COLORADO SPRINGS, COLO. — “Just showing up as a brand isn’t enough anymore,” said Steve Bratspies, chief merchandising officer for Walmart U.S., Bentonville, Ark. Mr. Bratspies made his comment Aug. 17 during a session at the Grocery Manufacturers Association’s annual Leadership Forum, held Aug. 16-18 in Colorado Springs.
Joy Peters, North America Lead for Accenture’s Consumer Goods Strategy Practice, New York, said leading brands have retained market share over the last four years, but there has been a squeezing of the middle — and some 36,000 brands occupy that middle and are struggling to remain relevant.
Mr. Peters said to maintain or ascend to brand leadership positions in categories companies must maintain an “evergreen portfolio” of products that work in lockstep with evolving consumer needs. While taste, price and health are at the top of the list, wellness, environmental sustainability and consumer engagement are also product attributes consumer seek.
“Brand owners will need to make hard choices on their portfolio and experiment wisely,” Mr. Peters said.
Mr. Bratspies said that having a No. 1 or No. 2 position in a category means a brand is better positioned, but that is not enough.
“We have too many brands who think having that position alone is enough,” he said. “There are an awful lot of brands out there going to market the old way.
“The one challenge I would throw out is the ability to make tougher early decisions on breadth of assortment. We are talking a lot at Walmart about efficiency; efficiency on the shelf. The idea of making choices earlier and involving us earlier on making bigger bets with more powerful s.k.u.s (stock-keeping units).”
James L. Dinkins, president of Coca-Cola North America, Atlanta, said a “digitally native brand manager” is a must today. He emphasized the importance of finding the right people to manage brands and then giving them the right tools to manage the business.
“First, you have to have a portfolio strategy,” Mr. Dinkins said. “Where do we want to play, where is the growth coming from? We have a new mantra called ‘kill the zombies.’ There are some brands that don’t earn their place in the company. Then, when you think about innovation, you’ve got to bring innovation that grows the category.”
Mr. Bratspies said Walmart is building technologies internally to help the retailer better manage assortment.
“We are being tougher than we have in the past,” he said. “I’m talking about physical retail – How much assortment do you need?
“It varies by category. Categories are fundamentally different and there is no easy answer. Some categories need a long tail, because it’s a basket driver. Other categories, you can take a couple of brands to drive the category.”
The session panelists emphasized the importance of innovation in maintaining brand relevance.
“Innovation is about new products,” said Jeff Harmening, chairman of the board and chief executive officer of General Mills, Inc., Minneapolis. “It’s about how you reach consumers and how you go to market.”
Robert Cantwell, president and c.e.o. of B&G Foods, Inc., Parsippany, N.J., used the company's acquisition of the Green Giant brand as an example of how innovation may reinvigorate a category.
“We bought the brand with the model of putting a lot of money against it,” he said. “We heard loud and clear from retailers ‘what are you going to do to sell something different?’
“We decided to take vegetables and not create something new but put it in cuts and formats consumers are familiar with. We showed them to retailers, they said, ‘bring them on,’ and now they are going ‘what’s next?’”