According to Thomas Heath writing for the Washington Post, an interesting anomaly is taking place in the brand world. Older big brands are taking off …again. This is a trend we didn’t see coming, but we should have. When people are uncertain they seem to gravitate toward the perceived certainty and comfort of familiar, good ole American brand standards like Cheerios, Quaker Oats, Goldfish, Oreos, Campbell Soup and Doritos.
Chris Growe at Stifel Financial says, “We’re seeing significant market share gains for the most dominant brands.”
Heath points out supporting data from market researchers, The NPD Group, that “80% of the kitchen electric categories it tracks showed year over year growth in March as the pandemic took hold, and that more than two-thirds grew by double digits for such gadgets as hot plates, waffle irons and sandwich makers.”
So, what does all this mean for new brand builders from our perspective?
First, we think this big brand gain is an initial bump, not necessarily a trend in the buying patterns of the shelter-in-placers. Why? Because as the pandemic grinds on and people are scared to go to the doctor’s office, they will be forced to take more responsibility for their own health.
That means watching what they eat, exercising more, and choosing healthy products. In other words, the knee jerk reaction was to go back to the familiar brands that made them feel comfortable and to pretend that there is still some sense of normalcy. But there is increasingly less normalcy.
That may not be such a bad thing for new consumer brand builders keen on selling products that are going to help the shut-ins take better care of their own health. Interestingly, the same forces that keep them from the doctor will conspire to keep them out of the grocery stores.
As incompetence and chaotic response to the virus begins to manifest itself in new waves of outbreaks in time bomb like detonations, people will stay away from the stores in increasing numbers. They will be shopping online at an increasing rate.
This is the opportunity for new consumer brand builders who could not secure decent bricks and mortar distribution in the first place. This is their chance to appeal to the new and growing ethic of taking responsibility for one’s own health!
How can your brand help? How can you get the word out? How can you achieve fulfilment and online distribution to offer healthy alternatives?
When we were in the wine business, the majority of sales were through bricks and mortar liquor stores. Wine is a heavy product. Basically it is liquid and glass, two heavy substances. As such, it had to be distributed to the stores by trucks from airconditioned warehouses. Just the physical reality of the product enforces the so-called three-tier system: producer, distributer, and retailer.
One lesson online fulfillment houses and online retailers can learn from the wine business is how the distributers in the wine business maximize their efficiency and reduce their cost of delivery. They do not just deliver one specific brand at a time to the retail store; they actively promoted every brand they have in their warehouse to increase sales per delivery.
Now let’s apply that concept to fulfillment houses where they sell direct to consumer. What else could they be delivering in that same box? Can they help your new consumer product brand get the word out about your products? And what about fulfilment houses that specialize in, say, heathy products? Why couldn’t they help promote yours to customers whose purchases indicate they are taking more responsibility for their own health?
So, bottom line, the virus is effecting the market in different ways at different times. The ultimate trend is online shopping for healthy products. Don’t worry that the Big Boys got the first bump! We are going from “I want a brand I know,” to “I want a brand that keeps me healthy!”
Stay safe. Stay healthy, body and soul.
