BATTLE CREEK, MICH. — Four former Whole Foods Market executives discussed the evolution of the food and beverage industry during a Feb. 15 webinar presented by Brandjectory, an online platform dedicated to connecting early-stage consumer packaged goods entrepreneurs to investors.
The wide-ranging conversation touched on a variety of topics, from shifting consumer behaviors to product trends to strategic insights for brand founders. Here are four key takeaways:
Taste remains king. The industry must constantly adapt to evolving consumer needs; however, “the reality is consumers buy food products and beverages because they taste good,” said Michael Schall, founder and managing director of Schall Consulting and consultant with FocalPoint, a division of B. Riley Financial, Inc.
While various eating patterns have emerged in recent years, influencing product development as companies strive to retain relevance among shoppers, “taste is what will drive sales,” said Mitchell Madoff, senior vice president of private label and supply chain at Foxtrot. To that end, he said, product sampling is one of the most effective marketing approaches for new brands, noting, “You can do a lot with social media, but you’ve got to figure out a way to get it into someone’s mouth.”
Sustainability should be a priority. Younger consumers expect companies to adopt sustainable business practices that support people and the planet, and “if you’re not working on that, if it’s not top of mind, you’re definitely behind the eight ball,” said Errol Schweizer, founder and owner of Errol Schweizer LLC.
“You don’t want to get caught with your pants down,” he said. “That’s what I would always say to brands when they would complain about fair labor or fair trade certification being an additional expense… You could either do the work up front and ensure you don’t have those practices in your supply chain or you could be the recipient of really bad PR.”
He noted the most transformative trend he has observed during his career is the “unprecedented growth of the USDA Organic seal,” which represents a more than $60 billion market segment and is seen as “the gold standard for sustainability,” he said.
“It’s not perfect … but it really has created a mass public conscience around sustainable agriculture, how food is grown, what’s in food but also what’s not in food as well as links to health and wellness and nutrient density and fair prices to farmers,” Mr. Schweizer said. “It’s cool to see that something that was once a pipe dream is now mainstream.”
Stay focused. Brand owners may be tempted to chase the latest fad or “try to be all things to all people,” said Bobby Turner, senior consultant at Simpactful, who cautioned against going “way too wide before going deep.”
“Everybody tends to think in terms of what your point of difference is,” Mr. Schall said. “In addition to point of difference, what’s your point of preference? Why do people prefer to choose your brand? … Some people don’t really know what they want until they feel it and see it in a brand.”
Mr. Madoff added, “Stay true to yourself and what you’re trying to achieve… Really think about how your product is different than what’s on shelf today.”
Entrepreneurs should not only be tactical in product development but also in sales and marketing.
“What I would strongly suggest is … focus on a retailer, focus on a specific market, know who your consumer is and seek out perhaps a local form of distribution,” Mr. Schall said.
But … there is no one-size-fits-all channel strategy. The retail landscape has evolved at a dizzying pace, with more opportunities than ever for consumers to discover and purchase food and beverage products. Operators must assess which settings and geographies best align with a brand and products.
“There is no real playbook; there is no roadmap,” Mr. Schweizer said. “You have to figure it out based on where your customers are, who’s buying your products and where you want to be.”
Mr. Turner added, “All brands need to be omnichannel in some form or fashion.”
“Don’t think you have to swing for the fences to start, but you need to do what’s right for your business and where you are in your own evolution as a business to determine what distribution model works for you,” Mr. Madoff said.A replay of the event may be viewed here.