How Retailers Can Make Shopper Marketing Work Harder for Small Brands
In the retail food business, small brands are really the growth agents. Don’t believe me? Over the last five years, while revenues have fallen by a combined 15% for the 10 biggest publicly traded packaged food and beverage companies, an estimated $15 billion has shifted to companies with less than $1 billion in annual revenue (source: IRI).
We’ve seen how the big guys have responded to the heel-biters. Stories such as Kellogg snapping up Rx Bar and Unilever gorging on Sir Kensington’s, Pukka Herbs, Mae Terra, Tazo and Sun Basket in just one year have been commonplace.
In-house consulting and mini-funding programs like Kraft Heinz Springboard and Chobani Incubator have emerged, where the old guard trades access, experience and resources for a peek under the small food tent. It’s an opportunity to meet the next acquisition. But also, an admission: our experts need help to learn the ways of new food makers.
Shopper marketing needs to think and change like this, too. The practice was built by and for big manufacturers and retailers and suffers from similar cumbersome inefficiencies. It needs to change to not only benefit shoppers seeking small brand innovations, but to simultaneously act as a megaphone for smaller brands that are driving growth.
Here are three ideas for retailers to consider in supporting today’s small brands:
- Unlock data: A key driver of small brand success is that niche consumer groups respond with significant loyalty to things they find to be just right for them. Retailers and third-party data providers have sized their data-access packages for the deep pockets and resources of big food players. A change to make data access more economical for small brands will identify and grow loyal shoppers faster.
- Make it self-service: Social media has been a game changer for small brands. It provides a scale audience. There are no minimums or reps required. The format doesn’t require expensive creative assets. Just log in, build a campaign (hopefully with the help of a great creative agency), and launch. Marketing through Amazon is like this. With the help of third-party media and tech companies, retailers can optimize their owned channels to better support and empower smaller brands.
- Undo category captaincy: The idea of category captaincy — that a highly resourced supplier sits side by side with its retail partner to identify the best assortment, segmenting, pricing and opportunity to grow its category — may be the impediment to its purpose. If small brands are the ones driving growth, what has the category captain model delivered? What opportunities have been missed because a biased assortment did not open up to actual shopper demand? Much the same way the big food players are “consulting” with select upstarts, retailers should expand their relationship with select new suppliers from transactional to venture partner. Name them Category Catalysts, divert category captain resources to them, and watch good things happen.