logo
3 Lessons On How To Create A Category Defining Brand

3 Lessons On How To Create A Category Defining Brand

Forbes20-07-2025
Aerial view on green pine forest
There are more than 70,0000 tree species and some of them taste delicious. This bold, contrasting statement is exactly the kind of provocative observation that category-defining brands use to make you stop and think. For business leaders, a whole realm of market possibilities, previously ignored, might suddenly come into focus as the category emerges. Defining a category often involves bringing together two or more established elements in a new context. Think Airbnb, which merged residential space with the lodging industry. Or Netflix with its blend of video rental and digital streaming. Even more recently advances in AI where models like ChatGPT clearly define a new domain for operational and agentic AI, weaving together deep research, language, and reasoning.
Category-defining brands can catapult a business to exponential growth, but there are key elements they must possess for growth to occur. A comprehensive analysis by Kantar BrandZ and Oxford University's Saïd Business School measured 872 brands between 2006-2022 across multiple categories, and found that consumer-perceived difference is the most important brand attribute for outperforming share price. Thus, how can both established and new businesses build products that outshine the market through their distinctiveness? Ben Branson, founder of non-alcoholic spirit brand Seedlip, acquired by Diageo, and now founder of Sylva, recently shared his insights on creating an entirely new category of non-alcoholic drinks crafted from trees.
Identifying Market Gaps
Gathering public data and conducting research into your intended market is only the start. To truly identify gaps, Ben Branson advises diving deeper: engaging in direct conversations, conducting interviews, and seeking out the professionals embedded in adjacent markets. These qualitative markers give clues as to why a gap exists and whether it's truly untapped.
Ben methodically called the top bars and hospitality businesses in the UK, asking what they needed behind the bar for non-alcoholic drinks. He found out that most non-alcoholic options were sweet sodas and juices, which provided plenty of sugary flavors, but no ritual or complexity. Ben's relentless inquiry surfaced a fundamental insight: there was demand for grown-up, complex, non-alcoholic options. Acting on this, Ben built Seedlip, the first distilled non-alcoholic spirit, ushering a new market category. Today, Ben is applying the same obsessive curiosity to his latest venture focused on harnessing the flavors of wood.
Nothing Is Original Everything Is A Remix
For new ideas to catch on, it helps if there's something recognizable for consumers to hold onto. Successful product adoption often hinges on consumers seeing a next logical step from what they already know, it's a familiar framework remixed into something novel.
Consider how Steve Jobs transformed the market with the iPod, not just by making existing MP3 players better, but by reimagining their potential. He famously stated, '1,000 songs in your pocket,' which represented a significant expansion from the capabilities of earlier MP3 players. Later, the iPhone combined the functionalities of a phone, an iPod, and the internet into one groundbreaking device. Similarly, companies like Tesla, Uber, and Lyft have succeeded by educating their audiences about the possibilities of new technologies, helping people understand the connection between existing technologies and the innovations that follow.
Apple CEO Steve Jobs introduces a new online music service along with the new IPOD players and ... More IMusic software. (Photo by Kim Kulish/Corbis via Getty Images)
Create A Unique Story and Experience
Creating a new product or category requires a compelling narrative to engage a curious audience. It is essential to have a clear and persuasive message, Branson adds that is equally important to specify what your product and brand is not. By clearly distinguishing the offering from existing alternatives, the brand is positioned around a unique value proposition that creates its own demand, rather than merely competing within the existing market.
Yet, to carve out and defend a new category, businesses need more than a good idea, you'll need to shape how people think about it. Branson focused relentlessly on every detail: from the design of each product's label to its presentation at events and in stores, and the careful crafting of brand messaging. Together, these elements created a rich, cohesive brand experience that deeply engaged consumers. In order to craft a narrative consider to:
Bringing A Category-Defining Solution To The Market
No genuine innovation arrives without critics. Shaping new consumption habits, whether it's building digital signature confidence with DocuSign or rallying behind skateboarding as a professional sport, it often means challenging the status quo. The path isn't always clear, but commitment to the new category and ongoing consumer education build the credibility and momentum necessary for adoption.
Category creation recognizes what already exists in fragmented form and brings those elements together in ways that feel inevitable in hindsight. The brands that achieve this transformation share three fundamental practices: they listen more deeply than their competitors, they connect familiar concepts in unfamiliar ways, and they persist through the inevitable resistance that accompanies genuine innovation. This approach creates a clear path to meaningful differentiation, exponential growth, and the opportunity to build a pioneer brand in a space that was previously overlooked.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Up 10% in a week, is this FTSE 100 stock set to be the comeback story of 2025?
Up 10% in a week, is this FTSE 100 stock set to be the comeback story of 2025?

Yahoo

time3 days ago

  • Yahoo

Up 10% in a week, is this FTSE 100 stock set to be the comeback story of 2025?

Diageo (LSE:DGE) shares are up 10% since the firm released its full-year earnings on Monday (4 August). I own shares in the FTSE 100 drinks company and I thought the results were… fine. Importantly though, both the firm's results and its forward guidance were ahead of analyst expectations. And a lot of the time, this is what makes share prices move in the short term. The results In the 12 months leading up to 30 June, Diageo reported organic sales growth of 1.7%, while earnings per share fell 0.7% due to increased investments in facilities. Neither of these numbers are particularly inspiring, but both are ahead of what analysts had been expecting. And that's part of the reason the stock's responded positively. The company's forward-looking guidance was much more positive. Diageo expects similar sales growth in 2026, but is looking to make a series of cost cuts, which should lead to 5% profit growth. This is very clearly better than investors had anticipated, but it's worth keeping things in context. And to be fair, the market's doing this – the stock's still down 22% since the start of the year. Not the end Until February, Diageo's official medium-term guidance was for organic revenue growth to be in the region of 6%. And with the firm set to achieve 1.7% again next year, that seems a long way off. Furthermore, while the plan to reduce costs might be a good one, it's not really a strategy for long-term growth. There's only so much cost-cutting to boost profits any business can do. After the Second Battle of El Alamein, Winston Churchill famously said: 'This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning'. That's pretty much my view on Diageo at the moment. The business is a long way off where I might have hoped it would be, but it is – at least – starting to show signs of arresting the decline. Valuation Diageo's a fascinating stock. When things are going well, investors focus on its obvious strengths, but when they start to go wrong, the market sees nothing but threats. The truth – as is often the case – is probably somewhere in the middle. The FTSE 100 firm's brands and scale are a genuine strength, but GLP-1 drugs are also a very real challenge. That means the trick when it comes to buying the stock is to try and work out when investors are pessimistic and focusing on the negatives. That's when the shares trade at attractive prices. Despite the share price climbing 10% in the last week, I think this is still the case. A price-to-earnings (P/E) ratio of 16 is towards the lower end of where the stock has traded over the last five years. The comeback story of 2025? Diageo's set out a clear agenda for growth over the next 12 months. And this was definitely a positive surprise for the stock market, which is why the share price has jumped. I don't think the stock's going to be the comeback story of 2025. But I'm optimistic this might be the year when the company manages to stop the downturn of the last few years. I feel it's worth watching. The post Up 10% in a week, is this FTSE 100 stock set to be the comeback story of 2025? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Stephen Wright has positions in Diageo Plc. The Motley Fool UK has recommended Diageo Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Diageo plc (DEO): A Bull Case Theory
Diageo plc (DEO): A Bull Case Theory

Yahoo

time4 days ago

  • Yahoo

Diageo plc (DEO): A Bull Case Theory

We came across a bullish thesis on Diageo plc on Recital's Substack by Anthony Yiu. In this article, we will summarize the bulls' thesis on DEO. Diageo plc's share was trading at $106.97 as of August 6th. DEO's trailing and forward P/E were 25.30 and 11.63 respectively according to Yahoo Finance. Diageo's turnaround story is increasingly compelling as the company transitions from vague ambition to sharply defined problem-solving under new leadership. Once dogged by low free cash flow, bloated capital expenditure, and distorted incentives that prioritized margin percentages over profitable growth, Diageo's FY2025 results revealed a management team finally confronting root causes. While reported net sales were flat and adjusted EPS declined by 8.6%, free cash flow improved to $2.7 billion, supported by tighter working capital controls. The cultural shift—led by CFO Nik Jhangiani—is central, replacing rigid KPIs with commercial pragmatism and a focus on dollar profit pools rather than percentage margins. This operational reset is translating into concrete financial discipline: capex will fall from 7.7% of sales to a more sustainable mid-single-digit level, adding $200–300 million to FCF. Likewise, investment in maturing stock—a major drag—has begun to normalize, positioning Diageo for a multi-year earnings tailwind as aged inventory is monetized. Meanwhile, cost efficiencies through the 'Accelerate' program and data-driven A&P allocation signal smarter—not leaner—brand investment. Strategy-wise, management is evolving beyond pure premiumization, reinvesting in Guinness with a 30% capacity expansion and broadening reach in tequila and RTDs. Risks remain: poor performance in Asia-Pacific, a dip in U.S. market share in 2H FY25, and broader macro headwinds. Yet, with a credible ~$3 billion FCF target for FY26, Diageo's 15x P/E valuation appears fair, balancing execution risk against turnaround potential. For the first time in years, Diageo is asking the right questions—and laying the groundwork for a financially sound, culturally aware recovery. Previously we covered a on Diageo plc by Jimmy Investor in March 2025, which highlighted the company's premium pricing power, strong margins, and global diversification. The company's stock price has depreciated approximately by 2.1% since our coverage as the thesis didn't play out. The thesis still stands as core brand strength remains intact. Anthony Yiu shares a similar view but emphasizes a leadership-driven turnaround. Diageo plc is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held DEO at the end of the first quarter which was 26 in the previous quarter. While we acknowledge the potential of DEO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock. Disclosure: None. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data

Diageo upgraded to Neutral from Sell at Goldman Sachs
Diageo upgraded to Neutral from Sell at Goldman Sachs

Business Insider

time5 days ago

  • Business Insider

Diageo upgraded to Neutral from Sell at Goldman Sachs

Goldman Sachs analyst Olivier Nicolai upgraded Diageo (DEO) to Neutral from Sell with a 2,000 GBp price target The firm sees limited downside risk in FY26, as new management steps up cost saving to support best-in-class margins and stabilize earnings, albeit visibility remains low an the outlook is based on a H2 recovery. Cost savings should support margins in FY26, although the top line needs to improve from FY27 for margin progression to continue, the analyst says, adding that the firm expects a positive step-up in free cash flow. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store