What's in a brand?

More years ago than I care to remember, I was invited to a factory to witness the production of cans of fizzy drinks. Always intrigued to discover how things are made, I jumped in my trusty Honda and raced off to see the production line in action.

Even before I entered the factory, I was amazed by the size and scale of the operation. Outside I witnessed several large trucks delivering what can only be described as voluminous amounts of sugar and caramel — ingredients vital to the manufacture of fizzy drinks.

Inside the factory, the scale of the plant was even more obvious, with fully automated machinery filling the cans up with a variety of beverages, from colas to sparkling lemonade, at a rapid rate.

But as the cans raced down the production line — I spotted something intriguing. The manufacturing line, it appeared, wasn’t just making one particular brand of cola but many such brands. Indeed, there was a huge variety of labels from a large number of different stores and organisations.

I couldn’t help, however, being rather amused by the whole affair — for here was one factory that was singularly responsible for making fizzy drinks for a whole host of different brand-name outfits throughout the length and breadth of the UK.

Today, there are a lot of big plants that manufacture similar products that are then simply branded differently before being shipped to any number of customer’s distribution warehouses. And not just cans of cola either. No, in fact, almost everything on the shelves of your local supermarket is manufactured in such a fashion — from consumer electronics to frozen peas.

Few of us today would be surprised by the fact that such products are now being manufactured at one or two large manufacturing plants that crank out several brands at once. After all, economies of scale make it a simple fact of life.

Many of these manufacturing plants also make use of automated inspection and control systems that themselves were manufactured on similar automated lines. Indeed, many such products used on the lines might almost be considered commodity items too.

What isn’t such a commodity is the highly prized intellectual property (IP) behind such systems. And it is the licensing of the underlying IP that represents a real opportunity for many small SMEs in the UK, especially for many of those that spin-out from our universities.

Let’s not forget either the prospects that such mass manufacturing also represents to those savvy companies who themselves do no more than affix their brand names to the products that flow off the production lines.

Even though there might not be much difference between the products that they offer and those of their competition, they are adding value too — not to the consumer perhaps, but certainly to their own company’s profits.

David Wilson

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