Emerging Brands: The New Frontier
Shop the aisles of your favorite store on a regular basis, and you’ll be quick to notice that they’re changing. Fast.
Consumer needs and wants are changing and growing every day, and with it comes a demand for new products. A recent study by Strategy&, formerly Booz & Company, says that 30 percent of consumers are selectionists, and want a greater variety of flavors in the foods and drinks they buy. The number of consumers who care deeply about where their products come from and their shipping footprint is on the rise. And retailers are hustling to keep up and meet these needs.
As small brands emerge onto store shelves, they’re not only meeting the demands of consumers, they’re also driving category growth. They may seem small, but their drive is bigger than you can imagine, because as consumers pare down to very specific wants and needs from their products, it actually expands the CPG landscape.
Expanding the landscape means these brands are forging new frontiers for so many categories that have been stagnant for too long. Whole Foods is a prime example: they re-invented the shopping experience to cater to changing consumer needs and focus on the qualities that matter to their consumers, like local sourcing or environmentally friendly products. And that’s resulted in a very loyal shopper for the retailer.
Embracing the Past, Present, and Future
These new frontiers also mean great things for the entrepreneurs out there with stellar products. Retail buyers looking for those stellar products want just as much as the entrepreneurs for that product to be the next big on-trend brand to bring into their stores. Smart buyers know that smaller brands consistently outperform their competition. Strategy& analyzed the food and beverage industry and found that smaller players (meaning those with sales under US$1 billion) outperform their competitors in 18 of the top 25 categories. Yes, even the large, consolidated categories, like bakery, dairy, snacks, ready meals.
And that is nothing short of amazing--yet completely expected if you understand the power small brands can have on the bigger landscape. Smaller companies often have a greater amount of flexibility than larger CPG companies. They are nimble and open doors to new ways of thinking about old products.
That’s not to say that larger brands can’t also be part of the new frontier. But they first have to embrace the small-brand mentality, and focus their attention on understanding how a big, established brand is relevant in today’s CPG landscape. For larger brands, often that relevancy comes in the form of strategic acquisitions of small, innovative players.
Look at Coca-Cola. The soda giant routinely expands its beverage portfolio to leverage its distribution capabilities and stay on trend. While sales of Coke and Diet Coke are in obvious decline in a number of markets due to changes in consumer demands, the company has been busy acquiring brands like Glaceau, Fuze, Odwalla, Honest Tea, Innocent, and Zico, to meet the needs of health-focused consumers.
The Clorox company acquired Burt’s Bees, a leader in natural personal care with a very strong following. The company wanted to grow beyond its core products and reach the consumer the other products in its portfolio couldn’t.
Living in San Francisco now, I’ve had the chance to meet Eric Ryan, the founder of Method. Method’s natural and eco-friendly cleaning products debuted at a time when people were looking for more natural alternatives, and gained huge traction in a short amount of time. Since 2001 when they started, Method sales have grown to $100 million, and they were acquired in 2012 by Belgium-based Ecover.
These few examples are a fraction of the numerous emerging brands that have both made it into mainstream retailers and helped category growth just explode. Retail buyers need product discovery to ensure they are meeting consumer needs as well as driving category growth and profitability. And that is great news for new and emerging brands--your success story is out there, and waiting to be written.
Consumer needs and wants are changing and growing every day, and with it comes a demand for new products. A recent study by Strategy&, formerly Booz & Company, says that 30 percent of consumers are selectionists, and want a greater variety of flavors in the foods and drinks they buy. The number of consumers who care deeply about where their products come from and their shipping footprint is on the rise. And retailers are hustling to keep up and meet these needs.
As small brands emerge onto store shelves, they’re not only meeting the demands of consumers, they’re also driving category growth. They may seem small, but their drive is bigger than you can imagine, because as consumers pare down to very specific wants and needs from their products, it actually expands the CPG landscape.
Expanding the landscape means these brands are forging new frontiers for so many categories that have been stagnant for too long. Whole Foods is a prime example: they re-invented the shopping experience to cater to changing consumer needs and focus on the qualities that matter to their consumers, like local sourcing or environmentally friendly products. And that’s resulted in a very loyal shopper for the retailer.
Embracing the Past, Present, and Future
These new frontiers also mean great things for the entrepreneurs out there with stellar products. Retail buyers looking for those stellar products want just as much as the entrepreneurs for that product to be the next big on-trend brand to bring into their stores. Smart buyers know that smaller brands consistently outperform their competition. Strategy& analyzed the food and beverage industry and found that smaller players (meaning those with sales under US$1 billion) outperform their competitors in 18 of the top 25 categories. Yes, even the large, consolidated categories, like bakery, dairy, snacks, ready meals.
And that is nothing short of amazing--yet completely expected if you understand the power small brands can have on the bigger landscape. Smaller companies often have a greater amount of flexibility than larger CPG companies. They are nimble and open doors to new ways of thinking about old products.
That’s not to say that larger brands can’t also be part of the new frontier. But they first have to embrace the small-brand mentality, and focus their attention on understanding how a big, established brand is relevant in today’s CPG landscape. For larger brands, often that relevancy comes in the form of strategic acquisitions of small, innovative players.
Look at Coca-Cola. The soda giant routinely expands its beverage portfolio to leverage its distribution capabilities and stay on trend. While sales of Coke and Diet Coke are in obvious decline in a number of markets due to changes in consumer demands, the company has been busy acquiring brands like Glaceau, Fuze, Odwalla, Honest Tea, Innocent, and Zico, to meet the needs of health-focused consumers.
The Clorox company acquired Burt’s Bees, a leader in natural personal care with a very strong following. The company wanted to grow beyond its core products and reach the consumer the other products in its portfolio couldn’t.
Living in San Francisco now, I’ve had the chance to meet Eric Ryan, the founder of Method. Method’s natural and eco-friendly cleaning products debuted at a time when people were looking for more natural alternatives, and gained huge traction in a short amount of time. Since 2001 when they started, Method sales have grown to $100 million, and they were acquired in 2012 by Belgium-based Ecover.
These few examples are a fraction of the numerous emerging brands that have both made it into mainstream retailers and helped category growth just explode. Retail buyers need product discovery to ensure they are meeting consumer needs as well as driving category growth and profitability. And that is great news for new and emerging brands--your success story is out there, and waiting to be written.
Nicky Jackson, Founder & CEO of RangeMe, an online platform that streamlines new product discovery between suppliers and retailers. The concept of RangeMe came to Nicky while developing a range of baby skincare products. Looking for ways to achieve fast distribution, she had the idea to create a single network to match sellers with buyers looking for products like theirs. Before launching RangeMe Nicky worked as a Marketing Executive at Kellogg’s, Uncle Toby’s, Goodman Fielder, Pepsico and Jim Beam.