Emergent announces retail transformation services

After a year in beta test, Amazon today opens its new high tech retail concept – Amazon Go — to the Seattle public. With it a new era in food retail begins, one that we believe will be transformational on more than one level.

Undoubtedly most of the coming media feeding frenzy will be focused on Amazon’s Just Walk Out technology, and the computer vision, deep learning algorithms and sensor fusion capability that sits underneath their no-checkout-line innovation. Importantly though, at Emergent we’re watching closely how the store is designed and curated to reflect consumer preferences for higher quality, fresh products for either immediate consumption or at-home meal execution.

Food retail has followed a familiar formula for decades, built around a focus on packaged food and pantry stocking. This has defined the shopping experience for a generation. Amazon Go at 1,800 of retail square feet is more convenience store than grocery. But the entire platform is edited to optimize and leverage shopper interests:

1. Everything matters — and consumer insight informed merchandise selections are critical to match the consumer’s desire for fresh foods and upgraded snack and meal experiences. Carefully edited choice is a good idea.
2. An on-premise display kitchen conveys the fresh, culinary inspired fresh preparations people prefer.
3. An array of four to five rotating meal kits brings grab-and-go to full meal solutions.
4. Integration of Whole Foods 365 store brand products offers its own, embedded quality cachet to packaged shelves.

Elimination of the check-out immediately removes friction from the shopping experience. So, yes, we believe this leap will be greeted warmly by people who have better things to do than stand in line.

The most important shift from our perspective is the product curation itself. Grocery stores ask the consumer to conform to its business model, to serve its supply chain relationships and its legacy shopping format – which is more about stock-ups in an era when consumers increasingly shop smaller baskets looking for just-in-time fresh ingredient meal solutions.

With Amazon Go we now have a food retail concept that religiously follows what the consumer wants in addition to how they want to shop (more convenience). The future of food retail must be centered on consumer relevance rather than just a mirror of routine retail infrastructure and traditions.

So today Emergent also announces our retail transformation services, intended to help food retail bring the consumer to the center of business and strategic planning. At a time when Amazon once again changes the game to secure a greater share of food shopping, Emergent’s transformation services for food retail address improvements to brand mission and go-to-market strategies.

Why does it matter? As Kevin Coupe wrote in his announcement story in his special edition of Morning News Beat, as Don Quixote’s sidekick Sancho Panza opined, “Whether the stone hits the pitcher, or the pitcher hits the stone, it’s going to be bad for the pitcher.”

Amazon is the stone. You already know who the pitcher is.

We’re here to help.

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The Four Conditions and Traps Impacting Food, Beverage and Lifestyle Brands

Last year was, if anything, another period of transformation for the food, beverage and lifestyle business as new and emerging brands took the spotlight for innovation and growth. In 2018 the impact of these conditions will require a shift in thinking and planning, as brands, both new and legacy, navigate in a business environment controlled and managed entirely by consumers.

At Emergent we are obligated to stay at the forefront of these cultural changes; providing guidance and strategic leadership to our clients and business community on how best to traverse the unprecedented pace of evolution in consumer preferences and behaviors.

• In this article we will unpack four conditions impacting the future of food, beverage and lifestyle brands in the year ahead.
• And flag four traps that, if left unattended, could dilute desired marketing outcomes.

1. Product narrative IS the marketing

The single most important insight we can provide on marketing and communication is the requirement of story behind the product. Consumers want to know everything – to peer behind the curtain and go back stage to see how things work. That means we’ve entered the era of real-vertising: honest, open communication around ingredients, sourcing, sustainability, quality standards, craftsmanship markers, and product creation providing the litmus test of what should be at the center of brand and business communication strategies.

How does this play out in the plan?

• All messaging and content must work in aligned fashion with social channel integration and community building.
• Consumers believe the opinions of other people – especially those of friends and family members – as they are more relevant to them and operate in their best interests, ahead of a brand’s own published material.
• Thus, aggregation and repurposing of User Generated Content (UGC) will be critical in the brand communication eco-system.
• Video is by far and away the most preferred and shared type of content. No surprise as it is one of the most engaging and entertaining forms of communication in the toolkit.
• The role of influencers and earned media continues to grow because of the trusted source factor that defines what works vs. what doesn’t.
• Digital channels allow for amplification (some of it paid distribution) and repurposing of earned and influencer content, so earned media becomes a more measurable asset in the arsenal.

2. Higher quality is the new healthy

We’ve been saying this for some time as a forecast of further evolution in food culture. It’s now a verified reality borne out in the marketplace. Examples keep piling up of higher quality fresh products and more innovative versions of legacy brands, displacing the latter while the former gains more shelf space. The premium, artisanal treasure hunt marches on!

What’s driving this? Consumers are demanding higher quality food experiences. Cleaner labels, real food ingredients, fresh products, less-processed options secure greater share position for the very reason people believe they are healthier and thus will contribute to their well-being and happiness.

• Indulgent and healthy are no longer polar opposites, and often coalesce together as accepted experiences in a healthy lifestyle. That said, there is a trailing requirement for real food over anything that appears to be overly processed.

For legacy businesses this condition recommends a wholesale rethinking of product platforms, formulations and supply chain in an effort to upgrade and bring greater premiumization to the innovation table.

Related to the previous point about importance of product narrative, if there isn’t a compelling story to tell about ingredients, sources and quality, then there’s risk now to brand relevance. Saying, “but we’ve always done it this way,” or “it’s difficult to change our supply chain commitments” is simply going to put the business in conflict with consumer preference. New upstart, high quality businesses are advancing across a broad swath of categories from staples like mac and cheese to the meat case.

3. Meal kit is the instrument of food adventure

We predict the meal kit business will continue to consolidate and evolve – and that it’s likely food retail will get invested in the business. The fundamental premise of a food kit is consistent with consumer preferences. Consumers are looking for fresher, higher quality meal experiences featuring ingredients with a backstory, and menus that deliver low risk experimentation with new flavors and cuisines.

We also forecast continued improvements to food kit business models making them less onerous on expensive subscriptions, providing greater ordering flexibility and ease of preparation for those who want less challenging menus.

It is food-adventure-in-a-box that gives consumers an attractive meal option and step-by-step instructions on how to execute. That said, as food retailers move into this space with fully prepared, semi prepared or scratch cook alternatives, the advantage of being able to decide a menu at a moment’s notice, we believe, will be extremely attractive to a significant segment of the consuming public.

Simply said, many households don’t plan ahead for dinner and are making preference decisions at 5 pm. It’s a form of impulse meal buying that, if available at an attractive price, will help food retail gain additional shopper traction.

Could this presage more mergers of food retail with food kit operators? Perhaps, so.

4. Snacking is the universal meal occasion

Call it what you will – mini-meal, fuel up or reward – snacking is a predominant behavior across all day parts and is influential in the foodservice channel as well. Snacking starts early and goes late as consumers both young and old graze their way through the day.

Some of this behavior is functional and related to recognition that the human body will periodically experience lagging energy levels requiring replenishment. People now recognize the connection between food and performance, thus a compelling reason to look for hand-held options that deliver energy-enhancing protein in meat, veg and dairy forms.

• Snacking crisscrosses indulgent and good-for-you needs with portions that seem manageable in a healthy living view. (I’m snacking on almonds as I write this).

With added pressure for performance in work, school and outside pursuits, functional snacking is likely to be a major opportunity in the year ahead for innovation. We expect retailers will devote more in-store real estate to brands in this space.

Avoiding traps that take wind out of the sales…

Trap #1 – the inauthentic mission

There’s no question that consumers look for brands with similar beliefs and values. Operating with a mission that transcends commerce itself is now a marker of a brand’s cultural relevance.

In many instances new and emerging brands are built alongside a mission designed to benefit others and contribute to making the world a better place. Authenticity couldn’t be more important.

Consumers are able to sniff out posers in relatively short order. Mission is not philanthropy. It is not something that’s bolted on to the marketing plan as a campaign theme because it’s popular now.

A real, human-relevant, and unselfish purpose is a purpose – and in the long run devotion to it will indeed maximize financial performance. Absence of real beliefs here is a trap.

Trap #2 – marketing over meaning

Want to build a closer connection with core customers? Then imbue the brand with greater meaning based on relevance to their lifestyle passions and interests. Consumers can’t be viewed as walking wallets nor should the marketing plan stray towards looking at the customer relationship as purely transactional.

The brand’s voice gets added value when its connected to the consumer’s interests, be that their love and relationship with a pet, passion for outdoor lifestyle adventures, or desire for creativity in the kitchen.

When the conversation with consumers begins with what’s relevant to them, then marketing no longer looks like traditional marketing. Instead it becomes valued and useful. Conversely overt selling is a trap and path to disconnection.

Trap #3 – trust is at the center, or not

Lack of consumer trust is perhaps the most significant destroyer of businesses over time. Instead, brands built on earning trust gain competitive advantage in the marketplace.

If trust creation is not a core component (active not passive) of the marketing plan it’s time to step back and reassess. Brand relationships today are taking on the give and take characteristics of human relationships. No lying or deception allowed.

To earn trust means putting the consumer’s welfare and wellbeing at the forefront of strategy. Not doing so it a trap.

Trap #4 – do you really know me?

It’s easy to think that as long as the business is devoted to making a quality product and standing behind it, then all is well. Yes, high quality is required. However, there’s more complexity now in building sustainable relationships with consumers.

This goes beyond knowing what flavors they prefer or their patterns of shopping behavior. It’s vital to understand the whole human, their desires, wants, needs, interests and concerns.

Today there are more tools than ever before that permit a closer look at customer lifestyle interests. Making the investment here to get close and gain greater understanding of wants and needs beyond product use, is the link to more engaging brand communication.

Too many emerging brands sidestep this important insight research requirement because the demand for building basic go-to-market infrastructure gets first priority. Yet the very thing that sits at the core of long-term success is neglected: consumer insight and relevance.

Brands are built on the back of mattering. Basing communications on hunches and assumptions about what’s meaningful and valued puts the marketing plan into a blind spot. Avoid the irrelevance trap by mining insight.

The year ahead will be a tug of war between competing channels and sources of higher quality, unique and differentiated food and lifestyle experiences. The winners in this battle for share of spend will fall to those who put the consumer first – and by virtue of doing so reap the benefits of deeper connection.

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The case for super transparency…

For all of the talk about a desire for greater transparency in the food system, much of the pet food world’s product creation work remains behind closed doors. Is it time to open up the curtain and shed more light on ingredients, sources, standards and processes in service of securing greater consumer trust?

Unrelenting premiumization of the pet food business is being driven by the continued humanization of furry family members. At the apex of this anthropomorphic trend is a near lockstep upgrading of pet nutrition formula and nutritional bona fides that closely follow the food culture preferences of people.

No surprise the primary fuel for all of this is a belief held by consumers that the quality of the food they consume impacts the quality of their lives. Therefore, the same rule applies to their pets and the perceived nutritional benefits they can receive in their diets. In sum, people want healthier food solutions for themselves. Pet foods now face the same evaluation.

Thus the current drivers of human food preferences quickly find their way into the pet nutrition business. Chief among them is an increasing demand for transparency. According to a recent study by Innova Market Insights, the number one priority in 2018 for both human and pet foods will be cleaner labels. Innova calls this the arrival of  “Mindful Choice.”

What is that? Health and wellness is the leading call to action. However embedded in this trend are the same concerns people have about the food they personally consume – interest in sustainability, visibility to ingredients and sourcing, ethical production and safety. The Innova research study reports, 70 percent of consumers want to know and understand (human) food ingredient lists. This can be challenging in pet food where historically ingredient decks expressed on kibble packages are lengthy, complicated and employ terminology foreign to most people.

Additionally, the rapid migration of grocery shopping from packaged food center aisles of the store to the fresh perimeter departments is evidence of preferences for real, fresh, simpler food that is less processed. ‘Real’ food ingredients on labels are wanted. According to a recap of Innova’s study published in Pet Food Industry magazine, the number of human food products launched this year with a healthier claim increased to 49 percent. It’s a reflection of the growing desire to address consumer demand for healthier foods.

So, how foods are made will matter. Right now clean label is center stage. It should be noted that ‘clean label’ itself is an outcome of efforts made during product development; work which includes standards for ingredient sourcing, optimizing nutritional benefits, and committing to higher integrity around recipe formulations.

A recent study on the topic by Kerry Health and Nutrition Institute found that:

• 73 percent of consumers read ingredient lists
• 66 percent examine the nutritional panel
• 94 percent say they would be loyal to a brand that adopts complete transparency
• 99 percent say they will also pay more for a product that is transparent

Pet diets are for the most part a highly processed food where the more popular delivery vehicle of dry kibble in varying shades of tan to brown, appears to be identical from brand to brand. Deconstructing the kibble is another matter and it is in this arena where differentiation (and consumer trust) can be found.

What’s needed in pet food: super transparency

The Hartman Group’s Sustainability Report for 2017 says consumers expect companies to “openly share sustainability practices” and 73 percent of consumers are aware of what transparency means with respect to business practices.

Pet food brands with a strong nutritional story to tell could benefit from a super transparency approach. Kibble can’t really telegraph any specific information one-way or other. The ingredients used to make it, on the other hand, present an educational opportunity.

Pet brands that tell stories about ingredient sources, suppliers and product creation can effectively address integrity questions in a meaningful way.  What’s really bubbling underneath: issues surrounding health and quality of life.

Traditionally the pet food industry has operated behind closed doors, but the consumer is asking that the door open more fully. Far enough for consumers to have improved access to knowing more about the ingredient standards and food quality that goes into their pet’s diet.

No question; pet food and people food are not the same thing, even though some brands would like you to believe that the steak you had for dinner is inside the kibble bag.

• When higher quality pet food makers take their commitments and standards on ingredients and bring them to life, they can improve their ability to secure trust and belief from the humans selecting foods for their four-legged family members.

Ultimately the desire for product transparency is a demand for validation and evidence of what most pet brands claim in their package messaging. The move to super transparency (which really means taking the consumer behind the product creation curtain) is a way to bring better understanding about what their pets are eating. And yes, pet parents truly care about this in the same way they care about how foods are made that they eat themselves.

Super transparency is now a furry business-building opportunity!

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A Turkey that shows its marketing intelligence…

Awhile back we took note that actor Matthew McConaughey had signed on with the Wild Turkey brand as marketing and creative director. Seemed at first like a bit of a stunt, however if their latest venture is any example, this pairing has inspired some relevant thinking served with effective outcomes.

So often in the adult beverage and spirits category we see the same tale told about distilleries and barreling, liquid aging and founder legacy. You can almost write the pitch from brand to brand and interchange the names; it’s an old saw of sameness laced with differing graphic elements.

• But marketing has evolved in the face of seismic changes in how consumers behave and how their relationships with brands are built. Authenticity counts – as we heralded in our last post. So, how does this play out in the real world with Kentucky bourbon? McConaughey and his colleagues at Wild Turkey mine the zeitgeist of deeper connections and meaning with an inspired idea to bring fresh turkeys at Thanksgiving to nearly every household in their headquarters town of Lawrenceburg, KY.

Two hundred and fifty employees fanned out to bring 4,500 Butterball®-donated turkeys to homes – while a video crew captures the adventure in real time with McConaughey ringing doorbells. Local families opened their front doors in astonishment as the Hollywood moment unfolded in front of them.

First, the video is surprising and engaging. McConaughey himself is humanized in his role as the deliveryman of holiday cheer and thanksgiving. The reaction of people experiencing the moment was emotional, and we get to participate with them in their amazement at the generosity and celebrity touch.

The video itself is simple and captures the experience as it occurs. There’s no overt brand messaging in the traditional sense. But there’s more going on here than meets the marketing eye. It’s engagement and mattering when so much of what passes for marketing misses this objective.

We witness straightforward, honest, entertaining and emotional communication with real human value at its core. Just brilliant. This will do more for the brand than a 100 of the bottle beauty shot ads with a glowing amber pour. It’s inspired thinking that honors how marketing has changed in the era of relevance to consumers and their lives.

Additionally, Wild Turkey also donated 50,000 Thanksgiving meals to Share our Strength and another 580 turkeys to the town’s food bank. The entire project served as a launch pad for their “Friendsgiving to End Hunger” campaign aimed at securing additional matched donations to the charity partner. Here’s the sign-up landing page.

Watch the adventure here:

Perhaps we could call this approach real-vertising. It’s unexpected, honest, authentic and told in real-people terms. The Turkey distribution is a worthy cause and backed by extensions that help others in true need. Great thinking. A higher purpose served.

As someone who has never been much of a bourbon drinker, I feel compelled to go out and purchase a bottle. And that’s saying a lot for someone who considers himself more of a creative critic and creator than marketing target.

Hats off, Wild Turkey!

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Is PR ready to move from instrument to orchestra leader?

Perhaps the harshest lesson for anyone in food and beverage marketing is the stark realization that persuasion no longer works. Persuasion was a welcome, business-friendly concept because its DNA was founded in brand-built, self-promotional messaging: here’s our product and why you should buy it.

Cultural shifts and behavior changes have transformed the shape of effective marketing from “talking at” consumers to “helping guide.” Consumers now rule the relationship – thus forcing changes in today’s marketing best practices and the service mix provided by agency partners.

Consumer shifts demand integrated communication solutions

When I first started in the agency business, public relations was primarily the sum of its media relations parts. Editorial media placement defined the marketing PR discipline, springing from its press agent roots in the post World War II rise of global agency companies. As the consumer packaged goods industry grew so did public relations. Its value exemplified in the context of cultivating third party, credible advocacy by a journalistic media source – one that was perceived to be unbiased and thus believable.

• The marketing PR theory at work then: people in all demographic segments would consume media in print and broadcast forms to engage in the content – news or entertainment – while ads revolve around the perimeter searching (again and again) for attention. Getting your product talked about in the well of content was the ultimate in “intrusive” message delivery; wearing the aura of independent, reportorial endorsement. Controlled message and frequency were never in the equation like advertising, however, extended and cost-effective reach lived within its core proposition.

Mass media lived well with mass communication strategies.

Ogilvy (I was there for 11 years), in an effort to gain greater effective traction on behalf of its consumer branded clients, built an integrated proposition called Ogilvy Orchestration. It was an effort to bring symmetry and alignment between ad, PR, promotion and direct marketing services. While the concept had merit, its execution occasionally misfired due to competition between the various operating companies jockeying for the pole position of strategic client leadership. It was an early form of integrated thinking, yet, more about creating synergy among agency disciplines than a concept built to optimize and leverage consumer behavioral insight on the client’s behalf.

Digital changed the world: the old model lost traction, and a new one arrived

Let’s start by staking a claim: integrated communications – built around consumer lifestyle relevance – is the path forward for effective brand communication.

The consumer, for the most part, is in charge of how, when and where they engage in any and all brand messaging and hence, are in control of the relationships they choose to have with brands. Hence the tools deployed might blend earned media in the form of publicity, or branded content, or social channel conversation, or influencer engagement, or improved forms of advertising built around help over hype.

There’s an old adage, if the only thing you sell is a hammer then the answer to every problem is a nail.

So true. The Internet has facilitated consumer control over media channels and consumption. So there is easy avoidance of anything that walks and talks like traditional marketing. This condition ushered in a new marketing paradigm and tool kit – a decidedly less transactional model founded in relevance to consumer lifestyle interests, passions, needs and concerns.

Along with it, the current digital media eco-system literally demands a more conversational, straightforward and authentic form of communication. I would argue that PR brains are well suited to this task given the history of focus on editorial sensibility around “educating” versus the conventional solution leaning into cinematic salesmanship.

Today, brands must become partner, coach and guide to their audience as an enabler of their lifestyle goals. It is in this method of marketing reciprocity that more meaningful relationships between brand and consumer can be formed. It begs and answers the strategic question: in what ways can the brand improve the customer’s life?

At Emergent, we appreciate the shift to mattering and deeper meaning, rather than singularly advancing product features and benefits. The mattering construct requires businesses to fully operate in the customer’s best interests – which historically was a core principle that sat underneath the value proposition of public relations.

Implications to the planning model and agency

We believe integrated communication is a fundamental requirement for effective marketing strategy. Agencies that understand and can execute this fully will remain a vital and valuable resource to clients.

That said, it requires some modifications in operating behavior from the typical PR model of fielding tactical teams of publicists and creators of editorially-sensible material.

Integrated communications involves assembling an orchestra of expertise: part management consultants, part behavioral research experts, part brand strategy planners, part creative and producers of relevant content in a variety of media forms.

So, for clients and agencies looking to leverage integrated communications in earnest, the talent mandate must answer the call for integrated thinking. Inevitably, this will redefine the skill set requirements for firms who expect to provide the highest levels of value to their clients.

Integrated thinking informs integrated plans, which leads to successful integrated execution.

In Part 2 we’ll take a closer look at the elements of the new integrated marketing tool kit.

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Bridging the divide during historic change in food and beverage…

When we launched Emergent, it was based on an overwhelming body of research and marketplace evidence that food and beverage brands are in a state of transformation and thus, in need of new, fresh, refined and more relevant business-building solutions.

Of all the issues creating change, from the demand for transparency and clean labels and fresh foods — healthier lifestyle is the dominant driver that is impacting the consumer’s desire for improvement in the food and beverages they prefer.

Cultural shift makes healthier all-inclusive

Historically, the food industry’s approach to ‘healthier’ was an addition-by-subtraction model based on removing so-called bad ingredients like sugar, calories, sodium and fat; AKA the ‘diet foods’ business. For consumers, though, this often meant sacrificing taste and eating satisfaction. Which they did. For years. This was bound to be problematic because it existed in conflict with the embedded human desire for great taste and indulgent food experiences. Guilt only goes so far.

However, pervasive changes in global food culture caused the concept of healthier to shift. The good-for-you proposition began to look more like addition by addition. Healthy was restaged to focus on real, fresh, authentic, higher quality, less processed foods – more so than food science wizardry. Healthy became inclusive, lifestyle oriented and user friendly.

• The root cause of change: consumers connected the dots between the quality of what they put in their bodies, with how that fuels what they’re able to do, and hence, their ultimate happiness and wellness.

As consumers became more engaged in higher quality food choices, it resulted in the widespread premiumization of many food and beverage categories. At the same time, media consumption habits shifted to social and digital channels controlled by consumers rather than brands.

We believe an agency devoted to mining this insight and bringing fresh thinking to the table is needed to offer meaningful guidance in the midst of this sea change.

New implications to the food system are reshuffling the industry:

• Large cap CPG brands have experienced share and volume declines in core legacy categories. Consumers are moving away from anything perceived as highly processed or made from ingredients they don’t understand.
• New emerging brands built on higher quality, fresh and real food ingredient solutions have grabbed the spotlight to reinvent everything from frozen meals to grain-based snacks.
• Food retail shopping behaviors have shown a significant shift to the perimeter of the store as consumers increasingly look for fresh, real food products over center store packaged options. They’re also increasingly shopping more frequently for meal solutions over pantry stock-ups.
• Meal kit solutions have taken share in food, by virtue of offering menu solutions derived from high quality fresh ingredients, married to easy preparation steps. Convenience meets culinary inspiration and taste satisfaction.

Time for transformation

We know that new, emerging, purposeful brands are gaining traction and attention in kitchens across America. So we visibly witness the dawn of a true food renaissance taking place around us.

1. People are coming back to the kitchen, looking to exercise their creativity and control over preparations, freshness and quality of ingredients.
2. We’ve entered a period where transparency, health and wellness, safety and authenticity drive purchases more so than the legacy stalwarts of price and convenience.
3. We know the founder’s backstory and commitment to a real mission beyond the product itself is a critical component of the new brand marketing playbook.

We‘ve operationalized our understanding of what these changes mean and how to create traction in a fast-changing business environment.

Emergent’s value proposition

We’ve developed a proprietary planning model that reflects this understanding; one that demands a new approach to how brand relationships with consumers are formed, and thus, how effective brand communications should be created.

• We are experts in this space; our services are aligned with answering these challenges.
• We help legacy brands challenge conventional strategies and re-stage to optimize today’s conditions and help new brands accelerate their growth. We understand the consumer and how they think, how they behave and how they consume information.

If your marketing communications plans look exactly the same as last year’s, the time may be right for fresh thinking. We exist to help brands and businesses navigate and grow in the midst of transformative changes in purchase behavior. We can help you take the leap to increased relevance and alignment with this new marketing paradigm.

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