Consumer-packaged goods (CPG) brands may be feeling a bit put-upon lately.
In Philadelphia, a sugary beverage tax went into effect at the beginning of the year. Facebook posts demonize GMOs. Millennials value brand experiences over products, which need to match their sense of purpose, says a Kantar report. Local brands are moving in on global ones, in terms of market share, Kantar also says.
So what’s a brand to do in this brave new marketing world?
Know the Facts
There’s what some CPG companies are hearing from outlets like U.S. Uncut, “a social justice-oriented digital media company,” that reported on a 2013 Oxfam study on Dec. 31.
“The ‘Behind the Brands’ report,” U.S. Uncut writes of the Oxfam study, “grades each company through a series of scorecards, gauging how attentive it is toward core issues like how it treats farm workers, women, small-scale farmers, local land and water supplies, its climate change policy, and a company’s transparency. By and large, the scorecards found that the so-called ‘Big 10’ food companies shirk their responsibility to local populations and the environment, falling far short of where they could be given their tremendous resources and influence. In some cases, Big 10 companies actually undermine food security, natural resources and human rights, according to Oxfam.” (Opens as a PDF)
While this is how some consumers are thinking and, therefore, buying, it’s not true of everyone.
For instance, three years after the Oxfam report, Coca-Cola (a Big 10 brand) is still No. 1 in the U.S. and around the world, Kantar Worldpanel found in May 2016.
However, the Kantar report notes that in CPG, which it calls fast-moving consumer goods (FMCG), there is some movement away from global brands like Coke.
“Local and regional FMCG brands account for 46 per cent of total FMCG spend in 2015 and over half of FMCG market growth (58 percent) is driven by local brands,” according to Kantar’s post about the research.
Within the Kantar report, Andrew Curry — director at The Futures Company — insinuates that Millennials care how a company does business. So this generation whose buying power grows by the day wants certain things from brands.
“I think we’ll see more emphasis on brands that are able to combine value and purpose,” he writes. “There is headroom for growth in areas such as health, fitness and general welfare. I noticed, amid those kiosks at train stations that sell chocolate and cigarettes, something called Protein Haus. All it sells is stuff that makes you feel better. That, for me, is the future for the Millennial FMCG consumption epitomized in five or six square feet.”
A section of the Kantar research talking about U.S. buying patterns says this: “There is a growth of consumers who are now searching for fresher, more sustainably raised produce, fresh meat and seafood. Whole Foods and other niche retailers like Trader Joe’s, which service customers looking for personalized, more mission-oriented buying experiences are thriving. Particularly in big cities like New York, high-end private label is going from strength to strength.”
So while some CPG brands may be tempted to stay-the-course in their marketing, others are paying attention to these consumer signs.
Think About the Message
While U.S. Uncut gets more into the sustainability message, Curry provides different advice about how to reach Millennials. He says they’re more concerned about the consumer experience than anything.
“One strategy is to rationalize: Strip back the dull stuff — the ‘basics’ — and beef up categories where there’s a bit of connoisseurship,” he says, “the ‘pleasure,’ the experience.”
However, CPG companies interested in the messages outlets like U.S. Uncut are sending are wise to note that some of the posts on social media sites do include recycled content that’s years-old, like the Oxfam study.
So brands could take into account the alarm consumers may feel reading this content and create strategies around it. For instance, U.S. Uncut claims “Companies are overly secretive about their agricultural supply chains, making claims of ‘sustainability’ and ‘social responsibility’ difficult to verify.” In response, CPG marketers could create content marketing efforts that display the organization’s transparency by making its sustainability and social responsibility messages readily accessible on social media and via shareable content written in plain language, such as blog posts.
What do you think, marketers?
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