Is Going Niche a Bad Move for Small Brands?

I came across a very interesting post from Elena Jasper on How small brands grow (link in comments).

I also found in comments of that post that some people think ‘Going Niche’ is not a wise move.

I disagree slightly.

Firstly I believe, Small brands don’t “choose” to go niche. They are forced to go niche.

Going niche is not the problem. Staying niche is.

📌 Survival First

Many believe that If small brands are niche-focused, they should show high loyalty.
I don’t think this is universally true. Niche ≠ loyalty strategy.
Niche = constraint driven positioning.

So what are those constraints

Most small brands don’t have:

– Distribution muscle
– Distinct positioning
– Memory structures created in the minds of people about it
– Budget for mass reach

So they are forced to carve out a survivable pocket.

📌 Why Going Niche is the only way to have a fighting chance against Big Brands

We have built MMMs for big CPG brand (almost 100 years old) and for new CPG brands that are just 2-3 years old.

If you are a small brand trying to go broad from day one, you get crushed.

Large brands benefit from:

▪️Mental availability (we have seen brand equity numbers in the range of 70-80% – modeled from MMM)
▪️Physical availability (Again seen distribution contribute around 5-10% of sales – modeled from MMM)
▪️Habit loops

A small brand has none of this.

So what do you they do?

They go niche:

– Category niche (e.g vegan, keto, regional flavors etc)
– Audience niche (e.g athletes, new moms, men, women, children, diabetics etc)
Occasion niche (e.g late-night snack, travel food etc)

📌 Small Brands may not have loyalty to show off

Small brands may not show loyalty and that is expected because their buyers are light (may be even just first trials). But if a brand does succeed in building loyalty, it will soon grow because of word of mouth effect. This is in reference only with CPG.

📌 The correct strategy for small brands

I believe going niche (a beachhead move) is the right move for small brands. But staying niche is not. Most importantly small brands should not ignore penetration.

So yes brands do grow by increasing penetration. But for small brands, the steps include:

✅ Go Niche first
✅ Try to carve out a survivable pocket
✅ Get More Users (loyalty helps)

In the long run, brands don’t die from being niche.
They die from never escaping it.