About half of a brand's dominance comes from secret, long-term deals with grocery stores, not because people actually like the product more.
SSRN · March 17, 2026 · 6408038
The Takeaway
It is a common assumption that leading brands stay on top because of history or consumer preferences. This research shows that half of that dominance is actually forced by vertical contracts with retailers that prevent smaller competitors from ever getting shelf space, suggesting that 'loyalty' is often just a byproduct of limited availability.
From the abstract
Previous research documents persistent regional differences in national brand market shares, often attributed to geographic preferences and early entry advantages (Bronnenberg et al. 2007, 2009). This paper examines whether long-term vertical contracts help explain this persistence. Using NielsenIQ data from the same product categories as Bronnenberg et al. (2007), we decompose the variance in brand shares into Brand × Retailer and Brand × Market components following Abowd et al. (1999). Retaile