Small Business

Our home and native brand

Canada's top-ranked brands share a unique homegrown sensibility—even when the profits are going to foreign owners

Written by Bruce Philp

Canada loves its brands. It might send No-Logoists into paroxysms of denial, but the fact remains that Canada’s native brands are a clear theme in the country’s cultural mosaic—so much so that we’ve mostly been willing to overlook the technicality of ownership in order to continue claiming them as our our own. Over the years, we’ve seen one after another fall into foreign hands—from breweries to donut shops to cultural institutions—and decided that who created them matters more than where the profits go. That’s not as illogical as it might seem. Canadian consumers are just more inclined to take pride in the conception of a great business than in its status as property, and more likely to focus on the role a brand plays in their communities and lives. That says good things about Canadians as people—if not necessarily as capitalists.

It also, more than anything, explains the unsurprising composition of this year’s list. Fully 20 of the 25 brands on this year’s list also appeared on last year’s ranking. The order may have shuffled, but there is a sense of incumbency about the brands here. There is no longer a brewery among the top 25; one bank fell off the list while two others join it; and one insurance company has been swapped for another; but the picture this ranking paints of our indigenous brandscape remains generally as it has been for a couple of decades: lots of retail with a sprinkling of financials and telecoms, and a few entrepreneurial success stories legitimized by history. We make our brands work for this kind of prestige, but once earned, it sticks.

What is harder to explain about this year’s Best 25 is the general softening of their scores. This year’s accross-the-board average fell by nearly eight points. And, for the group as a whole, the decline wasn’t focused on one or two attributes; the weakness was across all of them. This malaise was broadly distributed: Last year, 19 of the Best 25 brands scored 75 points or higher (see our methodology below). This year, only seven cleared that mark. Obviously, there’s more here than just performance declines, and one wonders if for many brands the problem is simply how often the average person hears from them anymore. As more marketing spending shifts to platforms that are targeted and transactional—search and social media foremost—mass awareness, and the prestige that goes with it, are inevitable casualties. Whether that price is worth paying, only the bottom line can tell.

Among the decliners, though, were six especially interesting cases: Tim Hortons, Cirque du Soleil, Canada Goose, Shoppers Drug Mart, Rona and Roots. What do these brands have in common? Besides being perennial favourites, they also all underwent high profile changes of ownership within the couple of years prior to this year’s survey fieldwork. And these transitions seemed to correlate to an extra bit of love lost among Canadian consumers. These six brands fell by an average of more than 10 points from last year to this one. It’s noticeable not just because of the correlation, but because Canadians have traditionally been pretty uninterested in boardroom politics. What gives?

It just may be that while Canadians aren’t concerned about the technicality of ownership, they can tell when they’re being monetized. Four of those six changes of control involved investment companies rather than strategic acquisitors. For these owners, a return on investment depends not on investing in deepening the brand’s relationship with consumers, but on some combination of reducing costs and extracting more money from each customer interaction: menus get longer, product lines get extended and business definitions start to blur. It isn’t just the brand’s ownership that changes: it’s the brand experience itself. It seems plausible that consumers sense this shift, and it makes them wary. That would cost even the strongest brand some goodwill.

The staying power of Canada’s Best 25 Brands is impressive, but it speaks as much to our desire to maintain the distinct character of our marketplace as it does the excellence of their reputations. That, in the end, is what makes this exercise important. In order to protect that distinct character, we need a constant supply of entrepreneurs with the vision, guts and capital to keep a list like this fresh. The companies on it deserve our admiration, but that doesn’t mean we shouldn’t hope there are 25 more hungry new challengers right behind them, determined to take their places not just because they’re Canadian, but because they’re awesome.

This article is from the October 2016 issue of Canadian Business. Subscribe now!

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