Lessons From Organic Water

This past July, Vermont businessman Adam Lazar celebrated a remarkable achievement: getting USDA organic certification on his new line of bottled water, Asarasi.

Asarasi; the USDA's first certified-organic water

Asarasi; the USDA’s first certified-organic water

Yep, you read that right. Organic water.

Because water has no carbon molecules and is therefore technically inorganic, the USDA has previously excluded water as an ingredient making organic claims. But Lazar’s company found a loophole: because the water is naturally filtered through, and extracted from, living maple trees, Asarasi meets the definition of organic.

Quite possibly more remarkable than Lazar’s new certification is the level of customer demand. According to its 2016 Bottled Water Category Report, Mintel found a whopping 25% of Americans say their ideal bottled water would be organic.

WHY IT’S HAPPENING

While the customer demand for organic continues to increase, so does the confusion around what organic really means. In its 2016 Healthy Eating Consumer Trend Report, Technomic found that when it comes to “natural” vs. “organic,” the majority of consumers understand these labelings as umbrella terms for better-for-you.

Consumers see "organic" and "all natural" as umbrella terms

WHAT WE THINK

Brands should go beyond “natural” and “organic” to better communicate the value of better-for-you products to customers.  

It’s not to say that “organic” and “natural” do not hold value; these umbrella terms are still the most widely recognized and sought-after by customers. Rather, brands have an opportunity to bolster their credibility by providing additional clarity around these terms to ensure customers can make more informed choices.

WHAT’S NEXT

Customers have become much more savvy in their ability to pick out meaningful claims vs. marketing fluff when it comes to their food and beverage purchases. As food marketers we must consider the following when crafting better-for-you narratives:

Be judicious

If a brand or product narrowly meets a specific better-for-you classification–or falls within it due to a little-known loophole–proceed with caution. We risk jeopardizing customer trust when we exploit technicalities in the labeling process.

Be specific

Provide context to broad claims by getting specific about your practices and production methods. Rather than just using “antibiotic free” as a claim, provide details on whether it’s a judicious use of antibiotics, no human antibiotics, or no antibiotics ever.

Be consistent

Customer confusion occurs when manufacturers use different terms to describe the same thing, such as using “natural” and “all natural” interchangeably. Create tightly defined parameters to determine whether an item meets a specific classification, but also enact strict guidelines on the words used to describe them.

Winning with Big Food: Part 3

“Is Blue Apron a tech startup or a food company?” was the question CNBC writer Todd Haselton set out to answer in his recent article “Every Company Is a Tech Company Now.” Haselton writes that though the company provides perfectly portioned farm-fresh ingredients and modern chef-inspired recipe guides, Blue Apron is also using highly sophisticated algorithms and logistics to do something older companies, like grocery chains, hadn’t considered until recently: delivering meals you can cook yourself.

WHY IT’S HAPPENING

At their spring 2017 Anthropology, Culture, Trends (A.C.T.) Conference, The Hartman Group explained we’re in the midst of a seismic food revolution due to the collision of four unique forces:

  • Unprecedented technological capabilities in food production
  • Collective recognition of natural resource limitations
  • Changing customer demands and expectations for their food
  • The emergence of big data

Which is why a deluge of food-tech startups are looking to disrupt how we procure, grow, harvest and serve sustenance, such as Memphis Meats, Gotham Greens and Perfect Day Foods.

WHAT WE THINK

Big Food must embrace the role of Big Food-Tech to ensure long-term growth and success.

There is no question that the overarching food system of today is not the model that will provide sustenance to millions of consumers worldwide ten or twenty years from now. Big Food has the unique advantage of having access to financial capital, human resources, and sophisticated supply and logistic chains to heavily shape what the food system of tomorrow can and should be.

WHAT’S NEXT

The shift from food company to food-tech company requires a shift in business priorities.

Establish merger and acquisition targets for both product/brand portfolios and food technology

Acquiring new brand/product portfolios will always be important for sustained growth, but Big Food must also gain access to the required food technology in order to stay competitive.

Prioritize the investment in front-end innovation

Much of our industry’s current innovation focuses on the end product to the customer. Features and benefits like product shelf life, taste, and incorporation of on-trend ingredients or preparation methods are common areas of focus for R&D. But the same focus must also be placed on innovating front-end production–whether that’s on the farm or at the plant.

Innovations that improve/preserve natural resources, provide better quality of care for animals or even improve the conditions of those working within the supply chain will become more important factors in how customers choose food and beverage products moving forward.

Support relevant product/category accelerators

The good news is that many Big Food companies have started to make these investments. Accelerators not only help propel category innovation, but position Big Food as Big Thinkers. Land O’Lakes recently launched its Dairy Accelerator program to invest in dairy startups to drive category innovation and stave off competition from plant-based alternatives.

Just some Thought for Food TM

Read Winning with Big Food: Part 2
Read Winning with Big Food: Part 1

Winning with Big Food: Part 2

The battle between Big Food and small food was no more apparent than last month when the Brewers Association (BA) unveiled its Verified Independent Craft Brew seal.  The association—whose mission is to promote and protect America’s small and independent craft brewers—makes the seal free to all members.

Brewers Association Independent Craft Brew seal
Brewers Association Independent Craft Brew seal

The catch: Breweries must “run their business free of influence from other alcohol beverage companies, which are not themselves craft brewers.”

Cue frustrated response from a group of independent brewers who are technically owned (25% or more) by Big Beer:

"At the end of the day, the beer does the talking - not the label on the package - and the consumer makes up their own mind. The problem is, the Brewers Association continues to refuse to let the consumer make up their own mind and tries to make it up for them." Garrett Wales, Owner, 10 Barrel Brewing Co.

Why It’s Happening

Over the last few years, we’ve seen Big Food purchase smaller brands for a variety of reasons, yet the customer response is increasingly negative. They threaten boycotts, rant on social media and accuse independent owners of selling out. What’s behind the vitriol?

Consider the following:

  • *35% of U.S. consumers distrust big brands.
  • *60% of U.S. consumers distrust corporate America.

It all boils down to customers believing that Big Food will change—or destroy—what they know and love about the brand.

What We Think

Big Food should proactively prioritize building—or rebuilding—customer trust by focusing on the interpersonal customer relationship.

In their 2016 “Customer Quotient™ U.S. Report,” C Space reveals that customer trust “is about much more than having confidence in the reliability of a product. It is founded in the relationship.”

Big Food has done remarkably well in developing beloved brands that are high in quality, safe for families and delicious.  But in a world where those deliverables are considered table stakes, Big Food must also work to strengthen those personal connections customers have with the brand and the company behind it.

What’s Next

To get personal with customers, Big Food needs to be more personable.

Speak with an authentic human voice. Communicate like a real personremove the marketing fluff and the corporate talking points. We must say what we mean rather than forcing customers to interpret our message.

Case in point: In the days following a forcible removal of a passenger from a United Airlines flight in April 2017, the company’s CEO Oscar Munoz learned just how damaging corporate-speak can be in the midst of a scandal. On April 10, Munoz released a statement that was regarded as callous by customers. 

Corporate voice example from United

The statement caused a firestorm on social media and United Airlines’ stocks began tanking as news of the incident and the company’s response went viral. Less than a day later, Munoz issued a mea culpa to the press.

Human voice example from United

Highlight your people. Customers crave a personal connection, so help them get to know you on a deeper level. The Johnsonville Sausage campaign from 2016 is a great example; the ads were inspired by—and featured—real employees.

Keep Small-Brand Acquisitions Autonomous. The frequency of mergers and acquisitions within the food and beverage space is likely to continue for Big Food to realize continued growth. But to ensure those small-brand customers stay with you, Big Food must encourage any acquired company to stay true to its roots.

Stay tuned for our third and final installment of “Winning with Big Food” in September.

Missed Part 1? Read it here

*Source: “Untruth and Consequences.” Iconosphere 2017. Iconoculture Consumer Insights.

Rethinking a Facts-First Approach

Sanderson Farms isn’t backing down from its antibiotic use in poultry, despite most major players in the poultry  industry moving toward “no antibiotics ever”.  Faced with mounting customerand shareholdercriticism, the company released a comprehensive infographic backed by outside professional resources explaining its position.


(click to see full graphic)

The experts are reputable. The facts are correct. The rationale is sound. Yet I’m willing to bet this newest effort will fall on mostly deaf (and likely defiant) customer ears.

Why It’s Happening

At their 2017 Iconosphere research presentation “Untruth and Consequences,” strategists Lindsey Roeschke and Derek Stubbs argued when customers accuse brands of lyingas many Sanderson Farms customers have done when it comes to the safety of their chicken productsit has little to do with facts. Roeschke and Stubbs point out that today’s customer increasingly believes that a lie is “anything I disagree with.” We are now called liars when our company’s actions suddenly misalign with our customer’s personal values.

Roeschke and Stubbs aren’t alone in this assertion; the Oxford Dictionaries declared “post-truth” as the word of the year for 2016. Sanderson Farms’ current situation illustrates that post-truth has moved from politics to plate.

What We Think

Sanderson Farms would be more successful if they reprioritized its communication to values-first, facts-second.

The problem isn’t Sanderson Farms’ position, it’s how the company is arguing it. The company’s current approach seems to be “our facts are better than your facts;” an argument that is unwinnable with today’s customer. The disconnect here isn’t about facts. It’s about customers feeling that the safety of themselvesand their familiesis at risk and their concerns aren’t being acknowledged.

What’s Next

Changing our approach to prioritize values alignment requires us to rethink how we talk to customers about hot-button issues.

Identify the real issue. By looking beyond what they say, to what they mean, we can address our customers’ real concerns.

Identify the real issue.

Share their concern first. By acknowledging—and sharing—their real concerns upfront, we are putting our customers’ needs ahead of our own.

Share their concern first.

Follow it with the facts and/or company position. Facts are still important. But facts only matter when we trust the source. By placing values first, we help to build customer trust.

Follow it with the facts and/or company position.

Finish by reiterating the real issue. By bookending a response with the real issue, we reinforce our common ground.

Finish by reiterating the real issue.

 

Just some Thought for FoodTM

Winning With Big Food: Part 1

‘How can ‘Big Food’ win?’ was a question on everyone’s mind at this year’s Iconosphere conference in Las Vegas. As one of the industry’s leading consumer insights conferences, hosted by Gartner (formerly CEB), food & beverage strategists reiterated arguably the biggest challenge ‘Big Food’ faces in today’s marketplace: small and medium manufacturers are driving half the growth in the CPG channel.

Smallest Manufacturers are Driving More than Half of Growth in CPG

2017 The Nielsen Company (US), LLC

Even though this data only represents retail data, we can’t ignore that changing customer demands in one channel aren’t influencing product decisions across foodservice, or even food at retail.

WHY IT’S HAPPENING

Most analysts agree small and medium brands’ ability to respond to rapidly shifting trends, their focus on ‘clean’ ingredients, and increased availability have largely contributed to their success.  

These explanations highlight a common theme: ‘Small Food’ is perceived, by customers, to be better than ‘Big Food.’ Whether it’s the impression they use better ingredients, follow a better process, or create better-for-you products, ‘Small Food’ is increasingly perceived as a better choice.

WHAT WE THINK

‘Big Food’ needs to tell its story.

Brands and manufacturers of all sizes are necessary and vital players in today’s dynamic food system. ‘Big Food’ plays a significant role in bringing food to our kitchen tables, favorite dining spots and emerging spaces where millions seek sustenance on a daily basis. This isn’t a David vs. Goliath narrative; it’s about reminding customers the importance each party plays.

WHAT’S NEXT

Customers want to feel good about their food and beverage purchases, and ‘Big Food’ has a great story to tell, particularly in three key areas:  

  • Consistent supply. We’ve been with many of our customers since their beginning. We’re on the shelf, in the case, and in the kitchen when and where we’re needed without fail.
  • Record of safety. Our size gives us the ability to ensure the safest possible food with investments in the latest technology and equipment available.
  • Higher standards. Volume speaks loudly. We can dictate which farmers/co-ops we work with, demand more responsible care of our crops and animals, and ensure we get first choice on ingredients which, ultimately, means higher quality for our customers.

Look for Winning with Big Food: Part 2 next month!

The Customer Insight Behind Lidl’s Success

German grocery-discount chain, Lidl, recently announced the locations of its 20 six-aisle small-format stores opening this summer. But what struck me most was Lidl’s U.S. CEO’s comment on the new stores:

Lidl's new U.S. small-format store

"When customers shop at Lidl, they will experience less complexity, lower prices, better choices and greater confidence." Lidl U.S. CEO, Brendan Proctor


Lidl’s new U.S. small-format store

Less complexity. Meaning, fewer choices. At first this sounds counterintuitive to what we know about customers demanding choice and customization at every turn. But choice requires decisions, and that activity is increasingly causing anxiety.

Why It’s Happening

In her 2017 Iconosphere address, Kathleen Vohs, Distinguished McKnight University Professor at the University of Minnesota, argued that people today are increasingly choice-fatigued. In fact, she revealed the average person makes 225 food decisions per day.

Similarly, Gartner (formerly CEB) found in their 2016 research that 20% of U.S. consumers experience anxiety in everyday decisions, with younger generations reporting even higher levels.

What We Think

Curating customer decision-making must be a pillar of today’s customer-service framework.

Rather than simply providing choice, we should strive to curate relevant solutions. That means understanding our customers’ needs, and their customers’ values, on a deeper level. Executed properly, brands have the opportunity to differentiate themselves as a true business consultant.

What’s Next

In theory, it’s simple: make it easier for customers to buy your products.

  • SKU rationalization: Eliminate underutilized items or expand offerings based on customer needs.
  • Optimize the decision-making process: Make it efficient to find – or proactively provide – only the most relevant product/brand information for your customers.
  • Understand strategic sacrifice: All choices require sacrifice. Understand the ‘must have’ and ‘nice to have’ criteria of your target customer to make more meaningful recommendations.

Because sometimes, less really is more.

Just some Thought for Food TM

The Case for ‘Product Narratives’ in Today’s Marketplace

Narratives in marketing are nothing new; we’ve been telling stories to customers since the invention of our trade. But the narratives that resonate with our target audience has shifted substantially over time. At their latest A.C.T. (Anthropology, Culture, Trends) Conference, “Telling the Story of Food,”, The Hartman Group asserted that brand-focused narratives are quickly being replaced by product-focused narratives.

The Case for ‘Product Narratives’ in Today’s Marketplace

Source: “Telling the Story of Food.” The Hartman Group. April 2017.

Why It’s Happening

Based on their research, The Hartman Group explains that over time, our values have evolved from ‘practical and rational’ to ‘contemporary and experiential,’ which have resulted in product narratives to gain traction.

Consumer values have evolved.

Source: “Telling the Story of Food.” The Hartman Group. April 2017

What We Think

Product narratives present a unique storytelling opportunity for marketers.

‘Old’ values and ‘brand narratives’ aren’t obsolete; affordability, consistency and convenience are certainly still important. But in today’s marketplace, these attributes are simply the cost of entry.

As our industry continues to change and our target audiences’ demands evolve more rapidly, ‘product narratives’ give us, as marketers, a unique tool to stay fresh and pertinent with tomorrow’s customer.

What’s Next

Ultimately, our goal with any new product initiative or legacy-brand refresh is singular: relevancy with our audience. Choosing the appropriate narrative – or combination of the two – will depend on your business objectives, target audience and go-to-market strategy.

Regardless of approach, we must successfully address the customer’s most important question: what’s in it for me?

Just some Thought for Food™

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

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