Small Brand Strategies for Fueling Big Growth

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3 Small Brand Strategies for Fueling Big Growth Tim Clark & Brooke Smith Co- Directors, Center for Brand Excellence

4 The new age of emerging brands 4

5 The new age of emerging brands 5

6 The new age of emerging brands 6

7 Challenger brands are reshaping the market BIGGER ISN T ALWAYS BETTER. BETTER IS BETTER. In response to consumer demand and ongoing center store decline, retailers are turning to innovative, better-for-you brands to drive category growth $18B in sales shifted from large to small companies from * CATEGORY DISRUPTION 190K new UPCs and 9,500 new CPG brand launches hit store shelves in 2013* 7 of the top 10 and 73 of the top 100 new food and beverage products offered a better-for-you benefit* *IRI/Boston Consulting Group Study 7

8 The pursuit of health & wellness HEALTHY FOOD SALES WILL HIT $1 TRILLION BY 2017* 88% OF CONSUMERS POLLED IN 2015 SURVEY ARE WILLING TO PAY MORE FOR HEALTHIER FOOD** KEY DRIVERS - FRESH/HEALTHY/CONVENIENT Shoppers are choosing retailers and brands that most closely align with their personal values and wellness needs SHOPPER TIME SPENT BY AREA OF STORE IS CHANGING*** Perimeter 39% Center store 18% Navigating/Checkout 44% *Euromonitor **Nielsen 2015 Global Health & Wellness Survey ***Video Mining Study 2MM Shopping Trips 8

9 Challenger brands are reshaping the market SHARED SHOPPER PARADIGM 83% of U.S. adults report they have at least half the household responsibility for grocery shopping* MULTI-CHANNEL SHOPPING IS THE NORM FOR TODAY S CONSUMER On average, shoppers are visiting 4.5 channels during a 30 day period** DIVERSIFICATION OF PRIMARY STORE Loyalty is increasingly being granted department by department *FMI US Grocery Shopper Trends 2015 **Euromonitor 9

10 THE GOOD NEWS Emerging brands have unprecedented opportunity to introduce innovative brands and products to market quickly and attain significant and accelerated growth. 10

11 THE BAD NEWS Shoppers are more discerning than ever. Not all retailers are created equally for your brand. As many as 95% of new CPG product launches fail* 11

12 THE CHALLENGE How do I ensure my NEW PRODUCTS are in the 5%? Once I m on shelf, how do I not just survive, but THRIVE in key retailers? 12

13 What brands need to know I know who I believe my core target consumer is, but who is actually buying my product? Who is shopping my top competitors and my category? What else are they buying and what can I learn from that data? 13

14 What brands need to know How do I know which retailers are the best fit for my brand and offer the most strategic growth opportunity? How do I get on shelf in those retailers? And how do I promote effectively to reach targeted shoppers and grow my velocity? 14

15 What brands need to know What promotion methods and deals are most popular in my category and among like-minded brands? How do I truly measure the effectiveness of my trade and consumer spend? 15

16 Knowledge is power. Understand your shopper What they buy, when they buy, where they buy, what else they buy. Know what they want and need, and you can know what to do next. 16

17 A brand s defined core target THE TARGET: GENX & MILLENIALS. Women $75K+ HHI College+ Foodie 17

18 Who s really buying your brand? Match loyalty IDs to Household Data for a demographic profile of your SHOPPER 18

19 Understand your shopper Booming With Confidence: Prosperous, established couples in their peak earning years living in suburban homes Power Elite: The wealthiest households in the US, living in the most exclusive neighborhoods, and enjoying all that life has to offer Flourishing Families: Affluent, middle-aged families and couples earning prosperous incomes and living very comfortable, active lifestyles Suburban Style: Middle-aged, ethnically-mixed suburban families and couples earning upscale incomes I buy wine, premium cheeses and specialty snacks and desserts for regular entertaining. 19

20 Lifestyle segmentation 20

21 Not all shoppers are created equal Who is brand loyal and buys my products regularly (at full price)? Who buys my brand on deal/promotion? What types of promotions appeal to those segments of shoppers by demographic? How does that vary by retailer, region, etc? What does the path to purchase look like for my shoppers? 21

22 Where are your shoppers going for information? Millennials utilize almost twice as many sources as their older counterparts Millennials 54% 45% 65% 28% 19% 26% 24% 32% 18% 40% 27% 92% Online General Online Social Offline Social Print Outdoor Direct Mail 89% Event Avg 7.5 Non - Millennials 38% 23% 45% 23% 22% 18% 6% 8% 6% 15% 10% TV Radio Mobile Video Retail 22

23 Primary Purchase Influences Understand what motivates purchase and use these insights to fuel brand communication, content packaging design, innovation, and more. 73% BFY Salty Snacks 46% 26% 25% 26% 24% 14% 62% 59% Greek Yogurt 49% 41% 35% 23% 31% Price Flavor Nutritional Information Ingredients Quality Special offers Calories/Weight Management 23

24 Product attributes driving purchase in your category PRODUCT ATTRIBUTES Heart Healthy Cholesterol Free Non-GMO All Natural Sugar-Free Organic Gluten-Free Paleo / Low Carb Low-Fat Fat - Free Low-Sodium 81% 76% 80% 79% 76% 66% 68% 61% 61% 58% 53% 71% 55% 66% 53% 68% 51% 63% 68% 52% 58% 45% Millennials Non-Millennials 24

25 Your shoppers are talking. Are you listening? 25

26 Understand your shopper Compare your average basket size to the average basket Understand frequency of purchase for your shoppers Evaluate brand loyalists, deal seekers, etc. Brand X $74 Other $39 26

27 Understand what else they are buying Category level indexing can help direct you to where you will find the deepest insights into your shoppers Brand X 2.1% 4.1% 5.7% 6.1% 5.9% 6.1% 9.0% 2.3% 0.5% 0.4% 11.2% 30.9% 12.1% Dept GROCERY MEAT PRODUCE DAIRY FROZEN FOOD BEER & WINE DELI SOFTDRINKS NONFOOD HEALTH & BEAUTY GENERAL MERCH BAKERY 4.2% 21.7% CANDY 6.4% FLORAL MISCELLANEOUS Other 7.7% 14.1% 10.7% 6.1% 10.5% 8.9% 27

28 Understand their lifestyle and routines Uncover insights about your shopper: Pays premium for convenience and quality Makes fewer trips to big box for non-food items Category TOILET TISSUE 3.5% 5.8% Variance +68.8% FOOD & TRASH BAGS 2.4% 5.1% % PAPER TOWELS 2.8% 4.6% +62.2% DOG FOOD 2.6% 4.4% +69.6% LAUNDRY DETERGENT 1.8% 3.7% % DISH DETERGENT 1.8% 3.6% % HOUSEHOLD CLEANER 1.4% 2.8% +92.5% 28

29 Uncover brands most often purchased with yours Understanding top brands purchased with yours can help you target, plan, cut waste from your promotions and effectively reach coveted shoppers. This shopper of a salty snacks brand: Pays premium for deli meats and cheeses Substantially overindexes on Boar s Head deli meats 29

30 What other brands does my shopper buy? I buy craft beer and wine for my family and to entertain friends. 30

31 Expand opportunities at retail & build velocity Shopper insights can offer cross merchandising, promotion and secondary display opportunities. This shopper of premium cookies: Buys Talenti Gelato more often than any other dessert or indulgence 31

32 Put data into action 1. Find the best retailers and shoppers for your brand. 2. Identify which regions/markets/stores provide the biggest growth opportunities. 32

33 Put data into action 3. Utilize shopper insights and data to prepare your pitch or category review with key retailers. 4. Include a strategic promotion plan that effectively targets your shopper and drives sales. Don t leave it to the buyer! 33

34 Put data into action 5. Allocate budgets strategically by retailer. Choose the most relevant strategies and deals for your brand and for your shoppers. Target shoppers who would love your brand, but have not yet tried it. Identify the shoppers most likely to buy and become brand loyalists. 6. Identify categories and brands frequently purchased with yours. Utilize this data to drive targeting, co-branding opportunities, cross promotions and secondary displays. 34

35 QUESTIONS?

36 HOW DID WE DO? CLICK THE SURVEY BUTTON FOUND ON THE SESSION PAGE

37 THANK YOU Tim Clark (336) Brooke Smith (336)