The New Rules for Building New Food and Beverage Businesses

Emerging brands operate differently than legacy businesses. The path to market, to consumer interest and traction, is simply not the same as products with an established franchise in a category with deep roots.

The emerging brand playbook is governed by a distinctive rule of engagement – one that reflects a shift in consumer food culture to place greater stock in product experience over marketing and messaging wizardry fueled by tonnage of media spend.

Message to entrepreneurs who create new brands and large food companies seeking to acquire and scale them: put the traditional brand marketing game plan aside. Different rules prevail.

What’s driving the importance of this conversation now?

We are in the midst of a tectonic shift in the food and beverage business, favoring the growth and development of new independent brands that create their own distinctive categories.

The top 25 food manufacturers in the U.S. lost 300 basis points to small and medium sized players from 2011 to 2015. At the same time top line revenue growth for the nation’s largest food companies has slowed to 1.8 percent while smaller organizations have been gaining sales ground at an 11 to 15 percent clip over the same period. (Source: Hartman Group)

What’s going on here? Food culture shifts have run roughshod over businesses that at one time were stars in the food popularity contest – and rendered them less so. While new brands that integrate higher quality ingredients with deeper meaning and values, now take the lead in relevance to consumer desires. The consumer is clamoring for more unique, healthful, higher quality food experiences.

As a result, the largest food companies seek to buy their way in to this sea change through strategic investments and acquisitions. The equity investment market for emerging food companies is robust as innovative disruptors move into fresh and packaged categories with new and adventurous solutions-with-an-ethos.

These emerging brands live and grow by different imperatives than the ones generally thought to govern best practices in the CPG world. For the last 50 years, the brand-building rulebook has directed much of the thinking on marketing and communication: focused on creating equity and value in the brand.

But this emerging business world is much different and requires a fresh approach that is mindful of how early adopter consumers seek out and become fans and followers of these rising star foods and beverages.

Primacy of Product Experience

Which comes first, brand or product? In the brave new world of nascent foods and beverages, it is the fundamental design of these products that imbues them with uniqueness and differentiation to the established, mainstream stalwarts. And it is this specialness in experience that puts momentum under their sales and adoption.

Says the Hartman Group in their study on early, middle and late stage brand development: “Food culture has the knack for magnetically extracting the most unique and engaging food experiences from the clutter on the (store) shelf.”

This helps explain why emerging food and beverages that suffer from low to nearly no brand awareness thrive through their natural allure. The explanation for this is their systemic, beautifully curated connection to health and hedonic (indulgence) ideals and symbols now thriving in our food culture.

Beanitos – a cultural cue connection

In the packaged snack category Beanitos connects to emerging cultural preferences for nutrient and protein dense options. In this instance it’s the alternate carb base – beans – that forms the basis for its relevance and uniqueness. The symbolism creates its attraction: for smart, clever salty snackers.

The Three Rules of Emerging Food Brands

Rule #1 – Product Symbolism. It is the heart and soul of an emerging brand identity. The successful ones will connect directly, seamlessly with an up-and-coming insight into evolving food culture. Click here for our recent forecast on eight food culture trends impacting the growth of food and beverage businesses.

Rule #2 – The Importance of Channel. Natural and specialty retail serve as incubators for these developing stars. Consumers shopping higher-end retail are already on the hunt for truly differentiated experiences. They bring a more informed approach to food exploration. Simply said, these shoppers EXPECT to encounter interesting, new products.

Word to food retail: be the champion of these new experiences, and let food adventure inhabit your aisles.

Rule #3 – Product-Focused Communication. You are working to build awareness of a differentiated product experience. Sensory trumps brand. The focus is on product news and backstory – ingredients, sourcing, recipe and mission/beliefs.

Learn more by reading Part 2 of The Emerging Brand Marketers’ Playbook.

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Bob Wheatley is the CEO of Chicago-based Emergent, the healthy living agency. Emergent provides integrated brand strategy, communications and insight solutions to national food, beverage, home and lifestyle companies.  Emergent’s unique and proprietary transformation and growth focus helps organizations navigate, engage and leverage consumers’ desire for higher quality, healthier product or service experiences that mirror their desire for higher quality lifestyles. For more information, contact [email protected] and follow on Twitter @BobWheatley.