In this episode of Bear in Mind, Dave sits down with Joe Benn to discuss this year's Challenger 50 report from M&C, which ranks the UK's fastest-growing challenger brands.

With experience across challenger brands, entrepreneurship, investment and media, Joe shares what the data reveals about the brands achieving challenger-level growth, what they have in common, and what other founders can learn from them.

The conversation also explores one of the report's most interesting findings: the relationship between brand awareness and distribution, and what it can tell challengers about where to focus their growth and marketing efforts.

The idea for the report came from Joe's long-standing interest in challenger brands and a desire to understand which businesses were genuinely delivering challenger-level performance.

He had always been interested in Bain's Insurgent Brands List in the US and wondered what an equivalent list might look like in the UK. An initial attempt, based largely on his own view of the market, generated plenty of debate, including from brands frustrated at not being included.

That made one thing clear: if the list was going to be genuinely useful, it needed defendable criteria rather than simply being based on who felt like a challenger. Joe subsequently worked with NielsenIQ, Trax and Beauhurst to build a data-led approach. The starting point was several hundred brands. To qualify, brands needed to be doing under £100m in retail sales value in the UK and achieving at least 20% year-on-year growth for two consecutive years.

The top 50 were then ranked using an index built from more than 100 data points. The five key areas were retail sales value, two-year growth, weighted distribution, prompted awareness and year founded. The result is a deliberately broad definition of a challenger. The list includes brands that are only a few years old alongside businesses that have been around for more than 100 years.

As Joe explains, the focus wasn't on which brands had the coolest packaging or the most disruptive positioning. It was about which brands were actually delivering challenger levels of performance.

The top three brands in the report were AU Vodka, Jason's Sourdough and Bio&Me Gut Health.

One of the things that stood out was the performance of brands such as Jason's and St Ewe, which are disrupting large, established categories rather than creating entirely new ones. Bread and eggs are both billion-pound categories in the UK, meaning there is significant opportunity for brands that can find a way to disrupt an existing market.

At the same time, other brands on the list are building new categories, including Vita Coco and Moju. The report therefore demonstrates that there isn't one way to be a challenger. Growth can come from disrupting an established category or creating something new.

It also highlights how much experience can sit behind an apparent overnight success story. Jason's may be a relatively young brand, but it comes from a 118-year-old family baking business. St Ewe also has deep farming heritage behind it.

BuzzBallz is another example of a brand whose success might look very different from its origins. The brand achieved 444% growth over the period measured, but was actually launched in Texas in 2009 by a 47-year-old teacher.

For Joe, its success is a combination of strong execution, timing and the culture being right for the brand.

Another finding that was surprising was the prevalence of clean label positioning across the top 50. 88% of the brands have some level of clean label claim, with many also bringing positive changes around health and nutrition to their categories.

The report also found that 24% of the brands are B Corps and 38% have at least one female founder. For Joe, this reflects a wider pattern: challengers are often the brands pushing categories forward and introducing new approaches.

His view is that the market is increasingly moving towards clean label and whole-food propositions, or brands that have a very compelling reason to do something different.

Perhaps the most interesting analysis in the report looks at the relationship between brand awareness and distribution. The 50 brands were plotted on a graph to see how the two metrics relate to one another. What emerged was that many of the highest-ranking brands, particularly those in the top 10, sit close to the trend line. In other words, they are growing awareness and distribution broadly in line with one another.

For Joe, seeing this relationship in the data was particularly interesting because it provides challenger brands with a way to benchmark themselves against relevant peers. That's one of the reasons the report was created in the first place. A growing brand might have access to its own data, and potentially competitor or category data, but it rarely gets the opportunity to see how it compares with a wider group of challenger businesses.The Challenger 50 effectively provides that benchmark.

Read the full Challenger 50 report here: Challenger 50 report here

Where a brand sits on the awareness versus distribution graph can provide a useful starting point for thinking about its marketing strategy.

If a brand is below the line, it suggests that brand metrics and awareness are lagging behind distribution, meaning the focus should increasingly be on building awareness.

If a brand is above the line, distribution is potentially lagging behind awareness, suggesting the opportunity is to focus on getting into more retailers and securing more space. This is particularly useful because brands often have a sense of where they are under-indexing but don't necessarily have the data to prove it at board or investment level.

The analysis also looked at Above-the-Line media investment and found a relationship between distribution levels and when brands were investing heavily in awareness. Joe's view is that once a brand gets into the high 20s in terms of weighted distribution, the conversation around Above-the-Line investment should begin. As distribution approaches 40–50%, he believes brands should be seriously considering it.The reason is that investing heavily in awareness before you have sufficient distribution can create significant wastage.

For an early-stage, retail-heavy brand, Joe recommends a more tactical approach focused on driving trial and distribution, including things such as sampling.

For a DTC-led brand with a high average order value, digital performance marketing can potentially be scaled further before broader awareness investment becomes necessary.

The difficult point comes when a brand moves from being primarily performance-led to having significant retail distribution. Joe describes this transition as a critical moment in a business's lifecycle - get it right and the impact can be significant; get it wrong and it can become messy and wasteful.

Looking beyond the report, Joe's advice for challenger brands is that there is no single formula for success. Disruption can come through brand, pricing or packaging, and successful challengers may combine several approaches. But trying to disrupt everything at once can also become confusing.

One thing Joe is particularly cautious about, based on his own experience with Ugly Drinks, is chasing US trends. When Ugly was launched, the team believed they were getting in early on the growing flavoured sparkling water trend. Instead, the category quickly became incredibly competitive, with more than 100 brands entering the UK market within around 12 months. He sees similar patterns in categories such as functional cereal and functional soda where successful US trends can quickly attract a wave of competition.

Joe's alternative is to look for opportunities that are perhaps a little less obvious. He points to Bio&Me as an example of a brand that took a product concept from Eastern Europe and built gradually, without the same level of hype and competition surrounding some emerging categories. By the time the business had reached around £10m and attracted wider attention, it had already built an advantage.

The same principle can be seen in brands such as Jason's and St Ewe, which have been quietly building within established categories.

The lesson for founders is that jumping onto a hype train means competing with everyone else. Sometimes the less obvious opportunity gives you more time and space to build.

Looking ahead to the next Challenger 50 report, Joe expects many of the same macro trends to continue. Clean label and whole-food propositions are likely to remain important, alongside functional products aimed at younger consumers and continued evolution in alcohol-adjacent categories.

At the same time, he expects to see some movement in the opposite direction, with indulgence and nostalgia brands potentially making more of an impact.

The report itself may also expand beyond FMCG, with beauty and personal care among the potential areas for future analysis. For Joe, the important thing is that whatever comes next remains data-led and defendable, giving challenger brands a meaningful way to understand their performance against their peers.

And as the report develops, some brands will graduate as they become too large, while others will drop out if their growth slows.

For challenger brands looking to understand where they stand - and what they need to do next - that's arguably what makes the report most useful.

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