Ripe for Innovation
Twenty opportunities to turn your company into an innovation powerhouse
The New Day-Part: Pre-Breakfast
Having a quick nibble to eat before, say, getting to the office to have your oatmeal, has increased 15% in the past three years, according to The Hartman Group. So keep an eye on what consumers are buying on the way to work, and whether any CPG companies pick up on this blip on the trend radar.
Customization Turns to Curation
Chipotle and Coke Freestyle have superchargedthe consumer desire to “have it my way,” and nowcustomization has become an expectation.“Consumers are expecting more value for theirdollar. And I think a bad economy is a great way tospur that innovation,” says Eric Stangarone, creativedirector of The Culinary Edge, San Francisco.
But could customization jump the shark? When doeschoice become a burden? Hyper-minimalized burgerjoints such as Five Guys, with just a few options on itsmenu, is one example of the countertrend against toomuch customization. “For every disco movement there’sa punk movement,” says Stangarone.
But what’s even more interesting is an adjacenttrend toward “curating” an experience—bestexemplified by the boom in subscription-based mail-deliveryconsumption. It began with companies suchas Birchbox, which sends consumers sample sizes ofhigh-end beauty products that they can then buy ifthey like. The concept has spread to beer, clothing,coffee and—most notably in our industry—snacks.
The “curation” comes in that the user reviews theproducts online. The company then adjusts what itsends out each time based on users’ preferences.Eventually, you have a box of products landing atyour door chosen just for you.
How might this curated consumption translate tothe c-store? Expand the concept of a bundled offerand consider “grab bags” of a few products, pairingwell-known favorites with newer items to helpincremental sales. Create signage that focuses onconsumer need states, such as a woman who needsa protein boost, or a gluten-free male just back fromweightlifting. (See “Food as Pharmacy,” p. 24.)
It seems there’s some science behind the proliferation of protein-packed products. “The dietary need for protein may in fact be greater than we’ve been thinking for the past 20 years. There are other uses than what we talk about, benefits other than an energy source,” says Janet Collins, senior manager at DuPont and president of the Institute of Food Technologists (IFT).
Busting Down the Silos
The snacking phenomenon is not just changing the way we eat; it’s also changing how companies do business.
One-quarter of consumers eat four to five mini meals per day, and 21% simply grab food or drink whenever the opportunity arises throughout the day, according to Chicago-based IRI. Consumers don’t differentiate between the products in their pantry and those on the take-out menu—CPG vs. foodservice—and neither should brands.
“This is a tremendous growth opportunity for the CPG industry,” says Susan Viamari, editor of IRI’s Times & Trends. “Restaurant industry growth is outpacing CPG industry growth by a sizable margin. By adopting a focus on winning ‘share of stomach,’ rather than just share of CPG spending, marketers can adjust their analyses and strategies and reap significant rewards.”
The same conversation is happening on the other side of the aisle. “Food manufacturers are in a prime position because they own the brands that operators and retail/grocery sell to consumers,” says Oberkfell of IFMA.
Some manufacturers have already taken action. Minneapolis-based General Mills recently retired its Bakeries & Foodservice unit and relaunched it as Convenience & Foodservice. “Our c-store customers want to grow in foodservice, and our foodservice customers see convenience and snacking as a huge growth opportunity,” says Mike Burris, channel marketing manager. “We’re breaking down the barriers to ensure that structure doesn’t impede the ability to deliver that expertise to our customers.”
While c-store retailers can expect to see shifts in strategies from their CPG and foodservice partners, they should likewise looks for synergies between their own snack, beverage and foodservice categories.