tiny brands (<10% share), even more revenue growth came from stealing share (73%).
But the tables turned for dominant brands (>40% share). For them, 60% of revenue changes came from category growth. And while the correlation with share change was still strong at 51%, for category growth it was 82%.
This makes sense: if you're small you have lots more share to steal & lots more buyers who can learn about you. If you're dominant, most category buyers already know who you are & there's less share to steal.
Much more detail in the paper, which you should read.
Arry Tanusondjaja , Charles Graham , Steven Dunn , Magda Nenycz-Thiel & Bruce McColl (2021): A rising tide lifts all boats: the role of share and category changes in managing organic sales growth, Journal of Strategic Marketing,