Superior Switchel + JTM Scale

If you’ve been tracking with us this summer, we’re in the midst of a series that focuses on the local Minnesota food and beverage start-up scene. This time around, we feature Superior Switchel and its founder Melina Lamer, the recipient of the inaugural JTM Scale Award. Over the past year, we had the opportunity to partner with this local entrepreneur to identify ways to propel the brand forward.

WHAT IS SWITCHEL?

The product itself is a key factor in Superior Switchel getting “the W” last year. Switchel is a refreshing, thirst-quenching beverage that is based on simple ingredients: carbonated water, ginger, apple cider vinegar, and a natural sweetener like maple syrup or wildflower honey. Lamer’s take on the 17th century recipe is unique and flavorful, with three variations that suit replenishment for many occasions—Honey Cinnamon Kick, Orange Maple Splash, Lavender Lemon Lift.

In addition to taste, Superior Switchel plays in the rapidly growing functional beverage category. As consumers continue to look for ways to use food as medicine, Superior Switchel offers a number of health benefits: it boosts recovery by replacing electrolytes, supports immunity, digestion and can help promote energy. As we’ve seen Kombucha take over the ready-to-drink (RTD) space on shelf, the broader category of shelf-stable functional beverages is $3.3 billion in sales, an increase of 11.7%. And Superior Switchel is shelf-stable, with the added perk of being delicious both hot and cold!

PARTNERING TO PROPEL

We were both new to this approach to partnering, and we spent time early on to identify how to best leverage the $75K JTM Scale award to impact the Superior Switchel business.

Brand work can be tough for an entrepreneur to commit to with an agency – it is real money for resources that can feel a bit…intangible. But as a rapidly growing brand, we knew it was critical to do this work upfront – especially as the Superior Switchel story was beginning to be told by people other than Melina, who does so with passion and expertise.

Expo West is a huge opportunity to gain exposure with retailers, investors and industry influencers. So, it was exciting to help Superior Switchel bring the refined brand work to life at this years’ event – and in a way that was repeatable for other important tradeshow opportunities throughout the year. The right event strategy is an important avenue for emerging brands. Being at the right place, at the right time, with the right product to build awareness can accelerate growth.

Superior Switchel at Expo West

For many entrepreneurs, social media is part of how their brand was built. Regardless of personal appetite for social media, it is often a necessary piece of the puzzle as the business grows, and approaching it through content strategy becomes more important in order to scale appropriately. With the goal of maintaining a high level of ongoing, quality engagement, we worked with Melina to develop a strategic framework for thinking about her channels and social presence strategically– and one that made planning out future content both simple and scalable. To supplement her current approach, we provided assets that could be dispersed in timely, relevant ways.

WHAT’S NEXT?

In reflecting on the last year of work, it is pretty cool to see how much one entrepreneur can inspire so many advocates around them. Through Melina’s personal story, passion and dedication to her business, our team was energized by our partnership. It was easy to want to do more and to go further, which is a testament to the brand she is building. It’s also a reminder that advocates can become resources – through a formal partnership or by leveraging this community of food experts in the local community.

 

Global Insights to Share

On our recent trip to Paris for SIAL 2018, the largest international food and beverage innovation show, we had the chance to sit in on a few very compelling seminars. A global study of consumers’ behaviors, attitudes and expectations regarding their food were the focus of “Food 360”, a breakout led by Kantar TNS and conducted exclusively for SIAL.1

WHAT’S HAPPENING?

Led by Kantar TNS, one of the world’s largest research agencies with experts in over 80 countries, the 2018 multi-country market report represents a wide range of geographies: the UK and the USA, Russia, China, Middle Eastern countries, Southeast Asian countries and a range of countries in the EU.1

With the intention of understanding what most motivates consumers around the globe when it comes to food choices, three key factors emerged: Taste, Truth, and Meaning.1 Right off the bat, those sound “right on”, don’t they? Interestingly enough, how those words translate varies by region. This illustrates how important it is to really dig in to understand the ever-changing nuances in what matters to consumers and how they define those when it comes to food products.

HOW DOES IT TRANSLATE?

Taste: As defined by the quality of food products – flavor does matter! In fact, it is #1 across the globe when it comes to consumers’ expectations and behavior. But taste encompasses more than just flavor – it spans a broader definition that implies a holistic experience with taste. In this study, different regions prioritized the below factors when defining “taste”:

  • Varying Meals and Flavors
  • Balanced Diet
  • Good Quality Foods

Truth: Transparency. This is clearly articulated in different ways based on the region and the variation may be based on consumer and food supply sophistication. Regardless, it’s clear that consumers want more sightline into the food products they choose. When it comes to “truth”, different regions prioritized these factors:

  • Origin (including Ingredients List!)
  • Farming / Breeding Conditions
  • Food Safety
Terra Creta Olive Oil (42 varieties identified)
Terra Creta Olive Oil (42 varieties identified)

Meaning: Food choices that align with personal values is becoming more important. As with personal values, the range of what encompasses values broadens at the global scale. The topics / issues remain in the same realm but the actions to support (or negate) them requires a closer finger on the pulse of the people and culture. As defined by different geographies, the factors that align with “meaning” are:

  • Biodegradable / Less Packaging
  • Farmers + Breeders Compensation
  • Animal Well-Being

WHAT WE THINK

The intuitiveness and familiarity of the results shared do not diminish their importance. In fact, it further supports the significance that food choices play in a consumers’ life and that these choices are becoming not only more integrated but also more personal. While Taste, Truth and Meaning are rather familiar based on trends in this industry, they are not simple “factors” and should encourage us all to stay curious about how consumers think and feel about choices when it comes to food products.

WHAT’S NEXT

Spending a day in the life of a farmer sheds light on the incredibly complex and dynamic business we know as agriculture. The next generation has new, steep challenges ahead that will lean on innovative thinking and a purpose-driven approach.

[1] “Food 360: 2018.” Kantar TNS. Kantar TNS: SIAL, Paris. October 2018.

Your brand is your foundation

It was a curious scenario: the company had incorporated digital advertising into its marketing program, sales were up and the return on ad spend had increased. But brand affinity was in serious decline (brand affinity being a metric that lets market researchers make predictions about how a consumer will behave).1 In fact, a relevancy study showed their flagship brand was in the bottom third of 400 measured brands.

Speaking at the Association of National Advertisers’ (ANA) 2017 Masters of Marketing Conference, Clorox CMO Eric Reynolds recalls finding himself in a situation many corporate marketing teams are currently facing. By focusing almost entirely on short-term objectives, Reynolds says their marketing and advertising became very rational and very functional.

“In a time when we have all this data and technology…why is our brand effectiveness failing? We would argue it’s because we forgot about brands. Customers didn’t fall in love with [our] brands.”

It’s an all-too-common story. In today’s ROI-centric business environment, the value of brand building has been forgotten.

Chart: Brand Building and Sales Activation Work Over Different Timescales

BUT WHY?

In the last few years, there has been a fairly significant change in effect from long-term to short-term brand activation.

Not long ago, long-term brand building accounted for 69% of brand relevancy. But according to recent studies from Les Binet and Peter Field, that impact has been reduced to 47%, as short-term activations have risen from a 31% to a 53% majority share.

And that’s problematic. Because brand building does more than shore up brand awareness, brand preference and even, in some cases, increase sales. Brand building is critical because strong brands command a higher price and ultimately lead to long-term sales growth.

WHAT WE THINK

Brand building is the most important strategic marketing priority to ensure long-term profitability.

We understand that in today’s business environment, demonstrating ROI on marketing and advertising investments is more important than ever. While brand building efforts may not necessarily increase revenue in the short-term, doing it effectively allows companies to charge higher prices over the long-term. And increasing profits, not just sales, is the ultimate return-on-investment.

WHAT’S NEXT

Standard ROI calculations are great for short-term marketing and advertising initiatives. But measuring and assessing the impact of long-term brand building means using an alternative guide to performance.

John Kearon, CEO of System1Group, recommends measuring a brand’s ‘share of voice’ relative to its ‘share of market.’ He explains

“An established marketing principle dictates that a brand that spends above its size (and achieves excess share of voice – ESOV) can expect its market share to increase in that period. A brand that spends below its size (does not have share of voice sufficient for its size) will decline. Binet and Field indicate that, on average, across all campaigns, 0.5 percentage points of growth are achieved for ten percentage points of ESOV.” 2

For example:

  • BRAND A has a share of market at 10% and share of voice is 20%
  • Excess Share of Voice is 10% ( 20 – 10) = 10
  • The 10% ESOV means it stands to grow by 0.5 percentage points over the period

This also means brands must prioritize resources to measure, test and evaluate effectiveness of brand building campaigns over the long term.

The “New” Convenience

It’s Wednesday around lunchtime and, like many working professionals, I’ve hopped over to the local grocery store in search of a quick meal before my next meeting. Expectedly, the line for the salad bar is four or five people deep, as well as the Asian wok station, the sushi bar and the deli counter.

Yet one spot remains eerily empty, despite a plethora of convenient meal options: the frozen entree aisle. The situation seems almost counter-intuitive; an endless assortment of cuisine types ready to go in under 5 minutes and not a soul around. So why the lack of customer traffic?

A sample of several frozen meals, which are no longer considered “convenient” by the modern consumer.

As the Hartman Group explained at their 2018 Food Culture Forecast a few weeks ago, one of the main factors is that frozen meals are no longer considered “convenient” by the modern consumer.

The “New” Convenience, as CEO Laurie Demeritt states, is much more than the intersection of speed and efficiency.

WHY IT’S HAPPENING

Convenience food is nothing new for the industry. In fact, the ’50s and ’60s began a golden age of convenience-eating with food innovations focused on giving housewives easier ways to put a meal on the table. Frozen, single-serve meals. Canned soups and stews. Jars of pre-made sauces and gravies. Boxed meal solutions.

These product solutions became even more widely used in the late sixties as more women began heading to work and had less time and energy to prepare a home-cooked dinner.

But as the Hartman Group explains, the very qualities that made these products so enticing decades ago are now at odds with today’s consumers’ food values. Reliability has given way to health and wellness concerns. Experience is now prized over efficiency. Uniformity has been replaced with authenticity and predictability is now second-fiddle to distinction.

A graphic comparing cultural values between generations.

Source: “The New Convenience.” A.C.T. Food Culture Forecast 2018. The Hartman Group. April 2018.

WHAT WE THINK

It’s not that convenience is no longer relevant, it’s that many brands haven’t changed how they think about–or talk about–convenience as a product attribute.

Consumers today no longer believe that opting for convenience foods (easy, quick, and accessible) means sacrificing freshness, quality, and health and global influences. Our marketing and innovation however, haven’t fully caught up to modern expectations. To be considered a convenience brand/product we must expand our messaging to include these new consumer expectations.

WHAT’S NEXT

The Hartman Group identifies three distinct attributes consumers are looking for when it comes to modern convenience products.

Easy –> Empowering

Despite the news that consumers don’t want to cook, they actually do see the value of a home-cooked meal for themselves or their families.

  • Old Convenience: making it easy to assemble a meal in as few steps as possible
  • New Convenience: empowering users with a new skill or knowledge to successfully prepare a meal

Despite the news that consumers don’t want to cook, they actually do see the value of a home cooked meal for themselves or their families.

Quick –> Engaging

Time is even more of the essence. But consumers no longer want to sacrifice interesting, customizable fare for speed. Brands should think about, and package, products as components that can be “arranged” in different ways to create personalized meal solutions.

  • Old Convenience: the ability to prep and serve a meal in the least amount of time possible
  • New Convenience: the ability to customize and personalize my meals, no matter how small

Consumers no longer want to sacrifice interesting, customizable fare for speed.

Accessible –> Flexible

Functionality remains critical when it comes to convenience foods, but ensuring products can be sized, scaled, and streamlined to meet unique consumer needs are equally as important.

  • Old Convenience: pre-cut vegetables that can be combined to make a salad
  • New Convenience: a complete salad kit that can be eaten as a side OR added to grilled chicken to make a meal

Ensuring products can be sized, scaled, and streamlined to meet unique consumer needs are as important as functionality.

Start Caring About Sharing

“Do we need to be on Instagram?”

It’s a snowy afternoon in mid-January and I’m sitting with our integrated planning team talking about the most frequently asked questions from clients. From understanding what to expect in audience engagement, platform usage and content demands, the team agreed social media warranted a deeper dive for our foodservice clients.

So last month, we partnered with Datassential for a proprietary research study with over 400 operators across all segments asking about a variety of topics including social media, advertising content and trade shows. For this month’s Thought for Food, we’re giving our readers an in-depth analysis into operators and social media usage, as well as considerations for your 2019 marketing plans.

WHAT’S HAPPENING

Our decision to invest in operator research began while reviewing Datassential’s 2017 Media Engagement study, which showed the most popular types of media used by foodservice operators to get information for their business. The data didn’t just confirm our team’s intuition on operator social media use, it showed adoption of these tools was deeper than conventional wisdom would indicate. That intel provided us a point of focus. 

Datassential’s 2017 Media Engagement study showed the most popular types of media used by foodservice operators to get information for their business.

Source:“Pulse Topical Report: Media Engagement Chapter.” Datassential. December 2017.

Knowing that many of our clients are weighing the investment in social media, we felt it was important to dig deeper and understand:

  • What percentage of operators are actually following foodservice and/or beverage suppliers?
  • Which platforms do they prefer/use most often?

In our follow-up Omnibus study with Datassential, we found that 52% of all foodservice operators follow foodservice and/or beverage suppliers on social media, with Facebook, Instagram and Twitter being the most used platforms.

WHAT WE THINK

Social media must become part of our operator engagement strategies moving forward.

As the foodservice decision-maker demographic shifts to include more Millennials–the most active generation on social media overall–manufacturers will need to be active on these platforms to reach this group. Many B2B industries are already involved in social selling–the use of social media by sales professionals to interact with and sell to prospects, by offering content and answering questions until they are ready to buy–and foodservice is not far behind.

WHATS NEXT

Not all platforms, segments or content types are created equal when it comes to social media. Because engagement requires a long-term resource investment, here are three questions to answer when developing a social strategy:

Who should we target?

Certain segments are more active than others on social media and gravitate towards different platforms. Commercial and C&U operators are most likely to be engaged, while Healthcare and K-12 decision makers are least likely to be active.

Illustration showing how various segments are more active than others on different social media platforms.

Source: “JT Mega Operator Omnibus.” JT Mega and Datassential. February 2018.

What is the most popular platform?

Facebook is the most popular–likely due to its longevity in the marketplace. But that doesn’t mean it should be your go-to platform when investing in a social strategy. Your content plan, marketing objectives, target audience and budget will largely dictate which social platform makes the most sense for your brand.

Facebook is the most popular social channel–likely due to its longevity in the marketplace.

Source: “JT Mega Operator Omnibus.” JT Mega and Datassential. February 2018.

What type of content is most valuable?

Food and consumer trends, new product updates and company news were frequently sought after by all operators, while white papers, contests and success stories scored low across all audiences.  

Food and consumer trends, new product updates and company news were frequently sought after by all operators on various social channels.

Source: “JT Mega Operator Omnibus.” JT Mega and Datassential. February 2018.

Final Thoughts

Investing in a social strategy is a long-term commitment. It requires consistency to build brand awareness and brand loyalty over time. Social can be a very powerful tool for your brand, but it needs resource prioritization.

Look for more social media insights in our upcoming “Marketing to the Modern Foodservice Operator: Social Media ” e-book scheduled for release later this month.

 

Can You Make the Logo…Smaller?

Illustration of the shift in Tyson Foods corporate logoSpeaking at the 2017 Consumer Analyst Group of New York, Tyson Foods President and CEO Tom Hayes talked about a new vision for the company and unveiled a dramatically new corporate logo. A stark departure from the thick white font atop a red and gold seal, the sleek “T” stands out for its simplicity and–dare I say–boringness compared to the sea of food and beverage logos out there.

Such a digression away from the original logo indicates much more than a corporate culture shift. In fact, Tyson has embraced what designers call responsive branding.

WHY IT’S HAPPENING

There is no arguing that when it comes to your brand, consistency and repetition is still incredibly important. But what has changed is how consumers interact with brands. As Matty Bruning, interactive designer at JT Mega explains:

Brands are now living in an increasingly diverse and fluid digital landscape. We need to make sure our brand elements are diverse, flexible and fluid enough to degrade gracefully as visual real estate becomes scarce. - Matty Bruning, Interactive Designer

In short, the spaces our logos occupy are getting smaller and more varied thanks to an increase in technology and social platforms. Before, as the curators of our brand communications, we could be confident in our assumptions about what our brand elements would look like when appearing on printed materials, websites, billboards, etc. In the new digital ecosystem, logos get squeezed to anything from a 40 x 40 social media profile image to a 16 x 16 pixel icon on the tab of a browser window. With the proliferation of sharing on an ever growing number of platforms and devices there is no telling where or how your brand presence will display online.

The result: detailed and/or complex logo designs become unrecognizable when scaled down.

Illustration of a complex logo design that becomes unrecognizable when scaled down

WHAT WE THINK

Both retail and foodservice companies need to proactively begin the responsive logo design process for existing brands and corporate logos.

As mobile, e-commerce and smart technology advances affect how we interact with food and beverage brands, responsive logos are needed to ensure consistent, continued brand recognition among customers. Investing in responsive logos will make it easier to adjust to shrinking screens and heightened UX demands in the future.

WHAT’S NEXT

While logos for all new brands should be approached with this new branding lens, Bruning descrbies how to approach existing logos for responsive-design:

Account for all brand experiences

Consider all the ways your audience will interact with your logo, including digital environments and device usage.

Illustration of considering all the ways an audience will interact with a logo

Design a logo continuum

Responsive logo design means thinking of your logo not just as a graphic, but as a system of modular components that allows you the flexibility to iterate several versions of your logo, each successively distilled until you reach the most basic yet recognizable element. This will ensure consistency across all mediums, technology platforms and devices.

Illustration of a logo as a system of modular components

Just some Thought for Food

What’s Next for Natural?

La Croix sparkling water in the official JT Mega mini fridge

Like many other office kitchens, the official JT Mega mini fridge is slowly being taken over by La Croix sparkling water. Once a refuge for artificially-sweetened soft drinks, the shelves now burst under the weight of “pamplemousse”, “mure pepino”, and “cerise limon.” And like most new beverage items on the market, each can proudly proclaims “100% natural flavors.”

Replacing artificial ingredients with natural ones has shown positive sales results across all food and beverage categories.  So imagine our surprise seeing a report by food and beverage flavor developer, FONA International, proclaiming “The jig is up for manufacturers hoping to win [consumer] confidence with a natural claim.”

While we adamantly reject the notion that “natural” is losing meaning with consumers, it does raise an interesting perspective about how we maximize the effectiveness of “natural” claims moving forward.

WHY IT’S HAPPENING

First, we have to understand why consumers were drawn to “natural” in the first place. In its recent report, The Hidden Drivers Behind Natural & Organic, Technomic states one of the key reasons consumers gravitated towards “natural” was because it provided an efficient mental shortcut:

Today's consumers demand transparency around each step their food takes on the way to their plate...across the spectrum of health, taste, sustainability, social responsibility and more. So how can you give consumers that much information without overwhelming them? By using umbrella terms. Terms such as 'natural' and 'organic' convey many things to consumers by perceptually encompassing a wide variety of other health claims and benefits.

In short, “all natural” became an easy way to convey both higher quality and health attributes.

But without a consistent definition of umbrella terms between the FDA and the USDA, brands began using the same words to describe various farming techniques, animal husbandry practices and ingredient parameters. Which unfortunately led to mass confusion: 82% of consumers said they confuse natural and organic at least some of the time1.

So one can see why FONA International would argue companies should be using more single-attribute claims like “no preservatives,” rather than umbrella terms like “natural”, when marketing to consumers to minimize confusion.

Which begs the question, “which one is right?”

WHAT WE THINK

You need both. Umbrella terms and single-attribute claims serve different purposes for different consumers.

We know umbrella terms provide a very necessary mental shortcut for consumers looking to delineate between conventional and non-conventional food and beverage options. And for many people, seeing a “natural” claim is all they want (or need) to make a purchase decision. For consumers demanding a deeper level of detail, single-attribute claims function as proof-points for the umbrella claim and demonstrate a higher degree of transparency.

WHAT’S NEXT

You can effectively use both umbrella terms and single-attribute claims in marketing communication by building a messaging hierarchy:

Start with the umbrella term 

Umbrella terms (natural, organic*, clean, simple) should be featured most prominently on the package/marketing communication. Its primary purpose is to help a customer more easily distinguish this as a non-conventional product.

Field Trip beef jerky packaging featuring prominent umbrella terms, 'all natural' and 'gluten free'.

 

Follow up with additional single-attribute claims 

Next, highlight single-attribute claims that are particularly important to your category and/or target audience.

Field Trip beef jerky packaging featuring supporting single-attribute claims

Finish with umbrella term clarification

Lastly, provide additional clarity as to what production and/or ingredient practices back up the product’s classification as the umbrella term.

Field Trip beef jerky packaging featuring the clarification of the displayed umbrella terms.

*Note: while the FDA and USDA have strict guidelines on how organic is labeled, many consumers are either unaware or confused as to what it means. As such, we classify it as an “umbrella” term in this post. 

1 “Natural: 2018 Trends and Insights.” FONA International. 2018.

 

The Reality of Virtual Trade Shows

March marks the beginning of a much anticipated–and somewhat derided–season in the food sales industry: trade shows. This month, we’re busy finalizing booth graphics, email blasts, customer events and lead capture plans for many of our clients. Despite the nuances of each channel, there is one universal objective: maximize valuable face-time with current and potential customers.   

Which is why a February 2 headline in the IFDA daily e-newsletter caught my attention: “Jake’s Finer Foods Has Partnered with vFairs to Deliver an Interactive, Virtual Food Show.”

Many of you will remember virtual trade shows as a tech trend that began back in the 90’s that never gained real traction. But recent advancements in tech, mobile and other devices made me wonder if virtual shows were worthy of a second look. I called in our digital mavens, Sandri Dekker and John Schneider, for their expert opinions.

WHY IT’S HAPPENING

Through conversations with media partners and many of you, we know that the travel and resources required to attend trade shows are increasing. For some customers, it has meant additional scrutiny about the ROI of attending. Which makes a virtual/digital trade show, in theory, attractive to many in the industry.

We contacted the team at VFairs to give us a behind-the-scenes look at Jake’s Finer Foods showcase and understand what’s happening in the virtual trade show space:

Much like an in-real-life (IRL) event, the show floor allows attendees to navigate a series of manufacturer booths.

Much like an in-real-life (IRL) event, the show floor allows attendees to navigate a series of manufacturer booths.

Courtesy of VFairs https://www.vfairs.com/

Once inside the booth, customers can click on various tabs to learn more about products, download marketing materials, or even live-chat with a sales representative.

Once inside the booth, customers can click on various tabs to learn more about products, download marketing materials, or even live-chat with a sales representative.

Courtesy of VFairs https://www.vfairs.com/

WHAT WE THINK

The current virtual trade show platforms fail to create an authentic supplier-customer interaction. Tech vendors are focusing too much on replicating a trade show floor, rather than optimizing the content with current technologies.

Trade shows are intended to bring our brands, products and company to life with customers in exciting ways. While the technology potential for virtual trade shows is enormous–video, live chat, interactive digital engagement and virtual reality–we’re still waiting to see a company successfully execute a virtual solution.

WHAT’S NEXT

As an agency, we understand that virtualized sales events will become more prominent across the food-business landscape as resources are tightened and time becomes an even more valuable commodity. We also know that these events–regardless of technology savviness–are important to attend. Here are our top 3 ways to maximize your participation in an upcoming virtual event:

Be Strategic with Graphics

In a virtual environment, graphic space is small and limited. Opt for close-in product photography, your company logo, and short but informative copy. 

In a virtual environment, graphic space is small and limited. Opt for close-in product photography, your company logo, and short but informative copy.

Talk Like a Human

We naturally type/write more formally than we talk. In a live-chat environment with customers, keep it conversational and don’t be afraid to inject some personality.

In a live-chat environment with customers, keep it conversational and don’t be afraid to inject some personality.

Bring Content to Life

Your content strategy will be largely dictated by the technology offered within trade show hosting platform. Talk with the vendor to see if options like video are available to bring the content to life. 

Just some Thought for Food

 

New Year. New Options.

This week, millions of Americans renewed their gym memberships and promised 2018 will be the year they start eating healthier. Yet a committed subset of this group took their resolutions to the next level by enlisting the scientists at Habit to create personalized wellness and nutrition plans. 

A high-profile disruptor in the food-tech sector with the backing of Campbell’s Soup Co., Habit uses biological samples to identify genetic variants and biomarkers within a customer’s DNA to create a personalized nutrition profile and, in some areas, even deliver personalized meals based on their biological profile.

Example of a Habit personalized nutrition profile

The process isn’t for the faint of heart, as author and contributing writer at the Washington Post, Sophie Egan, found out the hard way. The $299 (plus shipping and handling) investment requires a DNA cheek swab, core measurements and the ingestion of a proprietary Habit Challenge™ Shake. But perhaps Egan’s most astute observation came toward the conclusion of her essay when she wrote:

“On the face of it, personalized nutrition makes sense. Many people feel that the existing national dietary guidance of one-size-fits-all has failed them.”

Unlike other diet/nutrition companies that promote the ability of users to customize their programs, Habit is unique in its promotion of nutrition personalization. And the latter is quickly becoming the new consumer expectation.

WHY IT’S HAPPENING

Personalization is the direct result of the consumer shift from Affluence to Influence. As Generation Z witnesses the true death of a majority at a conceptual level, mass fragmentation will make the idea of ‘majority’ irrelevant for both brands and marketers. As A.T. Kearney explains:

“Affluence Model consumers bought the fiction that ‘one size fits all.’ Alternatively, Influence Model shoppers believe ‘one size fits nobody–except possibly by accident.’ Societal fragmentation will be celebrated as personalization in the Influence Model.”

WHAT WE THINK

The desired result of personalization vs. customization is identical: a better customer experience. But the paths to get there are dramatically different.

  • Customization: Brands provide a single set of choices that consumers can adjust based on their preferences
  • Personalization: Brands curate choices already tailored to a consumer’s preferences based on previous behaviors/interactions

WHAT’S NEXT

To achieve true customer personalization, brands and marketers must leverage the power of customer data. Below are a few ways personalization will likely come to life in food and beverage marketing:

Loyalty Programs Get Personal

In a November 2017 consumer study, Restaurant Hospitality found that 59% of consumers said they would be more likely to participate in a loyalty program if rewards were customized to their prior purchases. For example, instead of offering a generic “Free Drink” reward, Starbucks could utilize consumer transaction data to instead offer this customer her most frequently ordered beverage: a grande salted caramel mocha with extra whip. 

Loyalty Program Email Evolution Sample

Consumer-Designed Food

Back in 2014, Barilla introduced the world to their 3D pasta printer, which could print unique shapes in under two minutes. Contests are held each year to come up with new designs and, as Saveur Magazine explains, the 3D software can sculpt forms that could never be made by hand or machine. As technology becomes more accessible, consumers could theoretically craft and print their designs for a truly personalized pasta experience at home.

Menu Recommendations

UFood Grill recently installed new ordering kiosks with facial recognition software at their Owings Mills, MD, location. Customers who opt-in for having their face scanned sync it with a credit card and the system begins tracking their orders. On the next visit, a quick scan by the kiosk can bring up past orders for quick ordering. Proponents of the technology say facial recognition, paired with data algorithms, will soon be able to serve up personalized food and beverage recommendations.

UFood Facial Recognition Kiosk

 

Is Automation the Answer?

“This has to be a render,” wrote Jesus Diaz, author and contributor at Co.Design, in his November 2017 article on grocery e-commerce. But what looks like a 3D depiction is actually 100% real robots zooming across a highly sophisticated product grid filling online grocery orders for real customers.

The British-based company, Ocado, is the world’s largest automated warehouse for grocery fulfillment. At its Andover warehouse, a swarm of 1,000 robots navigate a grid the size of a football field to fill orders and replace stock. The new system, which went live in mid-2017, can fulfill a 50-item order in under five minutes–well under the two hours it takes at a human-only operating facility.

Those of us in the industry know that grocery e-commerce will be an integral part of the food future, but is robot automation the answer?

WHY IT’S HAPPENING

Unemployment rates and minimum wage growth suggest automated fulfillment will become a necessity in the near future. As Chris Rupkey, chief economist at MUFG in New York, lamented to Reuters in August 2017, “Companies are running out of workers to hire to do the job or even train to do the work” that needs to be done1. The ratio of job openings to unemployment also hit a 16-year high in August, signaling the widening gap between job openings and available candidate skills mismatch.

Retailers are also increasingly paying more for even low-skilled positions, like those filling and delivering online grocery orders. In 2017, only 20 states match the federal minimum wage of $7.25 and nine of those introduced legislation in the last twelve months to increase their state wage2.

If both trends continue, retailers will soon be out of staff and out of dollars to continue their current service model.

WHAT WE THINK

Even the likely adoption of automated grocery ordering will still not replace the necessity of in-person shopping trips.

In their 2017 “Groceries 2.0” report, Field Agent found that 62% of U.S. consumers said they wanted alternatives to traditional, in-store grocery shopping. While consumers like the idea of forgoing the frequent trips to a grocery store, over 60% said they don’t shop online because they’d lose the ability to personally inspect sensitive items like produce.

Technology is incredibly efficient, but we’re a long way from algorithms successfully replicating the human nuances of grocery selection.

WHAT’S NEXT

Knowing that both online and in-person grocery will be part of our customer’s future, we as food marketers should adjust our e-commerce strategies based on where our brands/products reside in brick-and-mortar stores. As The Nielsen Company found in its 2017 research, traditional center-store items are migrating online, while perimeter and fresh goods remain in-store purchases3.

Graph showing which center store shopping categories are moving online

Center-Store Brands/Products

  • The Challenge:  Online shoppers are less brand-focused compared to when they shop in-store, meaning they’re more likely to switch to another national brand or store brand during e-commerce shopping trips.
  • The Opportunity: Consumers who frequently shop online are more willing to try new products in many shelf-stable categories than in-store shopping consumers. Online shoppers are also more likely to make online impulse purchases in center-store categories than their in-store counterparts. These insights should be leveraged, particularly with new-product launches.

Fresh Perimeter

  • The Challenge: With online shopping available, basket size at in-person visits continues to decline.
  • The Opportunity: Shoppers are craving more surprise and innovation at in-person retailer visits. Brands and retailers must work together to build basket rings by providing more excitement, and more day-to-day enjoyment of food than what’s being offered today. Case in point: Sainsbury’s “Try Something New Today” campaign transformed their business by persuading customers to add just one more item to their basket.

Just some Thought for Food

1 “U.S. Job Openings at Record High; Labor Market Tightening.” Reuters. 8 August 2017.
2 “2017 Minimum Wage By State.” Bankrate. 2017.
3 “What’s Next in E-Commerce?” The Nielsen Company. 2017.

Questions, comments or want to learn more? Let's connect! weshouldtalk@jtmega.com

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