A top consultant in the consumer tech sector was on assignment with a large consumer brand in the Bay Area.

This brand was once a staple in households across the country. In recent years, it’s been slipping.

Previously a dominant player in its sector, this company steadily lost money and market share. The consultant told me the brand made every effort to evolve and pivot, yet it continually found itself in even worse shape than before. The red flags were evident.

In contrast, two promising new brands—PRANAON and Neat Nutrition—have achieved great success in their home markets overseas. I’m fairly certain they’ll find the same level of success in the U.S.

The potential of these new brands reinforces why the big, incumbent players are losing. These are some of the reasons why.

1.   They’re Drifting Away from Their Core

Because disruptive consumer brands are successfully targeting millennials, legacy brands are hoping to pursue this same demographic. The problem is that chasing millennials translates to these legacy players drifting away from their core customer base.

When these big consumer brands fail to win the hearts of millennials, they will have also overlooked their once-loyal followers. And so they end up losing twice.

Millennials simply aren’t interested in sterile chain brands—we’ll explore this in more detail later on—yet legacy companies continue to chase this high-risk, high-reward demographic. This is the equivalent of pursuing negative-margin consumers, with high customer acquisition costs (CACs), high churn, and low lifetime value.

The unit economics simply do not work.

To address this, legacy brands should focus their efforts on building and maintaining their existing customer base. This is a path toward steady growth and high-margin repeat buyers, laying the foundation for low CACs and recurring revenues.

2.   They’re Too Slow

When legacy brands realize they’re losing market share or being left behind, some resort to buying newer companies in their sector. Mondelez recently did this with Tate’s Bake Shop, paying approximately $500 million for the cookie maker as it worked to address changing consumer tastes. Similarly, in 2015 WhiteWave Foods acquired Vega, a leader in plant-based natural health and performance nutrition products.

The issue with declining brands pursuing M&A to catch up is simple: Buying companies takes time. Even realizing they have a problem and need to go out and acquire companies in the first place—there is a tremendous lag here. This, along with the time it takes to fully integrate an acquisition target, could take well over a year. And during this time, consumer tastes and preferences will continue to change.

This means that by the time a transaction closes, the legacy brand may yet again be out of sync with market demands.

Legacy brand sluggishness can also be attributed to diminished consumer trust. When Warby Parker made a social media call to action, it gained connectivity and feedback from hoards of consumers. Meanwhile, Glossier and Harry’s each had over a million social media followers before launching.

Facilitated by trust, connectivity can provide volumes of invaluable consumer data. However, many consumers are apprehensive about big brands, and will not engage with them on such an intimate level.

This ultimately stifles these brands’ ability to evolve.

3.   They’re Culturally Challenged

Incumbent consumer brands and their management teams want to be the biggest and the best. This is the way they’ve always done business. They seek to control their ecosystem—their partners, suppliers, and others—while raising barriers to entry with significant economies of scale.

The result is that these legacy brands have become sluggish and disconnected from consumers. As discussed, being bigger also yields a significant lag time in catching up with consumer tastes.

In an attempt to pivot in new directions, bloated brands are taking too long to innovate and refine their products.

Conversely, companies like Casper Mattress, Allbirds, and Harry’s have disrupted their respective industries by being nimble and having a finger on the pulse of consumer preferences. Casper in particular didn’t aim to have the broadest product portfolio. Instead, it initially offered a single mattress, which created a direct line of sight to the consumer and enabled real-time feedback to refine on the fly.

These brands never sought to be the biggest. And as such, they were more responsive to consumer needs right from the start, and managed to take additional market share at a much faster rate.

Legacy brands are well-suited to pare down their bloated product portfolios. However, because they’ve always wanted to be all things to all people—to be the biggest and the best—they’ve struggled to become nimble from a cultural standpoint.

4.   Their Brand Value Is Diminishing

Consumers—and especially millennials—have a greater need for uniqueness and authenticity than ever before. They want their favorite brands to say something about who they are as individuals.

They want the brands they use to serve as a reflection of themselves. This is hard to attain from a conglomerate brand that offers everything from clothes to toothpaste to batteries, and so much more. Most big brands’ approach is just not sexy, nor is it genuine.

That said, with brands like Cotopaxi, NoBull, PRANAON, Neat Nutrition, Nisolo, Roka, Rothy’s, and others, consumers can satisfy both a need and a cause. On the latter, many of these brands have sustainable and social missions that aim to benefit the communities around them. As for the former, the newer brands are often much more nimble and at the leading edge of what they offer. They tend to provide unbeatable utility and functionality.

The newer brands also hold the upper hand in authenticity, which is something the legacy players cannot match. Millennials believe that by choosing the disruptors, they can “stick it” to both the bigger brands and to the last wave of companies that have “sold out”—that is, the companies that have gotten too big, too mainstream, or that were acquired by even bigger companies.

Next time, I’ll be writing about two big legacy consumer brands that are doing it right. Stay tuned for more information.