The Half Life of a Brand
AI as an own label Human.
I’m on the road this week, and missing the customary space I have to think. It’s proving a good reminder of both how important it is and the privilege that having the time to do it represents. So this week, I’m taking a fragment - an image that intrigued me and expanding it just for the pleasure of doing it.
There has been a lot of chatter this week following the release of ChatGPT5. Depending on stance, it’s either the best thing ever, or a complete fraud, or the beginning of the enshittification of AI as it moves towards an advertising-based model as it seeks to meet the obligations it has to the capital that has created it. (Cory Doctorow’s original post of enshittification is worth a read.) Amid the stürm und drang of the frantic voices of promotion and fear, an idea formed.
AI as an “own label” Human.
One of my first roles in business, in the late 1980s, was as a marketer for a High Street food chain as it, and its brethren, took control of the UK market and gave us the oligopoly we have today, with the top 5 controlling 75% of the market. The Tech Bro’s may get all the attention at the moment, but when it comes to influencing a country’s capabilities in feeding itself, and investing in the source of its food, and the fate of its farmers, the Food Bro’s have astonishing power.
In the 1980s, the food market was all about the major brands, and the job of the buyer was to negotiate the best deals. Private Label was seen as a poor relative, consigned to low-end commodities, and scorned by brand markets. Within 25 years, that had changed completely, and today, well over half the retailer’s income comes from private label, with the fastest growing segment being premium products. The Brands that ruled the roost a few years ago are now shadows of their former selves, owned and enshittified by venture capital and private equity, whilst the retailers themselves are following the same path. It’s telling that the companies, Aldi and Lidl, eating the lunch, so to speak, of the other retailers are privately owned. Autonomy is not to be messed with.
The idea that formed arose from the path the change in retailers' fortunes took as they moved from family-owned businesses - the Cohens, Sainsburys, and Co-operatives - to the Private equity cash cows they have become. It’s uncomfortable, because in my tiny way, I was part of it.
It started with a simple proposition - take products with thin margins and convert them to private label. The brands eliminate marketing overhead and achieve reliable order patterns for ageing fixed assets. The Retailer gets better margins and customer data.
Then, it migrates to new product innovation - retailers form their product development departments, taking advantage of scale, and outsource production to the hollowed out brands’ manufacturing at marginal pricing. Then, the sourcing base is widened whilst the brand’s capabilities for innovation are eroded, making them easily controlled. The retailers move further down the chain to source, determining who grows what, where and how on often survival margins. The Brands that held sway a few short years ago are reduced to being the subject of brand engineering, providing a thin veneer of respectability to food chains that, like wondering how sausages are made, do not reward close scrutiny.
For decades, Kraft and Heinz brands dominated in ketchup, cheese, and packaged mealss, but relied on cost-cutting and efficiency rather than new product development; ignored changing tastes toward fresh, healthy, and premium foods. Between 2015–2019, share prices halved, resulting in a $15.4B write-down in 2019. Earlier this month, Berkshire Hathaway called time on it.
It feels uncomfortably familiar. It is so tempting, particularly when we are busy and under pressure, to outsource to ChatGPT or Claude. It is sold as, and can feel like, a win-win, just like the early days of private label. But, just as major brands are now hollow on the inside, the same fate is on offer to us.
We are all Kraft Heinz unless we’re careful: mastering one recipe but ignoring changing tastes, while our skills stay the same as the world moves on.
AI used with intent offers a real opportunity; used as a convenience, or a short-term convenience or cost gain, it is a Faustian bargain.
I have some inside knowledge of Heinz. What actually happened, at least at first, was the loss of awareness of historical trends. New Heinz products never reached their target within the first two years of release. They were slow-build, word-of-mouth growers. They were given time and space to find a market.
Unaware of this, the marketing team began to operate under two-year success metrics for all new products. The impact was that nothing new could ever succeed. That shifted the focus almost entirely to cost-cutting on existing products.