In short, an “ingredient” brand is used by a “host” brand to borrow established brand equity. By definition, an ingredient brand, unlike the cheese, doesn’t stand, alone. Rather, it requires a host brand to which it lends some needed attribute. In the previously mentioned examples, Teflon lends the attribute “non-stick,” a brand with Gore-Tex attached to it signals trusted weather protection, and the Dolby brand signals high-quality audio.
However, none of these ingredient brands manufacture their own line of products. Instead they are content to use their marketing resources to reinforce their positioning and attract host brands. Also note that a successful ingredient brand is perhaps the purest example of the marketing maxim that a brand should only own a single unique position − or risk brand dilution or confusion as to what it stands for. But that’s a story for another article.
Another important aspect of an ingredient brand is non-exclusivity. While the host brand would no doubt prefer only they be allowed to boast the benefits of any particular ingredient brand, the opposite holds true for the ingredient brand. Strategically, it makes sense for the ingredient to attach itself to more than a single host brand – it increases its name recognition, solidifies its positioning, brings in more revenue, and spreads business risk. This dynamic between host and ingredient brand is common and usually finds its own equilibrium. However, that may be changing as we’ll see shortly.
Lastly, from a brand architecture perspective, the ingredient is always subservient to the host brand. The ingredient brand is there to lend credibility, not to share co-billing with the main brand. One exception that comes to mind is the liberal use of the Teflon brand on generic cooking pans. I see this as a sign of a mature brand seeking to expand market share at the risk of making itself less “special” for more popular brands of cooking pans.