CPG 2.0: CPG Brands Get Their Mass Kicked
Posted in Insights
“Consumer Packaged Goods” brand marketing is evolving out of the box, beyond the shelf, and into directly offering people something personally relevant to their experience.
Is this one of those annoying brand marketing articles that asks you to think of water, pet food, toilet paper, cactus juice, and soap not as “products” but as “experiences?”
No. It’s about how expectations of “Consumer Packaged Goods” have evolved out of the box, beyond the shelf, and into directly offering people something personally relevant to their experience.
Great Goods Go Direct
In the next 10 years, 90% of growth in CPG will go to brands that engage with customers directly. Old CPG brands are best at engaging supermarkets directly—reaching people through big media and distribution channels.
CPG’s historically been defined by high volume, low margin, low involvement, rapid consumption, mass distribution. But increasingly, the drivers of consumer preference are “special, different, authentic”.
Digital media has helped niche people’s attention, and their preferences. 20 years ago digital was 0% of CPG ad spend. Now it’s 50% (catching up to the 75+% other sectors spend). The category’s flooded with specialized options on which people spend more and buy less: in 2023, people spent 10% more on groceries but bought 4% fewer items.
Whether it’s a subscription box, a private label brand, or just a brand you feel connected to outside the channels where you buy it, the door is open for upstart CPG brands that have a direct marketing relationship.
People will always buy CheeriosⓇ and TideⓇ. But many “consumers” care about consuming less/more healthy, “packaged” is increasingly a bad word, and “goods” isn’t good enough. A Consumer Packaged Good needs to connect to a Personally Relevant Experience.
Packaging Personally Relevant Experiences FTW
Consumer > Person(ally):
70+% of subscription DTC products start with some sort of quiz. We used to sell you a giant bag of dog food on aisle 5 or TV dinners on aisle 2. Now, brands like BarkBox and HelloFresh start with “what’s your dog’s name?” or “are you pescatarian?” And AI-powered personalization is even making quizzes obsolete. Takeaway: Find a way to personalize. Email. Have a database; use it.Packaged / Convenient >Relevant:
The lifestyle/shopping patterns behind packaged convenience are still about meeting you where you are, except determined by the interests that drive how you use social, search, or shop with the Internet in your hand. Branch Basics and Blueland learned sustainable packaging overlaps with tons of interests—a way to make a run at the big P&G cleaning brands. Takeaway: Lean into 2-3 deeper, graphed interests (not just demographics)Goods / Products > Experience:
Start with how your brand fits into a customer’s life and all the product, service, content, community, events you deliver are in play. From crazy content or alt retail, to optimizing product listings, targeted ads on e-commerce platforms, or enhancing online shopping. Finding new times/places to try, buy, enjoy, repeat is how Dollar Shave Club or Dude Wipes disrupted men’s personal care. Takeaway: Map points of intersection with your audience’s lives to challenge the channels for experiencing the message and delivering the product.
A Deeper Brand of Thirst
No CPG category is busier than beverages. Endless options now vie to meet a basic human need: thirst. But brands that satisfy a deeper figurative thirst can engage people more directly, across more channels:
Lobos 1707: in the days of traditional media, the mass awareness of attaching to mega celeb Lebron James might have ensured sell-through to store shelves. Today, people want real life connections, like heritage, innovation, and artisan craft. Those themes play out in a multi-channel strategy focused on first-party brand awareness and web traffic, prospecting, and social following growth. Motion-driven creative, elevated look and feel, sending “trust signals” via award highlights and, of course, measurably testable ideas–across audiences, creative, geo-targets, and channels to include social, search, and YouTube, for measurable brand lift. Read More>>
Local Motion: A compelling personal back story about a diabetes scare helped carve a niche as women-owned, no sweetener alternative to sugary seltzers, for those who celebrate life in motion. A “Drink Simple” go-to-market strategy endeared the brand to the fast-growing, health-conscious, active living audience with grassroots DTC marketing online and off: sports and music events, a robust calendar of boosted Meta creative for increased reach, outreach to select ambassadors with like-minded audiences, sampling via alt retail, and highly engaging sampling kits for trade/press. Rinse and repeat for a year then take a loyal following to big box retail. Read More>>
Oatly: wins with a bold, unconventional brand focused on sustainability, the growing plant-based movement, disruptive wabi-sabi design, and a high-profile legal battle over the phrase "Post-Milk Generation.” Maybe the most important factor behind Oatly's success is its ability to market itself beyond its product benefits by incorporating self-deprecating humor, social issues, and even art into its social and advertising presence.
Olipop's: brand genius lies in a blend of nostalgic and functional. Their packaging has the feel of classic sodas, making them instantly familiar. And they've positioned themselves as a “Trojan horse for health,” appealing to both wellness enthusiasts and soda lovers. They lean heavily on TikTok for influencer marketing and organic content creation, fostering a community around gut health that expands into Instagram and YouTube. The brand’s come on so strong it’s taken strides to own the word “pop” in search.
CPG’s End of Shelf Life?
The question for big CPG brands is whether they will capture changing mindsets and growth in their categories by innovating. Or will corporate P&L pressure limit them to yesterday’s formula while small brands grab the growth?
The answer so far: 2002’s global Top 50 Brand Ranking included eight CPG brands. By 2022, there were 2 left.
Looks like there’s a vacancy for 6 bold brands.
Some Sources:
https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/rescuing-the-decade-a-dual-agenda-for-the-consumer-goods-industry
https://bedfordconsulting.com/four-consumer-trends-that-the-cpg-industry-cannot-ignore-in-a-post-covid-world/
https://explodingtopics.com/blog/cpg-industry-trends
