Building Antifragile Brand Portfolios through Continuous Innovation 

Key takeaways 

• Introduction to Antifragility: Antifragility is necessary for brand portfolio development, as it can turn market volatility into a competitive advantage. 
• Lean Startup Methodology: Eric Ries' Lean Startup principles—Build, Measure, Learn—are essential for developing antifragile brands through rapid iteration and continuous learning and elevate the concept of mere agility. 
• Market Adaptation and Consumer Engagement: Antifragility requires brand guardians to evolve product portfolios continuously so that they keep pace with dynamic consumer preferences and stay top of mind via new/revised offerings. 
• Strategic Innovation and Partnerships: Strategic partnerships and technology deployment play a vital role in driving innovation and achieving long-term brand success through product testing and development programs. 

Antifragile portfolios – better than (just) advertising?  

In an FMCG marketplace characterised by flux, brands that thrive are those equipped not just to withstand change, but to capitalize on it. Mighty products have risen, and others have fallen over the last decades, but the winning ones have adapted to the times to remain relevant. However, with a few exceptions of challenger brands that successfully created new categories and capitalized on new trends (like Innocent or Liquid Death), and of some who have reformulated or extended their lines and portfolios, the landscape of global market leaders remains fairly consistent.  

This whitepaper introduces the concept of antifragility to brand and portfolio management—a potent strategy for brands aiming to turn volatility into a competitive advantage. By delving into theories from leading thinkers like Nassim Nicholas Taleb and Byron Sharp, and incorporating product development methodologies like Eric Rye’s Lean Startup, this paper outlines a transformative approach for continuous brand evolution. Central to this approach is the idea that brands can enhance their market presence and innovate by continuously investing in concept-product consumer testing, and by deploying changes in their brand and product portfolios regularly. This allows them to not just iterate, but to discover and refine the products with the best chances of succeeding. By constantly introducing new products or formulations that resonate with evolving consumer preferences, brands can effectively utilize all the marketing "Ps"—product, price, placement, and promotion, as there will always be new products with new marketing initiatives around them that take up space in the stores and use a new promotion to enter consumers’ awareness, thus boosting brand equity. To explore how this can be done effectively, we will delve deeper into antifragility for FMCG products and portfolios, using the Lean Startup methodology for product development, and into how these can transform the way businesses innovate.   

Understanding Antifragility in Business  

The evolution of brand development strategies can be thought of as an increasing spectrum as follows: resilience-robustness-antifragility.  

Resilience consists of maintaining market share by consistently delivering value even in the face of economic downturns through consistent buyers, while robustness is the ability of brands to endure and still perform well under adversity by leveraging well-established mechanisms like advertising, pricing strategies, and strategic placement (the marketing Ps). Byron Sharp even highlights that as brands reduce their advertising and product development efforts, the impacts may not be immediately apparent, but typically manifests over the next years, demonstrating a robustness built on past strengths (Sharp, 2010). Further, Scott Galloway suggests that many of today's big brands are reliant on an advertising legacy that can only decay over time. Their dominance - he suggests - is in peril (Galloway, 2017). This robustness of using legacy advertising effects and the marketing Ps can keep a brand constant only for so long, and once the system starts its downturn, it is already too late to stop it, as Nassim Taleb suggests from observing robust mechanisms (Taleb, 2012). However, the most advanced and effective adaptation is not robustness, which is still vulnerable. The best adaptation is to not withstand adversity, but to change along with it and become antifragile. This concept goes beyond mere survival or resilience; it is about brands, products, and companies that do not just wait out chaos, but that benefit from it and from shifting preferences, because they evolve with them.   

Antifragility describes systems that improve as a result of challenges and stress, similar to natural phenomena in biology where stress strengthens human genes over time, or economic mechanisms where free market volatility fosters stronger, more competitive entities which adapt while some weaker ones disappear. For brands, particularly in the FMCG sector, antifragility is manifested through a readiness to subject products or entire lines to rigorous testing and real-world trials that may yield suboptimal results initially, and being ready to quickly make relevant changes based on tracked results. This strategic exposure to risk is not merely about resilience but is crucial for garnering deep insights that drive future innovations. It’s about transforming potential failures into springboards for growth, ensuring that a brand's portfolio is continuously optimized and responsive to evolving market dynamics.  

The process of cultivating antifragility involves two critical phases: quick testing and initial iterations, followed by strategic launches and even more iterations. This approach demands robust data collection and analysis to inform decision-making, turning every setback into a learning opportunity and every challenge into a chance to advance. While these principles of testing and monitoring are well recognized in the industry, they are often underestimated in terms of their potential to revolutionize product development and return on investment. 

Reframing failure as innovation accounting  

Viewing each product’s suboptimal performance, downward trend or even failure (versus targeted performance) not just as a setback but as a vital learning step towards refining products and portfolios and ultimately enhancing brand success marks the essence of a truly antifragile brand. This is something Eric Ryes strategically describes as innovation accounting – money spent learning is not wasted money, even if an experiment failed (Ries, 2011).  

Perhaps when sales are down what is needed is a strategic product or portfolio change, rather than a marketing campaign on the same product. With the rise of the heavily targeted ads for consumers and the digital media significantly influencing consumer trends, especially in the younger generations, it is more important than ever to always keep consumers engaged through constant innovation. Most digital trends are focused on new product launches, rather than on marketing campaigns, making that domain disproportionately accessible to new portfolio additions. However, if the products do not deliver on the long-term proposition or cannot adapt to shifting consumer preferences and expectations, then they will not be integrated into consumers’ repertoires and will ultimately fail. For example, the Prime sports drink has reached a large audience and has had a very successful launch due to its ‘influencer’ owners and media presence (mostly YouTube, TikTok, Instagram), but has failed to deliver and be adopted into consumers repertoires, resulting in an immediate immense drop in sales after the initial hype subsided. There is a growing number of example that some hyped brands that enter the mainstream are ultimately doomed because consumers perceive them to be gimmicks or because expectations are higher and difficult to meet. Much better to build  awareness and trial more slowly, and to build time to adapt to the consumer expectations. On the other hand, when Lotus Biscoff, a classic biscuit brand, extended into spreads it opened up so many additional consumption opportunities that made it into viral influencer recipes on social media, delivering on the proposition and people adopted it. The difference? Product fit with consumer expectations (Thompson & Coates, 2021). In the next part, we will explore how to make sure a launch has higher chances of being Biscoff, not Prime.  

The Lean Startup Methodology: A Vehicle for achieving Antifragility  

It is well-established that agile product development is essential – rapid development with an iterative approach, reduced waste, and quicker speed to market and ultimately ROI. However, achieving true antifragility requires this approach to be applied with intent across the entire portfolio, and on aggregate as well as for individual products. Eric Ryes’ Lean Startup methodology, advocating the "Build, Measure, Learn" model is ideally suited to guide this process through short iteration cycles and strategic releases. Even if initially designed for (tech) B2C startups, it can be learned and applied across all consumer products, with some adaptations.  

Build. This methodology promotes an iterative approach, allowing brands to start small, test rigorously, and adapt quickly. Such agility minimizes the costs associated with failures while maximizing learning from every market interaction. As Sam Altman said (at Y Combinator back then, before OpenAI) – the best company is the one that has the quickest learning loops and the smallest iteration cycles (Altman, 2014). Companies should focus on building and testing as soon as possible the smallest possible key part of their product. It could be an idea, then a concept, then initial formulations, then concept-product fit, then benchmarking. If steps are skipped and only one of the later tests are done, but one previous step was wrong, there is virtually no way to pick the right data from the noise and identify what is wrong; furthermore, fixing it at a later stage means waste (time, money, work, etc.). And waste is the enemy of agility. Thus small testing loops and rapid iterations with constant learning as an engine for product development is the only safe way to achieve a good product-market fit.  

Measure. Once the products are good enough to hit the market, they encounter complex real-world conditions where datasets capture not just direct consumer feedback but also broader market forces, trends, and consumer behaviors. Whilst there are ways of accurately predicting sales data for year 1 or even year 2 (albeit with a good in-market benchmark and granular distribution and awareness marketing data), shifts can always happen and everything above year 2 is guessing, not predicting. In-market consumer behaviours and responses are more complex feedback loops that cannot be replicated in test environments. They naturally give more accurate market data to a brand, but take more time to track, require more capacity to analyze, and are also influenced by noise. Analyzing both the initial testing data and also these comprehensive in-market trends enables brand managers to understand more than just preferences - they can glean insights into behaviors, seasonal trends, and competitive dynamics, and how these affect their product performance. However, the in-market data is so indirect that it cannot provide more than hypotheses, so, to learn, testing is needed, again. This is the massive downside of traditional FMCG, which needs data collecting, compared to tech where UX data tells the story in real time.  

Learn. In dynamic sectors such as FMCG, where consumer preferences are ever-changing, the ability to pivot rapidly based on solid data and feedback is crucial. Market exposure (and especially initial market exposure for new products) should not be treated as the test that defines success or failure after one or two years, but rather it should inform continuous refinement. After assimilating the market data, brands can form hypotheses, implement targeted iterative improvements, test and validate them, and keep iterating the concept and product, ensuring that the product portfolio not only responds to current consumer needs but is also positioned to anticipate and adapt to future changes. Further, multiple variations of the product or line extensions can be launched, catering to multiple consumer needs, as long as it fits the overall brand proposition.  

Antifragility in action 

One example is how Desperados can have different portfolio variations based on country, and especially how their limited summer editions vary and yet are still recurrently consumed in many countries (lighter, smaller, fruity). Once the initial fit has been properly achieved, brands can start extending the line to fit multiple consumption occasions – here we can go back to the successful Biscoff example extending into spreads (I do admit I baked the Biscoff spread cheesecake with a Biscoff biscuit base more than once). This cycle of testing, launching, refining and extending underpins a strategy that keeps brands responsive, competitive, and ultimately antifragile, because with each emerging market trend, they will be ready to respond, adapt, and capitalize on them. One great example of achieving this is Alpro which started riding the no-dairy wave and claimed the space, then extended its portfolio to desserts and barista milk to increase consumption occasions, and has later broke into healthy food with high protein content (capitalising on the health conscious fitness trend), keeping their portfolio evolving with the market, being the number one contender in plant-based milk, yogurt, desserts across key markets in Europe.   

Last, exposing yourself to calculated risks and learning from them opens the door to potential big discoveries (statistical black swans, see Taleb 2007) while no testing and linear progression tends to lead to downfall. Money and time spent experimenting and learning is money spent futureproofing. Even though this mindset has started to grow within big multinational companies, there are still systems to be put in place for innovation to take place at its full potential (Ries, 2017), but some great initiatives are already leading the way – such as Nestle's R&D accelerator.  

  
Driving Consumer Engagement and Brand Success through Innovation 

In the realm of brand strategy, effective marketing and consumer engagement are pivotal, but the crux lies in aligning the concept with the product. This fit ensures immediate consumer satisfaction and guarantees long-term success by resonating deeply with the audience's expectations. Every facet of the product experience – including packaging, positioning, and overall presentation – must contribute to a cohesive, satisfying, and rewarding consumer journey.  

As the market evolves, it is witnessing the start of a transition to more informed and intentional consumers who operate under the dual-process theory of thinking—System 1, which is fast, intuitive, and emotional, but also System 2, which is slower, deliberate, and logical (Kahneman, 2011). To succeed, brands must appeal to both systems by providing attractive, immediate sensory experiences for System 1, and demonstrating product utility and value over time for System 2. This idea of the alignment of the systems is not new, and even though it has been studied in other domains (Evans & Stanovich, 2013), it is not yet the status quo for NPD processes. Within product testing, this is called the Dual Aspects of Reward Theory, and it puts emphasis on making sure that products deliver both immediate pleasure and long-term emotional satisfaction to the consumer. This is the true test of superiority for brands and products, and that which will deliver long term success for innovation (Thompson & Coates 2021). Thus, product experience is crucial, and extensive advertising is nothing without offering a superior product to consumers at the end of it. Just with a concept-product-market fit and a complementary advertising (physical and media), a brand can truly achieve its potential and stay ahead. For brands with well-received products, increasing advertising might lead to diminishing returns compared to introducing product variations that keep consumers engaged. These variations ensure the product remains relevant and appealing in a competitive market, aligning with evolving consumer preferences without relying solely on advertising.  

In all honesty, this reminds of a great case study from Byron Sharp’s book which my Psychology of Marketing Professor put to us in my Economic Psychology MSc course – there was a graph showing that showed the market share of two toothpaste brands (Colgate and … not Colgate), followed by some pages of past market insights (Sharp, 2016). The problem posed was – what could the brand manager do to improve the market share, and how? Everyone started suggesting more insights research to understand consumer perceptions and inform future positioning and campaigns, or more marketing budget to reach more people, or even that consumers need more loyalty (forgive us, we were young…). As if Colgate did not think about those and they needed us. But all were wrong. The answer was, of course, that the product has already been able to achieve its full market potential with the current formulation. What could the manager do, then? Build a better product, or launch a new one, essentially. Imagine our surprise when we found out, in a marketing course, that the insights were suggesting that the marketing department could not do anything about it.   

  
Driving Innovation through strategic programs & partnerships 

There is one counterargument that can be (and quite often is) made against the presented approach – that investing in innovation is expensive and it proves difficult to show a direct ROI between testing and experimenting and success. Whilst I completely acknowledge that innovation takes time, it only needs to work once out of 10, 50, or even 100 times (a statistical black swan) and that discovery may pay for the whole program and for all the unsuccessful tries before that. In the meantime, the brand can be constantly engaging consumers and delivering on its proposition, or at least it will learn what its consumers do not want, which is still valuable. If testing programs and large-scale testing and iterating techniques seem costly and time-consuming, we need to look no further than the acquisition and valuation of some challenger brands such as Fulfil, acquired by Ferrero (valued 150mil. EUR) or Innocent (acquired by Coca Cola for 100mil. EUR+). Buying successful portfolios is never cheap, and it certainly is something that is not always accessible. Hence, trying to find the concept-product-market fit and build the brand may be a potential alternative that could be worth the investment.  

Through the approach laid out within this article, the focus shifts from relying on a single hero SKU and working on many marketing campaigns and simply extending the consumption occasions around it to improving the product continuously and diversifying and extending the brand portfolio ongoingly. This shift is not only about innovation but also about establishing a robust testing regime that ensures each new product resonates before it hits the market, and about adapting and launching changes continuously. High-profile successes like Coca-Cola Creations, which created brand awareness through the initiative and launched successful campaigns around technology and celebrity-inspired flavors such as AI, Rosalia, and K-wave, and the line expansion of Liquid Death to 14 flavors, all illustrate the impact of such a strategy—each showing how dynamic, mission-driven product development can captivate the market. And this is before even taking about all the retail shelf-space that is occupied by all the Coke Zero variations. By adopting a meticulous approach to concept-product testing and portfolio development, brands not only navigate through market turbulence but also create an optimal strategy that ensures their portfolio remains strong and responsive to consumer needs, embodying the true essence of being antifragile in an ever-evolving consumer landscape.   

In today's rapidly changing market landscape, successful brands must understand the importance of long-term innovation partnerships, particularly with technology providers, that can help them design effective innovation programs. These collaborations can offer advanced tools, streamlined processes and high-end analytics needed to stay competitive, enabling brands to harness sophisticated technologies and gain market insights faster. By engaging in such partnerships, testing programs can be tailored to the brand and brand/R&D managers’ requirements, based on the innovation stage. Brands aiming to stay competitive must prioritize antifragility over mere robustness and this involves quickly responding to trends with new products, constantly validating concept-product fit, and continuously enhancing product offerings. Ultimately, the Lean Startup framework, alongside this new way of framing the product development cycles enabled by strategic tech-enabled partnerships is key to driving consumer engagement and achieving brand success on the long-term.  

Product Hub was built be based on the Lean Startup principles, through discovery and many tested iterations, and is operating under the new Agile framework and it's been an absolutely great journey. Now expanding and adapting to client needs, it has been an instant product-market fit and has been able to achieve a complex roadmap significantly faster than competitors. This is all due to the principles laid out in this article, which we want to evangelize for all our current and potential partners.  

About the author: Alex Dobromir holds a MSc Degree in Economic Psychology from Tilburg International University, and a Research Apprenticeship and BSc Degree in Psychology from Bath University.  He is a published author and has won a high commendation in the Undergraduate Awards. Before joining MMR's product development team for Product Hub, Alex completed a commercial management traineeship with Asahi Europe International and was part of a tech startup studio. 
 

Citations  

Altman, S. (2014, October 24). How to build a startup. Speech at Y Combinator. Retrieved from Y Combinator  

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Galloway, S. (2017). The four: The hidden DNA of Amazon, Apple, Facebook, and Google. Portfolio.  

Kahneman, D. (2011). Thinking, fast and slow. New York: Farrar, Straus and Giroux.  

Ries, E. (2011). The lean startup: How today's entrepreneurs use continuous innovation to create radically successful businesses. Crown Business.  

Ries, E. (2017). The startup way: How modern companies use entrepreneurial management to transform culture and drive long-term growth. Currency.  

Sharp, B. (2010). How brands grow: What marketers don't know. Oxford University Press.  

Sharp, B. (2016). Marketing: Theory, evidence, practice (2nd ed.). Oxford University Press.  

Taleb, N. N. (2007). The black swan: The impact of the highly improbable. New York: Random House.  

Taleb, N. N. (2012). Antifragile: Things that gain from disorder. New York: Random House.  

Thomson, D. M. H., & Coates, T. (2021). Conceptual profiling – Navigating beyond liking. In H. Meiselman (Ed.), Emotion measurement (2nd ed., pp. 381-438). Woodhead.