The new holy grail

The new holy grail

Bigger no longer means better, so how do FMCG giants adapt to shifting trends, asks John Stapleton?

John Stapleton was co-founder of New Covent Garden Soup and also launched Little Dish, which opened up the fresh, chilled, infant cuisine market.

Strong consumer insight is the key to unlocking a brand’s success in the FMCG world. Without it, it’s very easy to waste a lot of money trying to sell something to someone who doesn’t really want it. By the same token, staff insight and engagement are key to unlocking the ability to implement at speed – and take advantage of opportunities.
Over the last five to six years, consumers have demonstrated a lack of trust in what they perceive to be Big Food. A number of food scandals combined with a perception that large food and drink corporations do not either meet their needs adequately, or take their concerns seriously, have driven this change. Younger consumers in particular, feel much more can be done by Big Food to address their concerns about issues including wholesomeness; product health claims; sustainability; and use of plastic packaging. They identify with businesses aligned with their values. The businesses who do this best are typically smaller brands and/or start-ups.
This hasn’t gone unnoticed by Big Food. They are aware of how they’re perceived, and that they are not as agile as they’d like when responding to shifting consumer trends. A number of large UK and US food and drink corporations have set up their own accelerator programmes and in-house venture funds designed to find the next innovative consumer-driven idea to scale up. In essence, Big Food is eager to appear small – as Big is less trusted. Meanwhile, small food businesses are keen to appear big. They should not forget that being small suits the current consumer narrative and is often an advantage.

The uncertainty plaguing Big Food is creating a fertile ground for the smaller, more agile disrupters. Uncertainty is all around us, but this is where we can – as business leaders – take the initiative. By anchoring our major decisions in strong consumer insight (and useful data to underpin this), we can turn uncertainty into a competitive advantage. This is the essence of entrepreneurship. The trick is, not only start-ups and small companies can be entrepreneurial and develop an advantage in this way. Many large organisations claim to be entrepreneurial – but are they really? I’m convinced large businesses can derive many of the advantages of entrepreneurship and in so doing, compete for the attention and ultimately the spend of the more discerning younger consumer. This can be done by reversing the strategies adopted as a result of increasing globalisation (i.e. centralised decision-making driving brand consistency and efficiency). This is not perceived by the consumer any longer as a competitive advantage. Breaking down the component elements of decision making and delegating to the regions or local markets is essential to develop consumer insight that will bring products to market that resonate with the local consumer.

The Holy Grail is to develop brand values which resonate with the local consumer in an authentic way. The obvious disadvantage with this approach, not surprisingly, is that it takes time. Big Food however, has been active in shortening that lead-time by taking partial equity positions in entrepreneurial businesses, with the option to purchase the business outright at a later date. The original example of this was Green & Blacks and Cadburys and a later deal between innocent Drinks and Coca Cola was quite similar in its objectives. One very recent deal has involved Samworth Brothers taking a minority stake in Higgidy Pies. The idea is that this leads to a win-win. Small businesses get to leverage the resources and (very often) significant distribution channels of their bigger partner, while Big Food can get closer to entrepreneurial businesses – importing practices, relevant staff and culture. The agility to turn uncertainty into a competitive advantage is, as a result, more easily available to Big Food.

Sub-Editor
ADMINISTRATOR
PROFILE