In today’s newsletter:
· Co-Branding: Why is it suddenly everywhere?
· Metrics: Make sure they matter
· Snack Bars: Breaking out of boredom
· Functional Foods: They’re back and bigger than ever
Focus Brand (owners of Cinnabon, Auntie Anne’s, Jamba, Carvel, McAlister’s Deli, Schlotzky’s, and Moe’s Southwest Grill) has announced that they will launch Cinnabon Swirl, a co-branded concept between their Carvel and Cinnabon brands. This same announcement set the companies co-branding strategy, as they discussed plans to have more than 50 dual- and tri-branded shops open in the next year. In addition to Cinnabon Swirl, the company also announced plans to create stores combining Auntie Anne’s with Cinnabon, Cinnabon and Carvel, and Jamba.
General Mills Convenience team has launched Cinnamon Toast Crunch Bugles. The mash-up of two General Mills brands takes the “Cinnadust” of the iconic cereal and sprinkles it on the conical snacks. Available in c-stores soon.
Nestle’s KitKat is partnering once again with Lotus brand Biscoff to launch a sharing version of KitKat Bites. The 90g sharing bag will be available in the UK and Ireland.
Peeps (from Just Born Confections) is partnering with Dr. Pepper to launch a new variety of the holiday candy this Easter. The new flavor will be available exclusively at Walmart.
Why Co-Branding is Suddenly Everywhere
Do you remember when we all were proud to be ‘sticking it’ to Big Cable by cutting the cord and switching to streaming? We felt we were so smart, getting all the benefits for a lower cost.
While the average price people pay for streaming ($20-$30/month) still dwarfs that of a cable subscription ($79/month), the costs are rising. Streaming platforms are raising their prices (or switching to ad models) and customers are finding that they need to add additional platforms to stream the shows they want to watch as more content retreats to specific platforms. If a user wants to watch all the top streamers, they now must pay more than cable:
There is an analogy here to the food/bev industry. For years we were excited by the potential of the long tail, finding growth in micro-niche consumers through the power of digital engagement. During the 2010’s, through DTC and social media target marketing, companies sliced and splintered consumer groups looking for a foothold. While the profit was small, everyone was championing the potential for upside growth further down the line.
The reality that we are now seeing is that the business model isn’t sustainable (especially for a large company). While you might find extremely passionate consumers willing to pay a premium for your bespoke product, the cost of DTC, development, and marketing greatly exceed revenue. As the economy has cooled, business philosophy has pivoted from a growth-first model to a profit model.
Co-branding is the re-bundling of consumers for an economically challenged age. Instead of slicing consumer targets finer, co-branding does the opposite and aims to make targets bigger to maximize impact. In addtion, brands can share the effort needed for launch and the profits. Plus, there are benefits in dipping your ‘brand toe’ into the Venn diagram of consumer overlap, each brand likely has a higher chance of gaining new consumers, or re-exciting long-term fans.
So, just like you can’t watch all of your favorite shows now with one subscription, you can’t ‘beat the system’ and expect major growth with extremely niche product launch/marketing. The Great Re-Bundling has begun!
Metrics that Matter
In 1902, the French colonial government in Hanoi, Vietnam had a problem, a rat problem.
Beyond spreading disease, the out-of-control explosion of rats in the city was an embarrassment. So, officials created a bounty program; bring in a rat tail and you’d receive 1¢. At first, things went well. Redemption stations were doing amazing business, with locals bringing in hundreds of rat tails at a time. However, the rat problem did not appear to be easing, in fact it seemed to be getting worse.
One day, an official noticed several rats in the city center that were missing tails, and the reality became clear. Locals were cutting the tails off rats but letting them go so that they could breed and create more rats (and more tails to redeem). The colonial officials had created a perverse incentive, unknowingly making the problem worse while attempting to solve it.
If you are going to create a metric, make sure that it will truly deliver on your goal. Too often, company vision, mission and goals are created in an idealist bubble. Metrics are chosen because they are easy to measure or will sound good at an end-of-year company meeting. However, we often forget the potential perverse nature of metrics. We forget that most employees were not in the boardroom when the corporate mission statement was made and don’t automatically see the big picture. Void of meaning, the metric can take on a negative life of its own, a KPI to be achieved no matter the consequences or the damage it inflicts long-term.
For that reason, you must choose metrics that matter. Put as much thought and reflection into crafting your metrics as you do your mission, vision and desired deliverables, and communicate the meaning behind the metrics. Most importantly, make sure positive metrics will mean a straight-line improvement in your goals. Otherwise, you’ll just be collecting rat tails.
Nature’s Garden (a Cibo Vita brand) is releasing a new line of spiced nuts in zippered pouches. The line, which contains four SKUs, will be available in 500+ Hudson News locations with an MSRP of $6.99. Flavors include Nashville-Hot BBQ Almonds, Baja Taco Cashews, Ghost Pepper Ranch Almonds and Spicy Dill Cashews.
Speaking of nuts, Arnold Palmer Snacks is introducing a new Lemonade Cashew to their lineup. The 4oz package (“Fits into your cup holder”) contains roasted cashews with lemon seasoning.
Frozen yogurt chain Red Mango has announced their new toppings for 2023. The flavors range across all the basic tastes, from simple fruits (sweet strawberries; sour cherries), to the seasonal (Conversation Heart Candies), to the trendy (Himalayan Pink salt; spicy Aleppo peppers). Available at Red Mango shops nationwide.
Frito-Lay has gone all-in on tangy. Under the extremely popular Flamin Hot Cheetos brand, Frito has released Tangy Chili Fusion, a blend of chili peppers, garlic, ginger, citrus. Under the Doritos brand, Frito has also released Tangy BBQ (just the latest in a line of Tangy line extensions: Tangy Ranch, Tangy Pickle, Tangy Cheese, and Tangy Tamarind).
Lenny & Larry’s, makers of protein cookies, have released a new line of Complete Kickstart Breakfast Bars. Each soft breakfast bar has 8g of plant protein, 14g of whole grains, and 4g of prebiotic fiber. Flavors include Banana Chocolate, Apple Cinnamon, and Blueberry Lemon.
KIND has added two new varieties to its existing Breakfast Cereal Bar lineup. The new bars (Chocolate with Almonds; Peanut Butter) have an oat milk-based foot and drizzle. The plant-based bar claims oats as the #1 ingredient, with 6-7 grams fiber, and 9 g sugar.
Colorado-based Bobo’s has launched a new line of protein bars. Each bar contains 15g of plant-based protein as well as dates and honey for sweetness. Available in two flavors: Double Chocolate Almond Butter and Peanut Butter Chocolate Chip. This comes soon after the company announced the completion of a major expansion to their manufacturing facilities.
Trader Joes is introducing Super Seedy Cheese Snack Bites, a spinoff of their popular Baked Cheese Bites. The bites are a combination of Parmesan cheese, sunflower seeds, pumpkin seeds, puffed quinoa, whole black peppercorns and black sesame seeds.
Post Holdings’ Honey Bunches of Oats has introduced a new line of Granola Chips. Currently available in either Honey Roasted or Blueberry, the brand says that they are “mess-free and great for on-the-go snacking,” and suggest consumers “Dip them in yogurt, top with your favorite nut butters or spreads.”
Domino’s Japan is offering what they are calling a “shocking dessert.” The Bacon Shake contains ice cream, Hokkaido milk and bacon bits. However, the shocking part is how Domino’s is suggesting it be used. The chain is advertising that customers dip their pizza into the shake as a fun taste exploration of temperatures and tastes. Available at Japanese locations until March 5th.
Snack Bars: Why So Boring?
Walk down the snack chip or nut aisle of a grocery or c-store and be prepared to be amazed. As the Nature’s Garden, Arnold Palmer and Frito examples above illustrate, today’s snack brands are not shy when it comes to flavor and texture, with sweet, spicy, tangy, salty, explosions of sensation in every bag.
However, if you turn down the other snack aisle, the one containing bars and bites, you see a very different reality. Every brand has the same handful of flavors: chocolate, the obligatory chocolate peanut butter, and potentially a rogue fruit or almond. While the forms might vary between cookies, brownies, bars and bites, the textures are binary: crunchy or chewy. Variety comes, not from flavors but, from benefits, like probiotics, fiber and protein.
How can both snacking realities be true? Why are snack bars so limited in their flavor? I have a few guesses:
· Cereal Start: Bars were the original portable breakfast cereal. For that reason, they’ve maintained mostly the sweet profile and simple flavors found in cereal.
· Breakfast Bland: Of all the meals of the day, breakfast tends to be the least adventurous. Snack bars’ may have inherited their single-note flavor from their association with breakfast.
· Between Meal Fatigue: Snack bars are eaten between meals, and consumers aren’t looking for strong flavors at this time. If a snack bar is too bold, it could ‘ruin’ lunch or dinner.
· Wellness Orientation: Like cereal, snack bars have always had a health/wellness halo. Perhaps this association with health has stopped manufacturers from leaning too far into ‘extreme’ flavors traditionally given to snack chips/crackers.
· Benefit Carrier: Perhaps snack bars just need to be palatable enough to be carriers for protein and vitamins? Providing a permissible indulgent flavor along with health benefits.
· Protein Bar Evolution: The category has splintered to include high protein bars (like Quest) that contain flavors like Birthday Cake, Red Velvet and Lemon Cake. These bars provide flavor differentiation for the whole category.
Each of these guesses have merit, and I’ve heard industry folks use each of them. However, I don’t believe any fully explain the category’s inability to break through the ‘chocolate peanut butter’ barrier. Snack bars may have started as a breakfast cereal replacement, but they’ve evolved far from their roots. In fact, younger consumers likely don’t recognize the connection. Between meal fatigue isn’t the issue either, people eat spicy chips anytime of day. As for snack bars being held back by wellness or its benefits, that went out the window when bars started to compare themselves to candy bars. Finally, the presence of flavor variation in protein bars should actually push the rest of the category toward flavor innovation due to the popularity of the subcategory.
Instead, I think snack bars have stagnated compared to salty snacks because of the mindspace they occupy for the consumer. Bars are functional, salty snacks are emotional.
Snack bars are typically used as gut-fill, a few mindless chews while commuting, a much-needed protein boost after working out. While taste may help facilitate consumption, complex flavor isn’t necessary because they are fundamentally utilitarian. On the other hand, salty snacks fulfill no nutritional benefit. They are eaten for the joy they provide, the emotional, fun accompaniment to a movie or a beer.
Does that mean that snack bars have stopped evolving and have reached their flavor+function peak? Not necessarily, but to progress, I think snack bars must softly break with their functional roots and become more emotional, maintaining some health benefits but pushing their experiential utility. That means inserting themselves into emotional moments and increasing engagement with the bar.
How? One way is to mimic the form of salty snacks (e.g., converting bars into chips, like the HBO or TJ products above). Another way could be to make the snack bar eating occasion more experiential and interactive. For example, by adding a dip. What if we thought of a crunchy or chewy bar as a giant chip begging for a dip? Why not sell small cups of snack bar dip in the aisle? Just imagine the interesting flavor combos of dips that could be developed to complement bars. The action of dipping could move the functional bar into an emotional space, allowing for a new snack bar innovation renaissance.
Return to Functional Foods
Post Consumer Brands has launched a new brand, Sweet Dreams cereals. Currently containing two SKUs, Blueberry Midnight and Honey Moonglow, the cereals have been designed to “support a good sleep routine and a fresh start to the next day.” In addition to whole wheat, rice and almonds, the cereals contain lavender and chamomile, and “curated vitamins and minerals” to help support natural melatonin production. Currently available in stores.
Tangentially speaking of Post, Premier Protein (now of Bellring Brands) has launched a new product line called Good Night. The product range (protein drinks and a cocoa mix) contain a “nighttime protein blend” and minerals like magnesium and zinc which all “help soothe and calm you.” Varieties include Cozy Cocoa, Dreamy Vanilla, Caramel Bliss, and Cozy Cocoa Mix.
Seattle-based Forij has redesigned the branding on their line off functional granolas. The new, playful look emphasizes the key benefits (bone and brain health) and ingredients (Lion’s Mane mushrooms and Vit. D). Varieties include Sea Salt Cocoa, Vanilla Almond and Toasted Cinnamon.
Bend Beauty has released a new gut health supplement called Gut Glow that the brand says '“isn’t you’re your typical fiber supplement.” The product blends “well-tolerated” prebiotic fibers and a 10:1 tremella mushroom extract to provide gut function and aid in immune system regulation. The flavorless powder can be added to any beverage. Bend markets the product saying, “Your glow begins within,” and the hashtag #PoopGoodLookGood.
Velty Coffee has introduced a new Uncaffeinated Spiced, Instant Coffee. The coffee, which the brand calls a gut-friendly digestif, contains a mix of prebiotics, antioxidants, and anti-inflammatories. The product contains Jerusalem artichoke inulin, mesquite powder, and several mushrooms, as well as ginger and cinnamon. Available at Velty Coffee’s website.
Free Candy is a new line of “cell-based gummies” from Cult Foods (and new product expansion division of Cult Food Science Corp). Free Candy benefit is that it provides a high-quality source of collagen while being animal free. Cult Food Science currently has investments in 18 early-stage cellular agriculture companies (e.g., bee-free honey maker MeliBio, ethical chocolate company California Cultured, and cellular coffee company Minus Coffee).
So What? 84.51, the data science and insights arm of Kroger, is out with their January 2023 Digest. One fascinating chart compares the functional food beliefs of different age groups:
There are a lot of interesting data here. It is not surprising to see that food is intrinsically tied to weight, heart health, energy. However, the resonance of food with blood sugar management across all age groups is unexpected, and likely speaks to the increasing buzz about sugar and the growing prevalence of diabetes across all ages.
The biggest thing that sticks out to me is the extreme range of connections 18-34 makes between food and function. In fact, 18-34 put ten connections in their top two box, more than the 55+ group! Additionally, the disparity between age groups’ connections is interesting—e.g., cholesterol, disease, and blood pressure are highly related to food for 55+, but not for 18-34.
This helps explain why we’ve seen an explosion of new food products with untraditional, functional claims (e.g., foods/bev for sleep, brain, and bone health). However, the question is whether the 18-34 enthusiasm and interest in these products is enough to sustain them and support brand growth. Additionally, will the 18-34 demographic help spark new interest in functional foods for diverse benefits across generations or will their beliefs simply follow them and be a marker of their age (i.e., just like cholesterol lowering has followed consumers who came of age in the 1980’s)?
The biggest watchout for brands is, just because a demographic connects food to particular health/wellness benefits, that doesn’t mean ALL foods and occasions are fair game. Coffee (which upsets some people’s stomachs) is a natural candidate for a gut-friendly remake. However, cereal’s connection to better sleep is not as intuitive. Do I eat this cereal in the morning or at night (although the call out of lavender and chamomile help)? In the end, the less explaining that needs to be done on pack to the food-function connection, the better for consumer trial.
Nevertheless, the increase belief in a food+health connection for the 18-34 demographic signals that a massive expansion of these benefit-infusion products is coming.
TIDBITS
Matt Rogers, co-founder of e-thermostat Nest, has launched a new product called Mill. Invented to combat the food waste that ends up landfills, Mill is a food bin that sits in your kitchen and automatically “dries, shrinks and destinks” your waste by converting it into a compact powder. Consumers then ship this powder to a company that turns it into fertilizer for farms. So What? While I understand the insight and ambition, for $33/month, I can’t see even the most environmentally conscious consumers converting from home composting to this service (especially much cheaper smart composting units exist, like Lomi). The fatal flaw for me, beyond the steep subscription cost, is the need to ship the dried waste back to the company for processing. How does adding more carbon footprint to your waste make it better?
Baskin-Robbins is introducing three new ice cream Gender Reveal cakes for soon-to-be parents. Each cake is customizable with an ice cream flavor and is available in three varieties, Oreo Cookie Oh Baby! Ice Cream Cake, the What’s the Scoop? Gender Reveal Cake, and the Heart Scoops Gender Reveal Cake. So What? For every disastrous gender reveal you hear about ending in forest fire, there are thousands of people quitely (and safely) celebrating at home with friends and family and a simple cake. Why has it taken this long for a large brand to capitalize on this? It feels like a quick win for a cake mix company, potentially opening up a whole new product line of ‘message cakes’ that reveal fun secrets. Possibly, the hold-up is due to corporatations not wanting have PR conversations around gender in general. If that’s the case, BR’s new cakes will be an interesting test case.
JackBe told The Spoon that they had opened their first curbside drive thru grocer this week. The first store, in Oklahoma City, is just one of several the company plans to open in Oklahoma this year. The company is fresh off a $3.5 million seed round invest, with another round to close this year. JackBe represents an interesting middle ground that is opening up for grocers. While many big players are investing in micro-fulfillment (e.g., Walmart), Jackbe (which lacks a walk-in component) offers nano-fulfillment in areas where big box stores can’t enter. I expect to see more big and small players experimenting with nano-fulfillment drive thrus this year.
Finally, if you aren’t watching the TikToker ShabazSays, you are missing out on a seriously hilarious time-waster. We watch Shabaz as he watches and comments on other TikTok videos, all while he is wrapped in his comfy cartoon blanket. In many ways, his videos are very smart social commentary, reflecting our own reactions and addictions to TikTok. Many of his videos are reactions to crazy food videos (like this very unsanitary chicken dinner) or his series called “I’m Rich, Your Poor”(IRYP) where he makes fun of the pretentious posts of people eating £70 cookies or having a full freezer devoted only to decorative ice by giving voice-over to their ostentatious habits.