LESSONS IN FOOD. HARLEM PARK TO PARK 7.23.2020
2008 - 2017 Forager + Global Director Local Brands & Product Innovation
2018 - 2019
ALMANAC 2018 - 2020
According to Nielsen, 80-85% of Fast Moving Consumer Goods (FMCG) - or CPG - companies fail.
Source: https://www.nielsen.com/wp-content/uploads/sites/3/2019/04/setting-the-record-straight-common-causes-of-innovation-failure-1.pdf
Top 3 Causes of Innovation Failure 1.
Failure to create strong market fit - introducing goods and services not driven by consumer demand.
2.
Providing an inadequate product experience.
3.
Lack of sufficient marketing.
While this seems like a disheartening intro, it’s important to understand how we arrived at the landscape today - by looking at retail and the CPG movement of the past decade.
2008. Last recession. Grounds set for innovation.
CPG since 2008. Began with purpose and good intention: challenge legacy brands with better products, cleaner ingredients, higher production value and attention to supply chains. Whole Foods Market - the Local Program - supported the launch of thousands of brands.
AGE OF THE ARTISANAL
Products like Justin’s, Pipcorn, Sir Kensington’s, & Rao’s defined a time period. “Small-batch” foods took storm. Whole Foods’ opening of the first Brooklyn store alone introduced over 75 new brands.
AGE OF THE ALTERNATIVES A pivot toward the “alternative”. New & different options from the traditional.
AGE OF SCIENCE & “SOLUTIONS” Products developed to combat climate change through bio-tech
Compounded by Influx of $$ $1.45B was invested in the food and beverage product sector in 2018 alone. $17B shifted from large US CPG industry players to small ones since 2013. Corporate VCs were highly active: Mondelez “Snack Futures”, 301 Inc., Coke’s VEB, Amazon Launchpad Premier
The industry lost its way. Expo West 2020, set to draw 85,000 people and 3,600 brands from over 132 countries globally was cancelled the day before it was set to begin. Now, a shift.
FOOD: 2020 In terms of the food industry - there are forces to keep in mind as you think about your business in navigating COVID, now and into the future. Some forces had origins and tailwinds before the pandemic, they were bubbling up to reveal a glut of products in certain categories, and a need for simplification or stripping down of assortments. Some factors can’t be overlooked and are debilitating - for restaurants, bakeries and food service businesses - whole new tactics and business model might be needed.
An Ever-Changing Eater
"Clean eating" - a new diet category added in 2019 is the most widely-cited diet followed 2
1 in 4 consumers ate more plant-based in 2019 but many are confused on the actual definition of the term 1 SOURCES: IFIC Foundation’s 2019 Food & Health Survey IFIC Foundation 2019 Food & Health Survey Whipstitch Capital Healthy Living Consumer Products:Industry Update, Deal Review and Top Trends Food Navigator USA
90% of U.S. plant-based consumers also consume traditional meat and dairy 3
50% of American consumers typically purchase both dairy and plant-based milk alternatives 5
Ever-Changing Eater & Eating Eating and decisions made around food have never been more nuanced or complex. To separate consumer purchases from environmental impact, personal health, and flavor - is a misunderstanding of America’s food culture. More thought and consideration impacts how we make food choices than ever: now, layer in public health/immunity/distancing.
Future Guidance 1. Remember the 80-85% failure rate. 2. Effective Marketing. 3. What brings true value? 4. Flexibility & resilience is critical. 5. Look to focus and narrow in on your customer to wade through the storm.
80-85% failure rate. Food companies are tough business. In order to succeed look at what you’re offering your customer base. What’s the winning proposition? (Flavor, taste, ease, health, price or tradition)? Has any of that changed since COVID? Should you be optimizing your menu or product assortment to those things not easily made at home? Are you listening to what your customers tell you and doubling down on what’s working? Have you looked at alternative channels (non-traditional retailers): ecommerce, convenience, restaurants opening marketplaces?
Effective Marketing. How are you reaching your customers, especially now? Have you considered Amazon or building out an ecommerce / Direct to Consumer platform to build new sales? Are you using digital effectively: Instagram, Facebook and Google? Are you in your neighborhood and surrounding neighborhoods to get out the word you’re open? Or delivering?
What brings true value? Have you thought about your value proposition and whether it still holds up as effectively? Have you changed your sizes, your offering, your packaging, or your availability to meet new consumer needs? Have you adjusted to retailer’s requests for new pack-sizes or asked for their insights around customers, store traffic, etc.? have you had to discontinue Food Service sizes and where do you build new business?
Flexibility & resilience. How have you been able to weather this storm and cut your losses? Are there new partnerships to form? New areas of business (Frontline workers, delivery at home) to tap? Don’t be afraid to try new programs or ideas as a test (without investing too much time or resource). Learn from other people in the industry - what’s working, what new programs and opportunities are becoming available (whether PPP loans, small business assistance, diversity programs) and what are truly worthwhile.
Look to focus and narrow in on your customer. Not all food businesses need to grow the way Impossible Foods has, or RxBar. Narrow in on who you’re looking to serve and do it really well, very efficiently. Is it your community here in Harlem? Is it New York City alone? Is it national and through ecommerce with targeted promotions? Know your goal and go after it. Be aware of retail requirements and how you may want to skip right past the traditional path to growth.
Brand Resources
Branding / Marketing / Digital Agencies: Lauren Olivieri: https://www.laurenolivieri.com/ (Freelance Graphic Design) Sara Wilson Projects: https://www.digitalcampfires.co/ (Digital & Community Builder) Interact Boulder: https://interactboulder.com/ (Brand/Creative Agency) LMS Marketing: https://www.wearelms.com/ (Digital / Influencer Agency) Communal Creative: https://communalcreative.com/ (Brand/Creative Agency) Studio Simpatico: https://studiosimpati.co/ (Website Design) A Studio: jack@wearea.studio (Brand/Creative Agency)
Ops Resources Fulfillment / Ecommerce / Finance : Brand Driver: https://branddriver.com/ (3PL) Flexx Logistics: https://flexlogistics.com/third-party-logistics/ (3PL) Dot Foods: https://www.dotfoods.com/ (3PL) Stage 1 Financial: https://stage1financial.com/home/ (Outsourced Finance) Propeller Industries: https://www.propellerindustries.com/ (Outsourced Finance)
Amazon 3rd-Parties: https://beekeepermarketing.com/ https://rightsideup.com/our-services/
Alternative Channels Good Food Virtual Crafter Fair: https://goodfoodfdn.org/mercantile/virtual/retailers/ Snack Nation: https://snacknation.com/ Hungryroot: https://www.hungryroot.com/ Our Harvest: https://ourharvest.com/ The Goods Mart: https://www.thegoodsmart.com/ Pop-Up Grocer: https://www.popupgrocer.co/ Imperfect Foods:
https://www.imperfectfoods.com/
Gold Belly: https://www.goldbelly.com/
Contact: elly@almanacinvest.com