Drea Knufken
This is a blog post by Drea Knufken.
Economic downturns aren’t only about damage. Throughout recent history, opportunistic companies have taken advantage of downturns to launch brands that enjoyed success for decades to come. Using timing and ingenuity, these 9 successful brands turned downturns into windfalls.
Rice Krispies
More than 75 years later, Kellogg’s Great Depression-era brand remains a hit.
When the Great Depression hit, Post cereal cut back heavily on ads in order to conserve money. Kellogg, Post’s main competitor, did the opposite. The company poured money into ad campaigns, creating a new cereal called Rice Krispies. Snap, Crackle, and Pop helped boost Post’s profits by about 30% by 1933, according to the New Yorker’s James Surowiecki. Kellogg remains on top to this day.
Plymouth
Chrysler overtook Ford as the country’s second-biggest automaker in 1933, thanks to Plymouth cars.
Plymouth, launched as a separate brand 1929, was Chrysler’s first foray into the low-priced market. The cars’ crowd-pleasing features, which included hydraulic shock absorbers, helped it become one of the Great Depression’s only successful car brands.
Miracle Whip
Kraft’s cheaper version of mayonnaise become an instant hit during the Great Depression.
Max Crossett must be rolling in his grave. The Washington state-based inventor of Crossett’s X-tra Fine Salad Dressing sold brand rights to Kraft in 1931 for $300. Kraft rebranded the stuff as Miracle Whip, then sold it as a cheap mayonnaise alternative. It became the nation’s bestselling dressing in only six months, writes the New Yorker’s Surowiecki.
iPod
Apple launched one of its flagship products during the 2001 recession.
Steve Jobs unveiled the iPod in October 2001, when the country was still reeling from the September 11 attacks. It’s now one of the decade’s biggest success stories. By 2005, Apple owned more than a quarter of the worldwide mp3 market. In April 2007, Apple announced it had sold 100 million iPods. Apple is on fire, thanks to its penchant to innovate in all kinds of economic climates.
FedEx
Federal Express launched just six months before the 1973 oil crisis, establishing a brand new industry amidst economic turmoil.
FedEx began with 14 small planes at the Memphis International Airport. Founder Frederick W. Smith hoped to address a market need for 1-2 day package and freight delivery, which at the time was very difficult. His plan worked. By 1975, the company became the number one carrier of high-priority goods and set a new standard for the industry it established, according to FedEx’s website. Today, the company’s couriers log about 2.5 million miles a day through seven global operating companies.
Healthy Choice
ConAgra’s low sodium, lowfat frozen meals became a hit during the early 1990s recession.
Former ConAgra CEO Mike Harper had a rather auspicious heart attack in 1989. He came up with Healthy Choice, a new line of frozen meals for health-conscious consumers, after reevaluating his own eating habits. The brand launched just in time for the 1989-92 recession. Sales reached $350 million, with 10% market share, in under three years, according to this BNet article. Today, Healthy Choice is successful enough to have Julia Dreyfuss as a spokesperson.
Hyundai
By providing the best warranties and guarantees in the industry, Hyundai is becoming a prominent US auto brand.
Previously plagued by quality issues, Hyundai righted its reputation by providing a 10-year, 100,000-mile warranty, previously unheard of in the auto industry. In 2008, it created the popular Hyundai Assurance program, which lets customers return their cars if they lose their jobs. The plan worked. The January, Hyundai’s US sales were up 14% compared to last year, according to Knowledge@Wharton. Between January-April of this year, its market share rose 0.7%. Not bad for an industry where double-digit declines have become commonplace.
Scott Paper Company
The Scott Paper Company’s napkins and paper towels became household staples, even though many products launched during economic downturns.
The Scott Paper Company (now part of Kimberly Clark) practically mastered the art of launching brands during recessions. Founded at the head of the 1879 US recession, Scott introduced the nation’s kitchens to paper towels in 1931. By 1939, it was the best-selling brand in the country, according to the Scott website. The company launched pastel-colored products and jumbo-sized paper tower rolls just in time for the 1958 recession. It remains a household name today, although one wonders how many more ridges and plies a company can create to mark up toilet paper.
9. Penguin Publishing
Quality books for cheap: A business model that endures.
In 1935, publisher Allen Lane came up with the idea to sell good books for rock-bottom prices. Penguin Publishing was the result. Lane made sure that his cheap, quality books found their way not only to bookshops, but to general stores, corner stores, and railways as well.
Before Penguin, paperback books contained gaudy, unliterary content. With his new model, Lane changed the game. Less than a year after launch, Penguin had printed one million paperbacks. Today, Penguin publishes globally through owner Pearson PLC, a London-based media conglomerate.
Drea Knufken is a freelance writer, editor, ghostwriter and content strategist. Her work has appeared in national publications including WIRED, Computerworld, National Geographic, Minyanville, Backpacker Magazine and others. For more information, please visit www.DreaKnufken.com. You can also find Drea via her blog, Facebook, LinkedIn and Twitter.
