In today’s newsletter:
Brand Yoga: How to Stretch Correctly
Reasons to Believe: Is it hero ingredient or ingredients?
Pet Family: Everythings going to the dogs
Beware Average: Avoiding the trap of brand blandness
Tidbits: Quick links to fun food news
Did you miss the last newsletter? Find it here
Brand Stretch, Not Brand Break
PepsiCo is launching Gatorade Water, an unflavored, electrolyte-infused, 7X filtered, alkaline water. The company’s research has shown that athletes are increasingly reaching for ‘functional water’ (a category estimated to reach $18B in sales this year). Gatorade hopes to grow into this new category as growth of its flagship softens compared to rival Body Armor.
Tillamook, the Oregon-based co-op dairy company, has announced the launch of a line of premium frozen meals. The line will initially contain Mac & Cheese with three varieties (Classic Cheddar, Sharp Cheddar & Uncured Bacon, and Cheddar & Hatch Chilie) and Crispy Stone-Fired Pizza with four varieties (Cheesy Uncured Pepperoni, Three Cheese, Three Cheese Supreme, and Cheesy BBQ Chicken).
Kraft-Heinz is launching Oscar Meyer Scramblers. Built off a similar concept Just Crack an Egg (also a Kraft brand), Scramblers are refrigerated, microwavable cups containing cheese, veggies and occasionally meats to which consumers add 2 eggs. Varieties include Ham & Colby Jack, Bacon & Velveeta, and Wiener and Cheddar.
B&G Foods is partnering with Sazerac to produce seasoning blends inspired by flavors of the company’s spirits. The blends, based on Fireball Cinnamon Whisky, Buffalo Trace Bourbon and Southern Comfort Whiskey, were developed for use as rubs or seasonings on chicken, red meat, veggies and even desserts.
So What? Brand expansion into new categories can lead to incremental sales and brand re-invigoration, but only if the brand is realistic in its approach. Too often, brand managers become myopic and strangely delusional about the power their own brand holds. Just because your brand is iconic or popular doesn’t mean it will work in a new category or sub-category. When I’m helping clients make this decision, I have them think through five criteria:
1. Product Hero or Zero? Is the brand’s add to the product really the draw for consumers? Velveeta seems like something people would clamor for in a breakfast egg dish, but are cut up hot dogs really a draw?
2. Perceived Expertise: Does the brand’s specialty make sense in this context? Would the consumer see their capabilities lifting the product beyond the current category norms? Here, Tillamook makes sense. Tillamook cheese seems like a step up in the frozen meal space and I can believe that their mac & cheese or pizza would be better than others. Is Gatorade counting on their perceieved expertise in electrolytes?
3. Brand Differentiation: Is the addition of your brand going to make the product stick out in a positive way? In the crowded, but often non-descript, world of seasoning blends, branding with popular alcohols makes sense. I also assume that this is the angle for Gatorade. In a category full of no-names, the thought is Gatorade will stick out. However, there is a significant risk of cannibalizing Propel Fitness Water (another Gatorade brand).
4. Consumer Recall: Does your brand’s attachment to the product increase, not only trial, but repeat? In a crowded category, will consumers say, “Buy me the Fireball seasoning” versus “buy me the cinnamon-flavored seasoning”? (I’d guess the former)
5. Width of Innovation Funnel: Does your brand give the product line room to grow? If it’s only a licensing deal, limited innovation potential is likely OK. However, if this is a long-term brand expansion, this criterion becomes critical. This is where I think Gatorade runs into issues. Add flavors? Now you are just re-engineering Gatorade or Propel. Modify the electrolytes? Maybe? Most likely, Gatorade isn’t too concerned. With their name, distribution and Sales prowess, they will probably be able to become the functional water leader with this launch (but can they endure?).
All for One or One for All?
Acre Made Foods is set to launch a new line of Plant-Based Protein Scramble Cups. The line, a finalist in the 2023 NEXTY Awards' Best New Meat Alternative or Dairy Alternative category, is made from lupin and yellow field peas. The product has the equivalent protein to a two egg scramble.
UK-based egg alternative company Oggs has launched a bakery line of plant-based cakes and brownie bites showcasing the power of aquafaba (chickpea water). The cakes and bites are available in Sainsbury’s, Tesco, Waitrose, Ocado and Co-op.
Surthrival, makers of supplements and superfood blends, has launched a Black Walnut Protein Powder. The powder is made from US wild-grown, sustainably foraged & processed black walnuts. The company uses a CO2 extraction process to produce 17g protein per serving powder.
Chickpea pasta company Banza is launching a line of Protein Waffles. The gluten free waffles are made with chickpeas and contain 10g of protein per serving. Varieties include Homestyle, Blueberry, and Chocolate Chip.
NY-based MOYU is now producing baking kits powered by fiber-rich konjac. The company sources their konjac gum from Yunnan, in the southern region of China. Beyond fiber, the company claims that konjac gives baked goods their desirable texture “without the use of typical baking ingredients like conventional flour, sugar and butter.” Available on the company’s website.
Date Better Snacks is launching a line of candy-like confections made with dates. Varieties include Cashew Lime Crisp (dates stuffed with cashew butter and crispy toasted quinoa), Peanut Butter Crunch (dates stuffed with thick natural peanut butter and crunchy cacao nibs) and Almond Java Crunch (dates filled with creamy almond butter and bits of crunchy espresso beans).
Botko Botanical Kitchen is launching a line of grain-free crackers made from a mix of almond, flaxseed, and coconut flours. The crackers come in three varieties (sea salt, black sesame, and rosemary), are egg and dairy free, and are made with extra virgin olive oil. Available through the company’s website.
So What? I’m starting to see a schism in the world of natural food. On one side you have companies that are pinning their reason to believe on a single ingredient (e.g., konjac, black walnut, etc.), on the other you have those leaning on a blend (e.g., “plant-based protein”). When launching a product, which approach is best?
Single-Origin Pros and Cons
Clarity & Simplicity: Consumers are bombarded with information every day. Having a single ingredient heroed offers simplicity in decision-making. "What's this product about? Ah, dates. Got it!"
Storytelling Opportunity: There's a chance to dive deep into the history, benefits, and sourcing of that one ingredient, creating a narrative around it.
Perceived Purity: A singular ingredient can evoke feelings of minimal processing and purity. It's less diluted and "cleaner" in the consumer's eyes.
Challenge: If there's any negative news or research about that one ingredient, the product's reputation could take a hit.
Manufacturer Blend Pros and Cons
Expertise & Innovation: This angle implies that there's a team of experts behind the product who've figured out the optimal mix for health, taste, or other benefits.
Diverse Benefits: A blend could potentially offer a more rounded nutrient profile or a combination of health benefits.
Flexibility in Sourcing: If there's a shortage or price surge in one ingredient, the blend can potentially be adjusted without drastically affecting the end product. With a volatile supply chain, this could be helpful.
Challenge: Skeptical consumers might see blends as a way to mask cheaper ingredients or fillers.
What’s the best way? That likely depends on your category and consumer. However, a hybrid approach could be the answer. Banza is a great example here. They have built their name on the power of chickpeas, but if you look closer, a lot of the protein in those Protein Waffles comes from a protein blend of egg white and pea protein. So, while their name stands for the power of chickpeas, they aren’t reliant on chickpeas to do all the heavy benefit lifting in the portfolio, that’s quite smart.
All in the Pet Family
For the recent International Dog Day, KFC Thailand developed a campaign to upcycle the chicken bones from their meals into BONE TIE dog treats. The chews, made to look like the Colonel’s iconic neckwear, are safe for dogs to consume (unlike actual chicken bones which can splinter and cause damage to a dog’s esophagus and stomach).
Busch, a Budweiser brand, has produced a Pumpkin Spice Dog Brew beverage (not an actual beer). The brew, made from pumpkin, cinnamon, ginger, and turmeric, is available for a limited time.
Krispy Kreme launched their limited-edition Pup’kin Spice Doggie Doughnuts. The ‘doughnuts’, actually dog biscuits, are flavored with autumnal spices and come in a 6-pack. The treats are available in three varieties: Pup’kin Spice Original Glazed, Pup’kin Spice Cake, Pup’kin Spice Maple Peanut and Pup’kin Spice Cheesecake Swirl.
Famed chef José Andrés has collaborated with the new pet food brand Real Mesa to create a Mediterranean diet inspired line of dog food. The brand says they are on a mission “to nourish the relationships between families and their pets through elevated meal experiences.” The Real Mesa products, include food and treats, will soon be available on Chewy.com and Amazon.
So What? It’s no secret that pets are the new darling of the CPG world. With superior margins and a growing consumer base, CPG companies have been investing heavily in dog and cat food for years now. In fact, as the above examples illustrate, the temptation is so strong that even companies that aren’t willing to acquire a new brand are starting to do more pet-friendly campaigns and LTOs.
However, while there is significant upside to these efforts, companies need to do this wisely. If you want to see a real upside to your collabs and campaigns, a little data could go a long way in helping you determine the proper brand fit of a pet-themed action.
A Pew poll from a few months ago gives us some great data:
There are a few things to take away from this.
Volatile Emotional Bond: Recognizing that many view pets as equivalent to human family members isn't just an interesting observation—it's at the heart of why some pet brands can command higher prices. Yet, this deep connection also serves as a cautionary note. Any product or campaign that comes off as insincere risks not just a simple backlash, but a heightened emotional response from consumers. In such cases, the brand's reputation can take a significant hit.
Targeted Demographic/Channel Potential: The data above highlights opportunities that I’m not seeing in pet brands or pet-based campaigns:
Lower income focus: the significant increase in emotional sentiment toward pets among lower income consumers speaks to an underserved area. While this may not prove helpful for pet food companies looking to sell higher priced items (although I think you’d be surprised how much people would be willing to spend regardless of income), it could be useful for brands that cater to lower income groups in general.
C-Store/Dollar Store Collabs: Along with the lower income stat, the high level of ownership with rural consumers could mean that there is a channel opportunity. This is likely while Dollar General launched their own premium value dog food recently. But what about pet campaigns for other dollar store products?
Relationship Tie-Ins: Seeing that people with partners and married individuals are more likely to own a pet and feel like they are part of the family, there is an opportunity for campaigns that tie pets into family relationship milestones. Think holidays, anniversaries, or special occasions.
Targeted Education: For pet food companies, there is going to be a growing need to increase your user base. These data indicate that there may be an opportunity for offering messaging or services that educate specific groups (e.g., Asian or Black adults) on the emotional benefits of pets and potentially help them through owning their first pet.
Regression to the Meh
According to an alleged leak of the company’s new menu on Reddit last week, it looks like Panera may be dropping more than 50 items across 13 categories. The company told Restaurant Dive that they were “testing a streamlined menu” at select bakery cafes but did not comment further.
So What? I’ve worked with a lot of small companies in my career, and I’m always surprised how often founders mistake their strengths for weaknesses. For example, they curse their lack of resources and limited staff, but fail to see the red tape and slow decision speed that comes with a large organization.
Similarly, successful founders often take for granted the power of their distinct point of view. Small brands are often a reflection of the opinions of a small group of people (usually just one person), so they have sharp and often polarizing opinions. They are differentiated by what they do, but also by what they won’t do.
However, as brands get bigger, they tend to regress to the category mean. In chasing volume, they begin to believe that becoming a ‘jack of all trades’ is the solution to ever-demanding growth. In doing so, they trade their distinctness for well-roundedness, and in doing so, they lose their differentiation.
For the last several years, I’ve walked past Panera (a company whose name means breadbasket) and been increasingly perplexed (and saddened) by their assortment. Salads (OK), Bowls (I guess), Chicken Sandwiches (really?), and then pizza (come on!). It seemed like the chain was just looking at the fastest growing QSR segment from the previous quarter and adding a new space on their menu. Instead of maintaining a distinct POV, the chain became lost in a sea of sameness.
Panera might have recognized this regression before it was too late and are reversing course, but what about your brand? Have you gone down a similar path?
In my experience, the best way to avoid these issues is to have strict and sturdy guardrails in place for your brand early. Clearly state what your brand IS and what it IS NOT. Clearly define your innovation roadmap, including the areas you have decided NOT to pursue. If you have these guardrails in place, its much more difficult to deviate from your path.
Brands I’m Watching
Walmart launched a massive line of exclusive frozen meals in partnership with some Food Network celebrity chefs. Gordon Ramsay, Guy Fieri, Andrew Zimmern, and Kardea Brown each have frozen meals distinct to their cooking. The frozen meals are all $5.94 each.
General Mills has launched a Sam’s Club Exclusive Lucky Charms. The cereal contains a Sam’s Blue Diamond marbit in the mix. Each box contains two 23-oz (1 lb 7 oz) bags of the cereal for $8.22.
So What? Lower prices alone aren’t going to cut it in the retail grocery business anymore. With razor thin margins and consumers tightening their belts, companies like Walmart need distinct and unique offerings to bring people in the door. For manufacturers, this means opportunities are growing for exclusive offers for specific retailers. The question will then be—what gets consumers excited enough to make a visit?
Final Boss Sour is a line of sour cranberry snacks with a retro-gaming theme. The snacks are available in 3 levels of sourness with no added sugar.
Japanese convenient noodle maker Nissin is introducing Gaming Cup Noodle. This hot noodle cup, as a well as a similar Gaming Curry Meshi, is designed for gamers to keep their energy up during long gaming sessions. Both the Gaming Cup and the Curry Meshi contain caffeine, arginine and niacin.
So What? There are 3.09 billion active video game players worldwide, making the gaming sector worth $385 billion. While Asia has the largest number of gamers, the US is #1 in eSports. However, even with all this popularity and money, video games get limited interest from CPG companies. While movie, cartoon or social media tie-ins are common, gaming is still not a major partner. That needs to change. Whole generations of consumers are forming deep connections to games and CPG brands should have a bigger role to play here.
TIDBITS
Instacart reveals the most polarizing foods in the US
Used coffee grounds can make concrete that is 30% stronger
Real estate agent fined $20,000 for swigging milk at home showing
Ranking US states by how easy they are to nibble out of graham crackers
You’ll watch this at least twice: Creating the sound effects of Snoopy making pizza
The best pizza in US pizza cities (let the arguments begin)
Put mayo in your coffee, get a lifetime deal with Hellmann’s
The quest to recreate a 2,000 year old curry recipe
Mental break: How well can you forge the Mona Lisa in 60 seconds?
Lastly, I think the pumpkin spice trend has reached its lowest point yet