The Category Exit
The message that gets a brand into a market is the very same message that will keep it there.
There's a widely held assumption in brand management that if a differentiation signal has helped the brand grow, it should be visible. Lead with what worked. Protect what got you share.
The premise is perfectly valid for a brand in the early stages. It becomes a ceiling for a more mature brand.
Catalina Crunch redesigned in 2026, which demonstrates the difference. The original business was built on the keto premise, and that was front and center on the packaging. The new design moved the keto message to the back and brought the appetite imagery and more general nutritional messaging to the front. Designalytics ran a preference test comparing the new and old packaging and found that 65% preferred the new cereal packaging and 77% preferred the new snack mix. Sales in the six months after the redesign were up 65% for the cereal and 131% for the snack mix versus the same period the prior year. Sales per point of distribution (which accounts for the expansion of shelf space) were up 40% and 16%, respectively.
One case doesn't settle it. The numbers come from Designalytics' own awards piece (written by their VP of Content), and the article makes absolutely no attempt to control for price, promotion or distribution changes over that period. It's self-reported by an organization with a vested interest in showing that design drives sales. Don't go down the route of asserting causality.
What the case does so effectively demonstrate is the strategic choice that led to it. That choice is the one that is so common and yet so consistently overlooked.
A powerful niche signal can effectively tell the non-user that the product is not for them.
How entry signals become exit barriers
When a brand enters a market, it has to be legible. Legibility is the idea that you have a clear signal that this product is for keto. That contractor is a multifamily contractor. That health center is a pediatric practice. The signal serves the purpose of categorization and will attract the audience that is already in the market and primed to act.
But the same signal that creates the categorization for one group also creates the categorization against the other. Every time there's a 'keto' cue on the package, it tells the non-keto shopper they've already been categorized. The signal is working perfectly. It's just working on two groups at once, one of whom is being told to keep on walking.
This is absolutely not a packaging issue. It's a positioning maturity issue. There comes a point at which the brand's actual competitive advantages (the ingredients, the texture, the nutrition, the manufacturing quality) have grown so far beyond the category that originally made them comprehensible that the category itself is no longer big enough to contain them. The category is still doing its job. The job has just become too small.
Katrina Winkel (Marketing Director at Catalina Crunch) was very clear about the strategic intent: the brand could extend its reach by shifting to a broader message. She referred to it as a brand pivot rather than just a packaging change. The visual change was the result of a positioning decision about who the brand was now going to be talking to.
The problem with leading with earned signals
Brand teams, of course, are quite happy to keep a growth signal the organization knows about under the radar. There's a very reasonable basis for that indeed: it worked, so why on earth would we change it?
But earned signals come with a particular risk as brands mature. The signal was designed to be extremely efficient at inclusion for a particular audience. That same efficiency at inclusion is efficiency at exclusion for everyone else. A brand that has successfully found its keto buyers via keto-first packaging has also, via that very same mechanism, reliably excluded everyone else who doesn't define their eating in that way.
There's a second-order effect that people tend to miss. The long-term customer of a category brand will invariably overplay the category attribute as an indicator of quality. They have faith in the brand on that basis. If the brand reduces the visual emphasis on that attribute, there's a very real risk that those long-term customers will perceive it as a lack of commitment. That's a legitimate risk and one that has to be considered. It's a different issue to what happens at the very edge of the category where the new customer is making their first assessment and the category attribute is still acting as a signal of relevance.
Mature positioning is just about holding on to the underlying advantage and dropping the name that was the source of that advantage.
What the decision actually requires
The category exit is not about de-differentiation. Catalina Crunch didn't strip the product of its nutritional attributes from the pack. It simply moved them from the front of the pack to a secondary position. The product itself is unchanged. What's changed is which element of the brand's proposition is front and center on the pack.
This is important for how an organization would make similar decisions. The issue isn't whether or not to maintain the distinction. The issue is whether that distinction still needs to be labeled in the same way, or whether the brand has got such a strong reputation for quality that the product itself can now speak for itself on a range of other attributes.
A regional law firm that specializes in bankruptcy now faces a similar decision if it is to expand into commercial property. A food brand that has built its reputation on being allergen-free is in the same position as the mainstream market, which has moved so far on that front that the allergen-free aspect is no longer a differentiator. A health center that has built its reputation on providing services to the immigrant community is in the same boat as it seeks to grow its general adult primary care panel without in any way losing its existing community.
The real capability is there in each case. The question is whether the label that made that capability visible in one context remains the right one in another. The answer is almost always going to be context-specific. The strategic question is just rarely asked at the right time (i.e., before the brand has visibly stalled) rather than after.
The timing problem
Orgs generally only realize the category ceiling is there too late. The very signal that drove early growth is usually well and truly embedded in the organization by the time it starts to act as a ceiling outside it. The internal teams have come to associate that signal with the brand. The sales teams have used it as a shorthand. Marketing has run campaigns on it. From the inside, it just feels like what the brand is.
By the time the external market tells you the label is limiting (through flattening penetration rates, through consumer research that shows high awareness but low relevance amongst the target growth audience), you've got to make a change that, in the eyes of the people inside the organization, looks like a step back from something that was working.
It's not a retreat. It's an acknowledgment that a tool which was designed for one purpose is now being asked to perform a different function. The entry signal was designed for entry. Expansion requires something different.
The useful prompt isn't whether the brand's differentiation is real (it almost invariably is). The prompt is whether the current visual and verbal proposition actually communicates that differentiation to the audience the brand needs to reach in the next phase, or whether it's simply telling that audience to keep on walking.
The aim is not to be like everyone else. It's to stop being like just one person.
McCluskey, P. (2026, October 26). Designalytics Effectiveness Awards: Catalina Crunch captures Grand Prize. The Dieline. https://thedieline.com/designalytics-effectiveness-awards-catalina-crunch-captures-grand-prize/
Note: The article is authored by Designalytics' VP of Content and published in connection with their own awards program. Sales figures are self-reported and unverified by an independent source. Consumer testing methodology and sample details are not disclosed in the article.
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