Overcoming the Challenges Facing Consumer Packaged Goods Brands

It takes perseverance and skill for brands to continue growing and thriving in the consumer packaged goods (CPG) industry (known as the fast-moving consumer goods (FMGG) market outside the US). We’ve seen names like Coca-Cola and Heinz persist as stalwarts for decades. These brands worked hard to tie their names to the idea of quality and the fact that they fill a need in the lives of consumers. Maintaining a balance between the need to adapt while staying true to their core values can be difficult. 

If you’re an established titan of the fast moving consumer goods industry, how do you stop yourself from becoming stagnant while new competitors bite at your heels? For up-and-coming brands, what should you do to get past the hurdles that often take down new companies before they have a chance to establish themselves? What does the future hold for CPG brands, and what can they do to make sure they remain at the forefront? 

Biggest Pain Points for the CPG Industry 

What’s hindering CPG brands from achieving future growth in the market? Let’s look at some of the obstacles holding many companies back. 

1. Shifting Consumer Habits

Consumers put a higher priority on issues like sustainability, and the impact companies have on the environment. They’re looking for brands who place emphasis on social consciousness and offer healthy alternatives. Customers care about the ingredients used to make both the product and its container. 

There are a lot of opportunities present for brands in this specific challenge. Nielsen predicts that the sustainability market should reach $150 billion by 2021. Consumer packaged goods brands must figure out how to balance that pressure from customers with the reality of what sells in the marketplace. 

2. Changes in Selling Channels

There have never been more ways for consumers to purchase their favourite products. They can learn about new brands while browsing their Facebook feed or see promotions from an Instagram influencer. The rise of voice search means they can start the process of purchasing through voice search on a mobile device. A study from Voicebot shows that 20% of consumers make voice searches part of their purchasing process. 

Brands must make sure they keep up with the shifts in how consumers make purchases as people move away from the brick and mortar experience. It’s not just about selling the product but creating a compelling customer experience that keeps their audience coming back. 

3. New Niche Competitors

Industry giants find themselves facing more competition from smaller competitors willing to offer consumers a more personalised, premium experience. In addition to traditional retailers establishing private labels in the consumer packaged goods space, many online direct-to-consumer services are introducing new products into the market. They make things convenient for customers by removing the middleman, streamlining the purchasing process. 

CPG brands must find a way to compete with the agility of these new startups targeting. Consumers are showing a willingness to spend more and wait longer to receive their desired level of customisation. In the face of this kind of challenge, a hyper-focus on managing the margins and casting a wide consumer net may ultimately hinder a fast-moving consumer good’s long-term growth. 

Leveraging Platform Thinking 

It’s not enough for CPG brands to understand the barriers in their way. Something needs to change. Platform thinking helps organisations redefine strategies that help them work through the links between businesses and customers. It’s about leveraging creativity in coming up with strategies that drive growth and reinforces a brand’s image in the minds of consumers. That kind of connection keeps them coming back to those products even as other habits might change. 

Essential Elements of Platform Thinking 

Platform Economics  

Brands need to examine the data that tells them more about the dynamics at work between customers, other participants, and the market itself. That data should form the foundation of a new business model capable of scaling for future needs. 

With this information, brands get a head start on recognising trends currently resonating with consumers. They have the chance to adapt communication strategies and other outreach initiatives that keep them top of mind with potential customers while navigating changes in the marketplace. Those efforts help forge connections consumers remember and help build brand loyalty. 

Platform Purpose  

A consumer packaged good brand must be able to define its purpose to consumers when staking out their position in the marketplace. They should take the initiative in controlling how customers and competitors perceive them. 

That’s extremely helpful for brands who want to ward off attempts by other competitors to cast them as out-of-touch or indifferent to the concerns of customers. Having and sticking with clearly defined values makes it much easier for brands to control how consumers perceive them. It also helps thwart attempts from other market players to undermine their image. 

Platform Dynamics  

There needs to be consistency in the messaging and sales content put out by a CPG brand. Coordinated marketing effort should make clear to customers what to expect when they interact with a business. 

It may help to think of this as a culmination of platform economics and platform purpose. Brands are using the data collected about consumer trends to communicate what that brand stands for and the positive impact of their products and services. Customers should get the same message from every channel through which they interact with a brand. 

The Importance of Interaction Fields 

Building interaction fields help companies define how they can create a full experience for customers. Fast moving consumer goods should consider every possible way a customer, partner, or other companies might interact with their company. Interaction fields help businesses see these links and come up with business and brand strategies that optimise those connections for an organisation’s benefit. 

Customers should take top priority for brands as they build out interaction fields. That starts with examining how they connect on digital and social networks, which ties back to the platform economics element of platform thinking. Those finite details give valuable information about consumer needs. 

From there, work on creating more personalised consumer experiences. It’s important to understand the patterns of customer behaviour so that you can focus on the impact of your product in their lives. Make sure your marketing targets the channels through which they like to engage. 

Taking a 360-Degree View of the CPG Industry 

Consumer packaged good brands should take a long view in solving marketing problems. They must consider the entire range of possible solutions when answering questions about branding and innovation. Companies should address the following when trying to work through complex issues. 

• Thinking about the position of a consumer packaged goods brand in the future 
• Considering new avenues for marketing that will allow for exponential growth 
• Coming up with storytelling concepts that showcase a brand’s values 
• Design unique experiences that appeal to consumers 
• Thinking of how ideas will work with practical business operation concerns 
• Turning the strategies into viable marketing concepts 

Six Strategic Opportunities for CPG Brands 

Let’s examine some opportunities for brands looking to use platform thinking in revamping or regaining control of how customers and competitors view them. 

1. Remain Relevant in the Lives of Consumers

Having a strong platform purpose is key to helping brands establish why they should be the top choice for consumers. Staying true to a core identity is more important than trying to fit into a momentary trend that doesn’t represent your company well. It only confuses potential customers looking for a brand they want to stick with for the long haul. 

CPG brands looking to stay true to their values should maintain consistency in their voice even as they try to expand their core audience and position themselves for future growth. The focus while creating interaction fields should be on innovating at the level of business and brand strategy versus the product level. Examination of the purchasing patterns of consumers can go a long way toward locating new avenues of integrating products into the lives of potential customers. 

Nestle 

Nestle’s 150-year old Buitoni brand found themselves struggling to stay relevant in the lives of customers. They found the idea of cooking the pasta to be complicated and had difficulty locating it in the refrigerated section of supermarkets. By doing a deeper dive into what their consumers wanted, they figured out how to showcase how their pasta could enhance the lives of potential customers.

Buitoni worked to appeal to food lovers who might want a more refined product. They also expanded advertised the health benefits of their pasta to attract those looking for better food alternatives. Those efforts eventually paid off with double-digit growth for the CPG brand. 

Remember, maintaining relevance to consumers is an ongoing process. Brands must commit to putting in the work building and maintaining trust between themselves and customers. That’s the difference between CPG offerings that burn out quickly and those that stand the test of time. 

2. Form Stronger Connections with Customers 

CPG brands looking to forge stronger connections with consumers should emphasise engagement to their preferred territory. That also ties into maintaining relevancy by showing a willingness to adapt to what audiences want. All communications should keep the same voice when it comes to communicating brand values. Staying consistent helps customers understand what your brand represents, which strengthens bonds of trust. 

Tyrrells Crisps 

Tyrrells Crisps figured this out when they had trouble translating their distinctly quirky humour in digital media. They worked to address the disconnect by created robust customer profiles to gain deeper insights into their audience’s interests, values, and online behaviour. That helped Tyrrell Crisps come up with the concept of “Entertaining Eccentricity”, a way of encouraging audience members to embrace what made them stand out. 

The company expanded upon the idea by creating an insightful content calendar and media plan. It put the Tyrrell Crisps brand front and center in front of the right people, at the right time, on social channels. Revolutionizing their approach to digital media with less content sent in a targeted way helped Tyrrell Crisps deliver a higher-quality product that proved highly successful. 

Employing a more reactive approach allowed Tyrrell Crisps to be more agile and “newsjack” when relevant. Changing their approach helped the company achieve a 1,200% increase in engagement, reach more than 200k new customers, and receive a 25% engagement on reactive content against a benchmark of 7%. 

3. Remain in Control of Your Brand’s Narrative

One of the most critical elements of good marketing is telling engaging stories. Keep all storytelling efforts rooted in reality while maintaining a tone of sincerity. Don’t be afraid to surprise your audience from time to time. Keeping things interesting helps drive excitement in your customer base for times when you’re ready to launch a new product. 

Pepsico

Pepsico needed a way to shake things up and change the perception of their brand. They looked for ways of driving new demand by telling simple, appealing stories that showed how their products could benefit the lives of consumers. They also wanted to work on appealing to a diverse global audience and making people remember why they were considered a pop culture icon. 

They created campaigns that appealed to different markets while staying true to the Lay’s brand. They started a “Bring Happiness Home program” that marked the Chinese New Year by encouraging consumers to reflect on their families in self-shot videos. 

Pepsico also worked to change how label-adverse Gen-Z users viewed them by removing its logo when it advertised or mentioned the brand through digital ads, social media, and TV. They created a custom Snapchat Lens that let users create chip-like triangles of their face. That encouraging organic user-generated content for the brand that allowed them to track the popularity of their efforts. 

When you control your narrative, you strengthen your ability to compete on your purpose. That gives FMGG brands an edge over competitors in the marketplace. 

4. Create Solutions for Niche Audiences

People like what they like, and it’s on CPG brands to pitch them products that meet their needs. It’s easier than ever for people to find brands willing to service niche audiences. Established brands must figure out how to continue driving global profits while not overlooking this lucrative market segment. 

Pitching to more specific groups of people is an opportunity for businesses to save money while establishing themselves as an authority in that niche. Platform thinking can help brands identify often-overlooked niche audience opportunities and develop a positive reputation. 

One positive interaction from a customer in that sphere could lead to organic promotion among their friends and family. Connecting to the right consumer segment could mean a lot of repeat business thanks to CPG brand loyalty. 

Del Monte 

Del Monte managed to accomplish this through a campaign that highlighted its relationships with farmers. They created ads touting the natural ingredients used to make their products and emphasised their support for family farms. It was a new way to appeal to those who might typically bypass purchasing packaged fruit. 

Niche audiences also present an opportunity for brands to reach out to new customers without encountering a lot of competition. Achieving success in a specialised audience space requires collecting metrics that offer intimate insights to form the foundation of better marketing strategies. 

5. Take Chances on Disruptive Innovation

Disruptive innovation isn’t just about making sure you’re doing something different than your competitors. Solutions from FMGG brands need to target unmet needs of customers. Platform thinking can help brands uncover what consumers desire and communicate how their company can provide what they are missing. 

Oreo 

Oreo does this by expanding the variety of flavours offered to customers. While they continue focusing on their core products, they aren’t afraid to experiment with unexpected taste combinations. They actively solicit feedback from audiences while making sure to coordinate communications among different social media and marketing channels. The resulting anticipation for new Oreo types helps them achieve continued growth. 

Innovation should be part of every workflow instead of something trotted out for marketing purposes. That helps companies break the incremental mindset that can hinder their ability to pursue growth opportunities and strengthen business prospects. 

6. Make Employees Feel Like Part of Something Bigger

Happy workers make for a strong company. Businesses should look for people ready to help the company build upon shared values. Employees want to feel their company is working to make the world better, not just existing to make a profit. Platform thinking also applies when uncovering issues vital in making the workforce happy. 

Clif Bar Company 

Clif Bar Company owners had the opportunity to utilise private equity to protect the interests of their business. However, the energy food company didn’t feel that would be optimal for their employees. Instead, they went with an employee stock option program (ESOP) that allowed workers to invest in the business while providing them with a tangible, long-term benefit. Taking that direction put them in line with the core values of the company. 

Ask employees about causes important to them and work them into the company environment. Listen to them when they make recommendations on improvements that could raise a CPG brand’s standing among external customers. 

When workers feel you have an investment in them as people, it increases their desire to help the company succeed. They can become valuable resources when it comes to driving new ideas and agile transformations in the workplace. 

Learn to Overcome Your Brand Transformation Challenges 

Vivaldi prides itself on embracing forward-thinking solutions that help brands meet their full potential. Find out more about the benefits of platform thinking and how it could revolutionise your organisation by setting up some time to talk. We can help guide your CPG brand to new heights.