Mainstream Extreme
Organic brand Annie’s has launched an Extreme version of their popular mac & cheese. The new varieties add 50% more cheese to their Shells & Real Aged Cheddar Mac & Cheese and Shells & White Cheddar Mac & Cheese products.
Canned sparkling and still water brand Liquid Death (“murder your thirst”) has announced that they have raised an additional $70 million in their latest Series D round of funding, bringing total funding to $200 million. According to Peter Pham, co-founder of Science Inc (one of the VC firms behind this funding round), Liquid Death is the fastest growing non-alcoholic beverage company of all time, with a projected revenue this year of $130 million—up from $45 million in 2021. The company is currently valued at $700 million. The company has recently partnered with Martha Stewart to create a Liquid Death candle.
Once restricted to summer carnivals, the corn dog is moving mainstream with the help of Instagram and TikTok. Korean corn dogs have been trending on social media for a few years, but now we are seeing foodservice examples. One of the largest is the LA-based/Seoul-backed chain Two Hands. Starting in 2019 with one store, Two Hands now has almost 100 shops across the US. What is a Korean corn dog? Think of normal corn dog, but rolled in spices, caked in pieces of French fries, drizzled with sauces and sometime stuffed with cheese.
So What? In the year 1993, a lot of events happened that, in retrospect, were the start of something big. The US saw the 1st bombing of the World Trade Center and the beginning of increased terrorist threats, Jurassic Park was changing our expectations of movie magic, and Sears shuttered their 97-year-old catalog business (one year before the start of Amazon).
However, there was another occurrence in 1993 that seemed even more innocuous but turned out to be quite important: the launch of the super sour candy Warheads (or Mega Warheads as they were originally called). While sour candies had existed prior to this launch, Warheads sparked a movement that changed a generation. With a pH level of 1.6 (similar to some rust removers), this product marked the beginning of the ‘extreme candy’ movement that took over the industry. As a 1999 Wired article reported, “These days, kids want special effects edited into their candy. A Tootsie Pop's chewy center was good enough for coonskin-capped Davy Crockett fans in the '50s, but modern youngsters demand candy that spins, luminesces, or plays music in their heads. They require pops with holographs printed on them, pops that turn their spit into kaleidoscopic fizz.”
Extreme candy was the start (or at least a major outcome) of the Extreme (or Xtreme!) movement that shook the 90’s. For the span of a decade, everything was marketed as extreme. We had extreme sports (the X Games started in ’95), Xtreme pro wrestling, and even Xtreme Right Guard deodorant (which is still around). Not to mention Doritos Extreme, Taco Bell Extreme Nachos, and 7-Eleven’s Extreme Gulp. For Millennials (born 1981-1996), extreme was a childhood reality.
Fast-forward to 2022 and Millennials have entered adulthood, with jobs, families and bills to pay. Instead of settling into the doldrums of existence, I would contend that they are nostalgic for the extremes of their youth. However, instead of molar-destroying candy, they are looking to amplify everyday products; bringing extremes into the quite facets of their lives to make them ‘da bomb.’
Today, Millennial rebellion is less about snowboarding off a mountain or getting hammered on Zima and Hooch. It’s about shotgunning a can of sparkling water, putting extra seasoning on your corn dog, or adding more cheese to your organic mac and cheese.
As Millennials (and some Gen Xers) reach middle age, they are looking for ‘extreme’ to become safer. No longer a rebellion against parental authority figures, now extreme is a rebellion by parental authority figures against the monotony of adulthood.
Cheap Chic
Bloomberg published an analysis last week showing that the price of dairy milk has jumped 36% in the UK since January. This makes the average price for a 2-pint, retailer branded bottle of cow’s milk £1.25. More expensive than the same sized bottle of private label soy milk (£1.05), almond milk (£1.07), and oat milk (£1.24). While branded milks don’t yet show this alternative milk price advantage, increased inflation in the UK is continuing to drive up the price of British dairy staples (e.g., Asda putting security devices on Lurpak butter packages).
Billionaire investor Mark Cuban and iCarly star Emily Ratajkowski were just two of the latest backers of Prolific Machines’ funding round. Unlike other alt-meat companies, Prolific Machines’ focus is less on the positive climate benefit of making meat mimics in a fermenter, and more on bringing down the cost of the technology. The company has raised $45 million and is looking to raise an additional $170 million in their next round. The company is striving to develop technology that will bring price parity (or below) to the protein sector.
Swiss company CoffeeB is looking to disrupt Keurig and Nespresso with their new coffee delivery system and machines. The company has developed compacted coffee balls that require no packaging (other than the pouch a pack is delivered in). To use, a consumer simply drops a coffee ball into the specially designed coffeemaker where the ball is punctured and rehydrated. The machine and coffee balls are currently only available in France and Switzerland. A pack of 9 coffee balls will retail for $5, slightly less than Keurig’s and Nespresso pods.
IKEA Australia is launching, what they are calling, the ‘most exclusive card in the world.’ The IKEA Baller Card—presented to only 250 people—will provide its owner free IKEA meatballs for one year. The cards are available by invite only, and only valid at Australian IKEAs. The cards are being given to the lucky winners inside of boxes that smell like the retailer’s iconic Swedish meatballs. IKEA announced the release with the following video.
So What? For those of you that don’t know, my company (Malachite) does front-end strategy and innovation for companies. In plain English, that means we help companies find the right opportunities to invest their limited innovation budgets. So, in a sense, our pipeline of topics as a consultancy is a good indication of where the CPG industry is going in the next 12-18 months.
If I look back over the last four years of topics commissioned by CPG companies and retailers, here is what I see in terms of top topics:
2019: Wellness
2020: Alt-food (alt protein, alt food product, etc.)
2021: Snacking
2022: Value and Premium
In the last year, we have seen companies looking for ways to increase savings as ingredient costs rise and develop products/programs to help consumers n inflationary times. However, we’ve also seen an increased interest in premium. As CPG companies rethink their portfolios, many are searching for high margin categories that can withstand retailer onslaught and protect their bottom lines.
While these two topics seem like polar opposites, is there room for something in-between? I would contend that there is. If you can target the right foil for your product, you can still deliver a good margin while being perceived by the consumer as a bargain price.
The classic example of this is DiGiorno pizza. They positioned themselves to be as good as delivery pizza, justifying their higher price point compared to their frozen shelf-mates. Since then, the market for ‘premium’ has changed. Now, its not just the quality of your ingredients that makes you worth a higher price, but also your technology, your wellness characteristics and your sustainability message.
I’m curious if there is a branded opportunity for ‘cheap chic’ (be it inexpensive wellness, affordable sustainability or trendy for less)? Can a manufacturer create a brand that mimics what Trader Joes has done in retail? Maybe this will be the real future role of alternatives, producing top-quality wellness, sustainability and taste for lower prices?
Pushing the Connection
PB2, the powdered nut butter brand, is introducing a new line of baking mixes. The mixes (Chocolate Chip Cookie, Apple Cinnamon Muffin, and Chocolate Chip Brownie) are all made with the brand’s roasted peanut butter powder. The product will come in resealable bags and will be available on the company’s website or via Amazon for $11.99.
Ancient Nutrition is expanding their powdered Bone Broth Protein line to include three new savory flavors. Previously, the brand had focused on sweeter varieties (e.g., chocolate, pumpkin spice, salted caramel) for inclusion into smoothies and drinks. These new flavors replicate popular soups—Chicken Soup, Butternut Squash and Tomato Basil.
Gotham Greens, the vertical farming brand, is introducing a line of dips and dressings. The dips, all plant-focused and dairy-free, are made with a base of chickpeas or cauliflower. Varieties include Spinach Artichoke, Green Goddess, Tzatziki, and Green Harissa. The dressings contain a mix of vegan offerings (Vegan Ranch, Vegan Caesar, and Vegan Goddess) as well as traditional varieties (Goddess, Caesar, Lemon Basil).
So What? In psychology, there is a concept called functional fixedness. It’s a cognitive bias where people have a hard time seeing an object beyond the way its traditionally used. Take something like a truck. If I asked you what you can use a truck for, I’m guessing you’d say something like drive to work, haul furniture, or tow a boat. These are all traditional things that trucks do. Few people would think about using a truck to power your home. However, that’s one of the marketed benefits of the new Ford F150 Lightening, and it worked for people in Hurricane Ian’s aftermath. However, its still a reach for most consumers in the market for a vehicle.
Getting consumers to think about your product beyond traditional terms is difficult, especially if your own marketing is responsible for instilling that original thinking. To get around consumers’ functional fixedness some brands use suggestions, advertising and back of box recipes, but an interesting alternative is brand expansion (i.e., launch products that show the utility of your core product in new and different applications).
Of course, you must be sure that there is a logical link for consumers; something that they can grasp in the time it takes to push their cart down the aisle. If you move too many steps, you’ll lose consumers. However, if you make a small change and enter an adjacent category, you can open up worlds of opportunities for your brand.
Sea Change
Atlantic Sea Farms is introducing two sea-veggie burgers to foodservice. The burgers contain the company’s Maine kelp along with chickpeas and brown rice. Atlantic Sea Farms is unique in being the first US company to sustainability produce and harvest domestic kelp at scale for consumer consumption. The burgers are gluten-free, vegan, non-GMO and contain 6 grams of plant protein. The company is offering two flavors for foodservice: Basil Pesto and Ginger Sesame.
Alaska-based Barnacle Foods has launched a Kelp Chili Crisp product in collaboration with YouTube fisher and chef Taku of Outdoor Chef Life. Building off the incredible popularity of chili crisp, the brand incorporates Alaskan kelp into the mix for a salty, umami addition. Available on the company’s website.
Opal Pets has introduced a vitamin supplement for dogs called Perfect Powder. The company is appealing to consumers that create their own fresh, homemade meals for their dogs but want a vet-created supplement to sprinkle over. The powder is made of vegetables, marine micro algae and Canadian sea kelp. Each container of Perfect Powder comes with an e-cookbook of recipes.
So What? Symbolically, the ocean has several meanings, each perfect for our current time. The ocean can stand for power/strength, mystery, endlessness and hope. Right now, many of us don’t see the Earth as strong, but rather wounded. Everywhere on land has been digitized, quantified and finite, leaving the ocean as the reservoir of possibility and dreams. And in an era of climate fears, there are increasing hopes that the ocean may help us pull through.
Kelp and algae aren’t new forms of food—native peoples have relied on them for millennia—but we are coming back to them for new reasons. Some research shows that kelp may be the carbon sequester we’ve been looking, removing tons of CO2 in its fast growing lifecycle. Plus, kelp and other ocean vegetables has an intriguing backstory, with ancient uses and traditional preparation.
Is there a future in plant-based aquaculture? It depends on the continued cost of production and consumer education regarding sustainability, but I can see an enhanced interest in the coming years.
Brands I’m Watching
Kraft-Heinz UK is introducing a Halloween-themed spooky mayonnaise. The mayo, seasoned with black garlic, is tinted black and available in three different scary labels.
So What? As the kids say today: I’m not mad at this. If you are old enough to remember Heinz’s kid-targeted multi-colored ketchups called EZ Squirt, you likely know that it wasn’t a success. Therefore, if you see another colored condiment by Heinz, it might be easy to assume that this is going down the same disastrous path. However, I would not agree. Unlike EZ Squirt, this isn’t specifically kid-targeted but all family or even adult, so its not relying solely on kid-nag for trial. Second, this is a limited time only seasonal product and will likely draw people to the condiment aisle (or will bring excitement to an endcap). Finally, I like the black color/black garlic connection, it makes enough sense to justify the tint (although I’m not sure how it will look on a sandwich). If anything, I salute Heinz for taking another swing at adding color to a condiment. 2006 wasn’t that long ago in corporate terms and it is easy to pass on innovation when it looks too much like recent disappointment.