Before You Launch Another SKU, Ask This 1 Hard Question

Before adding variety, founders need to confront whether their core product has truly built demand—or just shelf space.

BY VICTORIA WATTERS, CO-FOUNDER, DRY ATLAS

When a CPG brand’s velocity starts softening, the instinct is almost universal: launch a new SKU. It gives the sales team something to pitch and the retailer something to reset. The problem is that it rarely fixes the actual problem. 

A new flavor isn’t a growth strategy. It’s a hypothesis about why consumers aren’t buying more, and it’s usually the wrong one.

The real problem is upstream

Slow repeat purchasing isn’t usually a flavor problem. It’s most likely a positioning problem. Consumers aren’t failing to come back because they’re bored with the taste, but because your brand hasn’t yet become a habit. Adding more SKUs to a brand that hasn’t earned a regular place in someone’s routine doesn’t solve that. It just gives undecided consumers more options to walk past.

The math compounds quickly. A brand that can’t drive repeat on three SKUs now has six. Retail buyers, who were already skeptical, start asking questions about velocity per facing. The marketing budget—never sufficient to begin with—gets diluted across an increasingly complicated story. The brand starts to feel like it’s figuring itself out in public.

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What scale actually requires

Emerging brand founders tend to take inspiration from large CPG companies. But for those companies, SKU expansion actually can drive growth. They already have something small brands don’t: a locked-in consumer habit and a crystal-clear reason to choose them. Extensions at that scale are about capturing incrementally more of an existing basket, not building demand from scratch.

Courtney O’Brien, founder of the Outlier Initiative and former Coca-Cola executive, puts it plainly: “What founders get wrong is thinking flavor extensions create growth. At scale, they build on an already clear brand and strong repeat behavior. Without that, new SKUs don’t drive demand—they dilute it and make it harder for consumers to know why to choose you at all.”

Most emerging CPG brands treat flavor extensions as a construction tool. They’re actually a harvest tool, and you can only harvest what you’ve already built.

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