It’s been a minute since the last Culture Matters. So much so, that we’ve had two great guests on the 3 Squares podcast. A few weeks ago, Anton Vincent, president of Mars Wrigley North America stopped by to talk to us about everything from candy to pet food. Then, last week and just in time for summer , 2X James Beard-winning author Adrian Miller spoke with us about his book Black Smoke: African-Americans and the United States of Barbecue. If you’ve got upcoming holiday roadtrips and gardening to do, consider taking a listen and subscribing to 3 Squares. Interested in adverting on the podcast?—email me at kevin@malachite-strategy.com
The Summer of Swicy
Planter’s, now a Hormel brand, has launched a new line of sweet and spicy dry roasted peanuts. The nuts are lightly salted and tossed with honey and dried red chilies. The nuts will be available in 16-ounce bottles as well as in 1.75 oz snack sizes.
Blue Diamond has announced the launch of four new products, two additions to their current Bold line and two products creating a Mash Ups offering. The new Bold flavors include a Korean Barbecue and an Elote (Mexican-style street corn) The Mash Ups include Dark Chocolate and Chili Pepper and Cinnamon and Maple. Maya Erwin, vice president of innovation and R&D at Blue Diamond told Food Business News, “…we’ve identified a growing demand for global flavors tied with savory sweetness ranking as the fastest growing snack category over the past year.”
As part of their 57 Collection, Heinz has released an Infused Honey with Hot Chili. The line also includes a Black Truffle Infused Honey as well as Culinary Crunches (Chili Pepper Crunch Sauce, Mandarin Orange Miso Crunch Sauce, and Roasted Garlic Crunch Sauce). The products are available at most US retail grocery stores.
Snack company Hot Monkey Nuts showed of a new line of chocolate bars at the recent Fancy Food Show. The company will soon be offering three bars that combine their signature spicy peanuts with sweet ingredients. Raging Monkey Bar (white chocolate berries, peanut butter chips and Carolina reaper pepper), Manic Monkey Bar (dark chocolate, caramel, peanuts, espresso beans, ghost pepper and Carolina reaper pepper) and Twisted Monkey Bar (milk chocolate, pretzels, peanut butter chips and habanero pepper).
So What? The spicy and sweet combo (dubbed ‘swicy’ by some) seems to be finally going mainstream. After years of people hoarding Mike’s Hot Honey and putting it on anything that doesn’t move, companies are coming around to the broad appeal of this combo. Why didn’t it take off sooner? Likely because ‘spicy’ always seems polarizing and limiting to big brands if that isn’t already their thing. ‘Spicy’ often makes marketers think the product won’t be all-family enough or appeal to specific demographics.
However, what’s more interesting to me is why this combination sparked with consumers in the first place. A few reasons come to mind. First, adding spicy to sweeter products makes them more adult and sophisticated. Outside of a drizzle in tea, few adults are reaching for honey at mealtime, but adding heat made honey the must-have condiment for fried chicken and pizza. Second, I think the sweetness threshold of some consumers has decreased in the last decade. What once might have been considered well-sweetened is now overly saccharine. Adding heat tempers the sweetness and makes these products feel less one-dimensional. Lastly, sweet heat products are often more complex than their separate parts, making consumers feel like they’d reached a new level of flavor.
It’s Not Your Imagination, Your Job Is Getting Harder
A few weeks ago, I gave a keynote to a large investment group anxious to understand the future of CPG. While the audience was keen on current innovation strategies and consumer trends, the biggest response I received was when I spoke on the role of tech in the industry. Most analysts assumed that technology was an overwhelming positive for CPG, with modernization leading to a new era for the food industry. Instead, I explained, its much more complicated than that.
Technology (both inside and outside the industry) has made our jobs harder. That doesn’t mean that technology won’t be a net positive in the end, with stronger brands and better innovation, but the transition is proving difficult. Here are three examples I highlighted:
Niche Consumers + Context Collapse
I was in a meeting with a client awhile back where they showed me research where they had identified 36 unique consumer groups and subgroups that might be a target for their upcoming campaign—36! I remember when having six distinct psychographic targets (usually with alliterative names like Striving Singles) was state of the art.
Today, not only does data allow us to carve consumers into finer and finer subgroups, but consumers themselves have dispersed into niche factions thanks to social media. However, finding a message that resonates across these groups is extremely difficult, if not impossible, because each community has a specific tone, language and in-jokes. Brands that aren’t careful (and even some that are) must eventually deal with context collapse where messages intended for one group are encountered by another, which invariably leads to confusion, misinterpretation and occasionally anger.
All of which begs the question, is there really such a thing as a mainstream brand anymore? Or are there really only brands that are held up via the support of hundreds of niche consumer groups that must be constantly cultivated with carefully constructed, unique messaging campaigns?
Data Firehose + AI Overconfidence
While big data is currently touted as the secret to more successful innovation, I’m finding that the opposite is typically true for companies. In the past, data was a precious commodity, carefully selected, purchased at great cost, and ravenously devoured. Contrastingly, today data spills into our inboxes by the gigabyte.
You would think that this would make the risk and uncertainty of innovation easier to overcome—that was the selling point of big data in the first place, right? However, what I’m seeing is that the sheer volume of data is causing teams to become mired in even more doubt. The fact that everything can now be (theoretically) measured means that everything must be measured prior to action. StageGate criteria has gone from a handful of metrics to dozens of minute details.
Much worse is that innovation teams have turned to a new breed of agencies that promise to save the day by organizing this firehose of data using the ‘magic’ of AI. They take advantage of the reality that middle management doesn’t have the capacity to analyze their own data but are on the hook from the higher-ups to consider every trend and report. Therefore, they turn to these companies who produce impressive infographics—perfect for showing the C-suite—that appear to transform the ambiguity of new product innovation into obvious answers.
Of course, the problem is that there are no obvious answers. Those beautiful graphics made with (***waves hands***) Artificial Intelligence take advantage of our desperate need to avoid uncertainty and look for black and white solutions. They prey on our belief that if you put a number on something, it somehow becomes more definitive, even if those numbers aren’t really backed up with anything tangible (seriously, always ask to see the raw data behind those impressive scattergrams and bubble charts).
More data is great for innovation, but only in the fact that it helps us understand the situation and think better about potential solutions. It doesn’t erase the need for us to think hard about the problem and it doesn’t remove the ambiguity. Risk will always be part of the process and anyone that tells you different is just selling digital snake oil.
Are there good companies out there using AI to help us make sense of our data? Absolutely, and you can spot them easily because they aren’t promising magical results. Instead, they are just a new tool to use while we make hard decisions.
Alarmed Consumer + Exploration Tech
With the aid of ‘Dr. Google,’ we all know that consumers now consider themselves the experts on any issue (or non-issue). Together with the echo chamber of social media, we see consumers getting increasingly concerned about every ingredient and process that goes into making food/beverage products.
However, this increased concern does not come with a decreased expectation of taste, cost or convenience. In fact, consumers feel that the ‘cleaner’ and more natural a product is, the better tasting it should be—regardless if it needs to make its way through distribution and a 60-day shelf-life.
This is why we are seeing corporations like Mars Wrigley partner with companies like PIPA that use bioinformatics to look for novel, natural ingredients that are healthy, tasty and functional. However, it will not be easy or inexpensive. Instead, we are in a race to get ahead of consumer concerns faster than they have them.
The Dirt on Dirt (i.e., Marketing Sustainability and Regenerative Ag)
General Mills announced two weeks ago their intention to invest $3 million in a partnership with Ecosystem Services Market Consortium (ESMC) to expand and scale their farmer benefit program, Eco-Harvest, into a multi-year initiative. The program rewards farmers for improving soil health on their land, via techniques such as cover crops and reduced tillage. With the goal of enrolling 500,000 acres of US farmland by 2025, the program uses advanced tech to verify when farmers use sustainable practices that reduce the amount of greenhouse gas emitted, the amount of carbon removed from the soil and the impact to water quality.
Country Crock (owned by the Dutch company Upfield) has been slowly transitioning from a classic margarine brand to a plant-based brand. Together with the recent launch of plant butters and plant creams, the brand has repositioned messaging toward substantiality. To that end, the brand has started The Cover Crops Project to help educate and support farmers in enacting more no-till practices to “improve soil health by returning nutrients, minimizing pests, and increasing water retention.” The brand’s creative agency (Ogilvy) created Cover Crop Whiskey (a limited-edition, “oh so buttery smooth” rye whiskey) to help bring awareness to the brand’s efforts.
Patagonia Provisions has launched Kernza Pils beer in partnership with Dogfish Head Brewery. Kernza grain helps draw down carbon from the atmosphere and sequester it in the soil, plus its 12ft long roots help maintain soil stability and prevent erosion. All of which builds on Patagonia Provision’s mission to find “Everyday Food Solutions for People + Planet.”
Kraft-Heinz has announced that they are partnering with Pulpex to develop a paper-based, renewable, recyclable bottle made from 100% sustainably sourced wood pulp. While currently only a concept, the company says that efforts are underway to work toward the goal to make all their packaging globally recyclable, reusable or compostable by 2025.
Back in April, Walmart launched their Circular Connector, a digital initiative asking for packaging producers to submit their sustainable packaging ideas/products to the retailer for use in their private label brands. This initiative is directly linked to the retailer’s goal to goal to achieve 100% recyclable, reusable or industrially compostable packaging by 2025.
So What? For years, I’ve watched CPG companies try to find the right words to sell gut health to consumers. The benefits are easy enough to understand and universally desired (e.g., better digestion, gut-influenced health effects, etc.). However, the reasons to believe are difficult to communicate. Marketers must convince consumers that bacteria—something they’ve been taught to fear—can be good for them.
Interestingly, the same battle is ahead for regenerative ag and other eco-friendly initiatives like the circular economy for packaging. Regenerative ag focuses on soil quality (i.e., dirt) and circular packaging makes use of returned used packaging (i.e., dirty). Both concepts will require extensive marketing efforts to get consumers to see dirt in a new way. This is a complex topic—and my thoughts are too lengthy to capture here—but in brief I think we need to learn to romance dirt. How? Here are three ways:
Terroir: If you know wine, you’ve likely heard of terroir. It’s the French term used to describe the environment responsible for growing a specific vintage. While that means everything from the climate to the other crops on the farm, soil is pivotal. Therefore, there are centuries of examples that marketers can learn from (see wine, alcohol and cheese) to apply to new environmental efforts
Soil fatigue/exhaustion: We are already seeing this being used by some brands (see the Country Crock product above). It is the idea that nutrients get stripped from soil and must be carefully returned. Similarly, we are also witnessing brands messaging about the nutrient density of the soil their products’ ingredients are grown in and connecting that to the final nutrient density available in the product (see trendy date syrup maker Joolies).
Soil security: This way of talking about dirt is the most ambitious, but also the most emotional. Soil security connects the health of the soil to the health of community and surrounding ecosystem. You are starting to see brands like Guinness (Diageo) message their regenerative and eco-friendly packaging in this direction. They talk about soil health in the same breath in which they talk about farmer livelihoods and Irish jobs.
Hispanic Rising
A new low-sugar version of Sugaroxes’ Tamalitoz was introduced at the Sweets & Snacks Expo. Tamalitoz ChewLows combine tropical fruits with the classic Mexican taste of chili lime and sea salt. Varieties will include Divine Watermelon and Pineapple Galore, both with less than 1g of sugar per chew.
Coca-Cola’s Minute Maid brand has launched a new line of Agua Frescas. The non-carbonated juice beverages come in hibiscus, mango and strawberry flavors. The brand is currently having fun with the fact that their name abbreviates as AF (and if you’re not sure what that means, you are definitely not the target consumer).
Fillo’s, a canned bean company, has launched Walking Tamales, a line of shelf-stable, clean-label, ready-to-eat, vegan tamales. The company draws comparison to the fact that tamales are the original energy bars (or ‘corn bar’ as it is labeled on-pack). Sweet and savory varieties include: Strawberry Coconut, Peanut Butter Piloncillo, Mexican Chocolate Almond, Bean Salsa Habanero, Bean Salsa Verde, and Bean Salsa Roja.
So What? For years, CPG and QSR companies have approached Hispanic foods from a Waspy POV. Assuming their target consumers were unable to handle the flavors of ‘authentic’ dishes, they launched watered-down products that were labeled ‘Mexican-style’, Southwestern, and (my favorite) Fiesta.
However, as the demographics of the US shifts toward a Hispanic majority in the coming years, you can feel the industry changing. Soon Hispanic foods will not be relegated to one-off flavor extensions or inexpensive meal kits, but instead they will proliferate into mid-tier and premium foods. As Hispanic-owned companies gain prominence (see Siete Foods), large corporations are waking up to the possibility that what Italian food was to previous generations, Mexican, Puerto Rican or Brazilian will be to the next.
The problem is that this is not a brand competency that most major companies can create internally. The authenticity must be bestowed by real people. That’s why brands like SOMOS (created by Kind founder Daniel Lubetzky, former KIND CMO Miguel Leal, and former KIND Head of Product Innovation Rodrigo Zuloaga) are likely to not only succeed, but also become massive targets for acquisition in the coming years.
Brands I’m Watching
Nourished has offered the first commercially available 3D-printed protein bar. The bars, ordered directly from the brand’s website, contain 18g protein, 2.5 g of sugar and are 100% vegan. According to Nourished, users can create over 400 different bars using their customization options. The company also makes 3D printed vitamins specifically for a consumer’s needs.
So What? DTC and customization is difficult. Even for big brands, like Kellogg’s Bare Naked customized granola, have difficulty gaining and maintaining consumer interest (Bare Naked Custom Made granola closed a few years after launching). One upside of such a venture, especially for big companies, is consumer data. I’m sure Bare Naked learned a lot about potential granola combinations for future retail launches, but likely not enough to warrant a separate DTC business.
Perhaps the solution is in creating more complex bespoke products for consumers using cutting edge tech like 3D printing? Personally, I’d suggest to Nourished to combine their vitamin offerings with their protein bar capabilities to make the output much more unique.
Nude Mints is rethinking how to deliver on fresh breath. The playful package contains mini-spheres with two components: one freshens the breath immediately and the other freshens the gut (where most odors actually originate). Based on pharmaceutical tech developed in Japan, the instant dissolve spheres allow for a different experience compared to most gums and lozenges. Currently available online only, the company is currently exploring retail distribution.
So What? The mint category does feel like it is due for a refresh. With Nude Mints, I see two innovations that I like. One is the fact that the product specifically calls out the gut as a source of bad breath and the product’s ability to combat it. That’s a differentiating benefit I’ve not heard before. The second is the packaging. Beyond being very unique, the container is also a quick game, with some retro vibes for consumers of a specific era.