Brand extensions over true innovation: Overview
- Line extensions offer low-risk growth through familiar brands and formats
- Manufacturers favour extensions as volume growth remains under pressure
- Strong extensions create new consumption occasions rather than simply introducing another flavour
- Excessive extensions risk diluting brand equity and consumer trust
- Brands succeed when extensions support innovation rather than replace it
From new flavours to added functional ingredients, food and beverage brands are embracing product extensions. But when does innovation become imitation?
As line extensions multiply, questions are growing over whether brands are sacrificing genuine breakthrough innovation for safer bets.
And, as shelves become crowded with lookalike launches, consumers are starting to question whether anything is truly new.
Why do brands extend?
Line extensions represent one of the fastest, low-risk routes to growth for many food and beverage brands.
Launching a new flavour or format allows brands to generate excitement, secure additional shelf space and attract new consumers, all while leveraging the recognition of an existing name.
Range extensions also help brands tap into emerging consumer trends without the cost and risk of creating entirely new brands.
From protein-enriched snacks and functional beverages to premium indulgence and seasonal flavours, line extensions offer a way to respond quickly to changing consumer preferences while remaining within familiar territory.
Added to this, developing a new variant is typically faster, cheaper and less risky than creating an entirely new brand. Existing production lines, ingredients and distribution networks can often be used with minimal changes, reducing development costs and speeding up time to market.
Moreover, they’re often perceived as a safer bet for retailers, who are often more willing to stock a new variant of a known brand over an entirely new proposition.
The question is whether brands are using line extensions to complement real innovation or replace it.
The extension dilemma
According to Henry Farr, valuation director at Brand Finance, new product development in food and beverage has “clearly tipped towards low-risk variants”.
The reason for this? A drop in volume sales.
“For the past two years, growth across food and drink has come mainly from price rather than product innovation,” he explains. “As inflation eases, brands need to demonstrate where long-term growth will come from, and line extensions are an obvious next step – quick to launch, easy to list, and able to build on existing brand awareness.”
But for many of the industry’s biggest players, the issue isn’t awareness at all. It’s preference.
“Twix is known by 94% of consumers, yet only 13% name it as their preferred brand,” says Farr. “Similarly, Oreo and KitKat are recognised by around 96% of consumers, but only around one in five names either as their preferred brand. Launching another flavour under an already familiar name does little to close that gap.”
The challenge, then, is not getting consumers to recognise a brand, but giving them a compelling reason to choose it. That, says Farr, is where meaningful innovation separates itself from a simple line extension.
Innovation or imitation?
The real test of a line extension is whether it adds something meaningful. As Farr puts it, the strongest launches “create a new occasion that fits the brand, rather than simply filling a promotional slot with another flavour”.
He points to Lindt’s Dubai Style Chocolate as an example of innovation done well. The product capitalised on a social media trend while remaining true to the chocolate maker’s premium positioning, and subsequently expanded into a wider range of formats.
By contrast, Farr warns against what he describes as the “flavour treadmill”, where brands churn out limited editions that create initial buzz but fail to drive repeat purchases.
“Oreo has launched collaborations with everyone from Coca-Cola to K-Pop group BTS, yet Mondelēz reports that the brand’s growth has slowed to mid-single digits, while its brand strength index has fallen by almost 15 points since 2024.”
And while brand extensions are often seen as the safe bet in new product development, they carry significant challenges.
The extension risk
The benefits of line extensions are clear, but so are the risks.
Most notably, brand equity can suffer when extensions move beyond their core strengths.
“Dilution starts when an extension moves beyond what consumers believe a brand does well, or when the core product and its promise are weakened in the pursuit of something new,” says Farr.
A simple test for this, he says, is whether an extension adds revenue while familiarity, consideration and preference fall. In this case, the brand is spending its equity rather than building it.
This is particularly important at a time when shoppers are already questioning value. Brands that use extensions to distract from shrinking packs, reformulation or price increases risk damaging long-term consumer trust.
In other words, short-term sales gains may come at the expense of long-term brand health.
Four ingredients for a successful extension
According to Farr, the strongest extensions share four common characteristics.
- Holds credibility: Consumers believe the brand belongs in the category
- Meets a growing need: The extension meets a genuine and growing consumer need
- Retains key brand assets: It retains the brand’s core assets and identity
- Commitment: The strongest extensions become growth platforms
Consumers still want extensions
Despite concerns over extension fatigue, consumers continue to search for exciting new products.
“We don’t see fatigue with newness itself,” says Farr. “We see fatigue with paying more for less, and with novelty that doesn’t deliver.”
Lindt’s Dubai Style Chocolate and Mondelēz International’s Toblerone’s Pink Crush demonstrate that consumers are still willing to embrace new concepts when they offer something distinctive and relevant.
Instead, Farr believes brands should be more concerned about value perceptions.
As food inflation continues to pressure household budgets, consumers are becoming more critical of whether new launches genuinely justify their price premium.
And too much choice can become counterproductive.
“Research on choice overload also suggests that beyond a certain point, more options can make shoppers less likely to buy.”
For many manufacturers, however, the appeal of line extensions is easy to understand. In a challenging economic climate, safer bets are often the most attractive ones.
Playing it safe comes with risks
In the short term, line extensions can provide a valuable route to growth, helping manufacturers respond quickly to trends while making the most of established brands.
But as competition intensifies and consumers become more selective, another flavour or limited-edition launch may not be enough to build lasting preference.
Brands that rely too heavily on extensions risk flooding the market with variations that generate attention without creating standout appeal.
In today’s market, playing it safe might be the biggest risk of all.
