Nixing the Product Niche

One oft-heard company strategy in hard economic times is focusing only on core brands and axing the niche brands from the product portfolio. However, those who do not vet those niche markets may be throwing away a slice of the future.

Take the soy beverage category for instance. A recent report discussed market research showing that the category grew by 19.3% last year. U.S. retail sales went from $545 million in 2001 to $676 million in 2002—a 24% increase—followed by a 30% increase in 2003. In 2004, U.S. sales of soymilk and other dairy alternatives passed $1 billion, and in 2007 they reached nearly $1.7 billion. They’ve grown from a health-food-store specialty to a fixture in mainstream groceries with a respectable number of facings on the shelf.

The moral of the story? While those niche products might mean beans in today’s market, if you pick the right ones, and feed and nurture them, they just might have the potential to grow into something bigger.

-Lynn A. Kuntz