FoodStuff by Kevin Ryan
What Makes Brand Extensions Work? Plus, Nostalgia is Dying
Here is a link to my last newsletter, in case you missed it.
In this week’s issue:
Brand extensions: First understand thyself
Personalization: Pricing, not Products
Decline of Nostalgia: Looking back is so yesterday
Gut Reaction: My quick take on the best (and worst) in new launches
Interesting Trends: What’s popping up
Tidbits: The latest in food industry news, from the profound to the funny
What Makes Line Extensions Work?
Pringles (a Kellanova brand) is launching Pringles Mingles, the brand’s first foray into extruded snacks. The bow tie-shaped chips are described as ‘light,airy and crispy’ and are available in three flavors: Cheddar & Sour Cream, Sharp White Cheddar & Ranch, and Dill Pickle & Ranch. They’ll be out in October.
Chex Mix (a General Mills brand) has launched Chex Mix Remix, a line of new combinations of flavored snack pieces. For example, Cheesy Pizza Remix combines Pizza Sauce Chex, Pizza Crust Bagel Chips, Cheese Puffs, and Garlic & Herb Chex. Other varieties include Buffalo Sandwich Remix and Zesty Taco Remix.
Retail cookie maker Crumbl looks to be experimenting with a new snack offering: frozen Crumbl Cookie Dough Bits. The chocolate chip dough bites come in an 8-ounce package ($6.99), stored in the store’s freezer case (i.e., no new infrastructure needed). Available currently in only one store in Louisville, Kentucky.
Starbucks, together with Arla Foods, is launching a RTD line of Protein Drinks with Coffee into the UK market. The 330ml bottles (£2.75) each contain 20g protein and come in three varieties: Café Latte, Chocolate Mocha, and Caramel Hazelnut.
Chickpea puff maker Hippeas has launched two new LTO flavors, Mexican Street Corn and Churro.
So What? The secret to great line extensions and brand expansions isn’t just about focusing on the future of the brand but about first anchoring in the past.
I’ve been brought into the room on countless ‘post-mortems’ of failed launches, and I can tell you that the #1 reason most brand stretches flop is because they ignored what makes the original product so loved in the first place.
When you consider a brand expansion, you must first strip down the total product offering to its fundamental truths (often found in well-written brand pyramids/onions). Take something like Oreo. Its magic isn’t specifically in two chocolate wafers and vanilla crème. It’s in the playfulness of the separation of the wafers and juxtaposition of the crunchy with the smooth. Provided with this base definition, Oreo then has permission and direction, but also guardrails, to create new flavors and forms. In fact, when they’ve faltered, it’s when they’ve ignored these fundamentals or strayed too far too fast from them (e.g., Fudge Cremes aren’t really sandwich cookies, Cakesters don’t have the contrast or the fun, etc.).
I think many of the new products above understand their core fundamentals. Chex Mix is about snacking discovery (with the obligatory Chex piece) and the ability to ‘choose your own snacking adventure.’ Starbucks is about offering stacked benefits on top of your favorite coffee flavors. However, where it falls down for me is with the new Pringles Mingles.
My guess is that Pringles is seeing some serious headwinds from ‘lighter’ popped snacks, like popcorn and Lay’s Poppables. So, they decided to launch a counterstrike. However, I don’t think they captured the first principles of the brand. In my opinion, Pringles are about interactive fun due to their unique shape and stackablity. Much like Oreo, there is a playfulness inherent in the experience of Pringles that must be present in any line extension. While I’m sure Pringles’ managers see bow ties as very indicative of the brand, I doubt if that’s true for most consumers. Plus, there is nothing fun or interactive about bow ties. Can’t you puff a hyperbolic paraboloid?
Don’t make the same mistake with your brand extensions. Spend the time to uncover the core essence of the original product, then use it to build a bridge to the future.
The future of personalization isn’t in products, it’s in pricing
Last year, a Belgian investigation alleged that Uber was charging users more for rides if the app noticed that their battery was low. The idea being, if your battery level was critical, you would be more willing to pay a higher amount (Uber disputed the claim).
Welcome to the world of algorithmic pricing; welcome to the future of food pricing.
Back in 2019, McDonald’s announced an investment in the New Zealand mobile engagement company Plexure (used by a number of retailers and QSRs, like IKEA and 7-Eleven). Plexure is the brains behind McD’s popular mobile app and a pioneer in algorithmic pricing (see a slide from their pitch deck below). A recent American Prospect article profiled how McD’s app uses a low price to entice customers, then turns to ‘deep personalization’ to engage them. This includes leveraging info on “[t]ime of day, food preferences, ordering habits, financial behaviors, location, weather, social interactions, and “relevance to key moments i.e. pay day.” In other words, McD’s app can offer you a personalized price based on it’s deep knowledge of your ability and willingness to pay.
Are you familiar with Google Ads auction? Put simply, every time you type a search on Google, a computer bidding war starts. In nanoseconds, companies look at your search query, your search history, and all the data they have on you, and they bid on being the first ad you’ll see when Google returns its results.
Now take that concept and move it into the real world. Soon, we will see fewer endcaps shouting one price to everyone. Instead, each of us will individually be pushed unique deals (in-store or online) based on everything from the time of day, the weather, our appearance, and how much data the retailer or manufacturer has on us. Gone will be the days of ‘set price,’ instead there will be AI algorithms running arbitrage simulations to entice the right consumers to brands and achieve the most profit.
Why is this happening now? The short answer is because it can. Technology advancement coupled with increasing margin pressures for retailers, manufacturers and restaurants, makes utilizing individual consumer data more profitable. Not only that, but as consumers gain their information from more diverse places, the ability to target them individually increases. Algorithmic pricing would not have been possible 40 years ago when everyone was reading the same newspapers or watching mainstream TV. However, now that we all have our own phones and tablets as well as smart TVs, the ability to push unique prices to each of us based on our own data is possible (now you understand why Walmart just bought a smart TV operating company).
For retailers, this is a potential gold rush. While some in the business see the pending Albertsons-Kroger merger as two smaller Davids trying to protect against the reach of the Goliath Walmart, others see it as a data battle. In our ‘post-cookie era’ where tracking consumers anomalously online has become more difficult, the new frontier is ‘1st party data’ from consumers that retailers and QSRs are swimming in (i.e., all those shopper cards and programs). This is why CPG companies are at a disadvantage. With the retailers and QSR companies running the last mile, they have all the data, and all the potential for algorithmic pricing.
What that leaves us with is every retailer or QSR becoming their own Google auction house. As consumers come into a retailer or go online, the stores will be able to hold an AI bidding war, pitting manufacturers against each other to offer the best deal (with retailers themselves having their PL brand in the race). To avoid or mitigate this scenario, CPG companies need to be war-gaming this future now. How can CPG companies get to the consumer first? How can CPG companies work the algorithm in their favor?
Personalized, algorithmic pricing is coming, and it will change our entire industry. What are you doing to prepare?
The Decline of Nostalgia: Why Sentimentality Is Getting Harder to Sell
Organic cold pressed juice company Suja Life has announced that they have acquired the popular 1980s fruit-flavored soda company Slice. Details on the future of this combination are sparse, however the company announced that Slice may return as a low-calorie, gut-friendly beverage in 2025.
Classic toy brand Care Bears has partnered with extreme candy company Warheads to launch Sour Gummy Grumpy Bears. The candy is sour throughout, and blue raspberry flavored, but also coated in Warhead sour powder. In stores now.
Skippy, a Hormel brand, announced last month that they are returning to Canada. The brand will introduce 5 new product forms, instead of jarred peanut butter. One launch will be Crispy Thin Potato Cookies (sandwich cookies with a layer of peanut butter), available at select Canadian Costcos. Additional launches will include Multigrain Peanut Butter Cookies, Peanut Butter Cookie Sticks, and Dynamite Peanut Butter Cookie Sticks (with popping candy).
Bakerly, makers of shelf-stable brioche, crepes, and pancakes, is launching PB&J crepes to go. The individually wrapped crepes contain a layer of peanut butter and grape filling. Available online as well as at retailers such as Target and Publix.
Trader Joes has launched Panzerotti Pizza Bites. The company says the frozen ‘lightly fried’ snacks “take the concept of “after-school pizza rolls” and elevates it to flavorful new heights!” Made from a mozzarella cheese blend and Italian tomato sauce, the bites are imported from Italy.
Speaking of Trader Joes, the company is relaunching their Cheddar Macaroni & Cheese (now in Annie’s purple). Contains macaroni and naturally colored cheese sauce.
So What? Nostalgia sells, or at least that’s what trend companies have been telling marketers for the past 5 years. Every trend deck I’ve seen in recent memory reassures me that Millennials and Gen Z are excited by nostalgia and have an insatiable appetite for reliving the past.
However, I’m going to call this one: nostalgia is dying. Just like everything in the modern consumer industry, we’ve beaten the nostalgia horse to an inch of its life. Consumers have finally reached their breaking point. Movie sequels and spinoffs are floundering (e.g., Furiosa) and, from what I’m hearing, the ROI on old food brand relaunches is declining.
Why? I think a lot of nostalgia fatigue is due to over-saturation. Not only are consumers seeing more brand rehashes, but they are living in a technology nostalgia bubble. Everything from our iPhone photo widgets to our social media feeds are showing us a constant loop of material from the past few days, weeks and years. We are drenched in countless yesterdays; it’s getting old.
Additionally, consumers have just gotten savvier about the use of nostalgia in marketing. While at first it might have been joyous to see a flavor or brand you remember from your childhood, now consumers see it for the cash-grab it is.
However, that doesn’t mean every reboot is doomed (e.g., the success of Barbie). But nostalgic executions need to offer something substantial beyond just another trip down memory lane to be successful. They must offer a significant twist, a new benefit, or unique ‘reason to be’ that compels purchase.
So, for now, shelve those retro boxes and relaunches and either invest in something radically new or find a new benefit to attach to an old theme.
GUT REACTION
INTERESTING TRENDS
Best Cereal has become the UK’s fastest growing cereal brand since launching earlier this year in Tesco’s. Best Cereal is the result of a partnership between popular YouTube collective The Sidemen and British cereal maker Mornflake.
You are seeing similar influencer-based marketing with Special K’s recent partnership with food celebrity Molly Baz and her on-box pregnant photo.
I’m not sure why US cereal companies aren’t following Mornflake’s example and giving the reins to an influencer to launch a full cereal sub-brand. Instead of cameos, cereal companies need to be more vulnerable and #makecerealcoolagain
Breyers (a Unilever brand) is calling their CarbSmart product an ‘Anti-Aging Cream’ in their new campaign (even going so far as showing the product in a skin cream jar). Their rational is that it makes you feel ‘young at heart.’
What?
The connection between aging and frozen desserts is so tenuous here to shake all credibility. I understand that aging well is about enjoying life’s ‘simple pleasures’ but the dock and link here between the product and the message is too convoluted. We need more steps to follow this narrative. Plus, calling it ‘anti-aging cream’ when the product isn’t even legally ice cream feels like a lawsuit waiting to happen. Overall, I’m just left confused by this (and I’m thinking consumers will be too).
Speaking of why did they go there, Ferrero is launching a plant-based Nutella in Italy this summer. First, raise your hand if you thought Nutella was already plant-based? Yeah, me too. Apparently, it’s the milk powder that’s an issue. The reason that I’d be cautious here is that Nutella is one of those foods that people WANT to assume is better for you than it is. They buy it and decide to never flip it over and look at the back (I mean, it says ‘nut’ in the name so it must be healthy?). Drawing scrutiny to the label might not be ideal, especially because calling it plant-based might make people think there wereother animal products in there. I’d go for ‘dairy-free’ first.
I’m intrigued by companies that take an elemental characteristic of a product/category and find a way to plus it up.
For example, Barn Bros in the UK sells a range of chicken eggs differentiated by small but significant characteristics. In addition to free range eggs, the company sells British Barn Raised Eggs and, just recently, launched Fairview Farms White Gold eggs, distinguished by bright white shells and extra golden yolks. Selling eggs based on yolk color is a cool way to differentiate at shelf.
Or look at Low and Slow, a Dallas-based potato chip company that smokes their potato chips over real hickory smoke. In a category that’s all about powders and artificially bright colors, the move to real here is compelling.
Sometimes there are innovation possibilities in the smallest details.
TIDBITS
Gaining immunity from poison oak by eating it
Beer brands are fighting back against cannabis by making weed beverages
The lunch rush is dead as Americans live for the weekend
Cava joins SweetGreens in growth, so is lunch dead or not?
However, restaurants are having their best year yet
$400 pineapple and the rise of luxury fruit
Hims debuts $199-Wegovy shot
The French post office releases a scratch and sniff baguette stamp
The real reason Red Lobster fell: private equity and real estate
How Aperol marketing beat out Campari to became the ‘it’ drink of the summer
The cult of Hampton Inn’s free waffles
When do you think the US economy was at its best? Tell me your age
Cutting edge of health: building a digital twin
Speaking of, Zoom wants you to send an AI digital twin to meetings
There is a new American cheese in town and this time its artisanal
Brands are backing off from taking political or social stances
In case you need more proof of the power of private label, store brands are winning
Walmart Realm has launched, a virtual shopping experience
Amazon Drones have received US flight approval
Taco Bell launches a Cheez-It 16X normal size
The latest cryptocurrency? Costco Hotdog
Speaking of the Costco hotdog, the company said it’s $1.50 price point is staying put (for now?)
Fun video on the real factory workers that make Smarties candies (US not UK Smarties)
Dr. Pepper is now tied with Pepsi as America’s #2 soft drink
Poppi is being sued for not being gut-healthy enough
McD’s Big Mac prices have risen 21% since 2019
Chobani founder and CEO buys Anchor Brewing
McD’s loses Big Mac trademark--Supermac’s vs McD
The multi-billion dollar maple syrup cartel
The doctor who invented calorie counting and what it did to us
Scientists have discovered a new color of cat (how is that food related?) the coloring is called ‘salty liquorice’
Next big pastry trend: Onigiri Croissants