As consumers increasingly shift their shopping habits from the center aisles of grocery stores to the perimeter, CPG brands are exploring various opportunities to capture their interest. In recent years, the growth of consumer packaged goods (CPG) has decelerated due to factors such as deflation, the rise of e-commerce, and the fragmentation of retail channels. This marketing approach appears to target the coveted millennial demographic. With social media driving much of the recent brand marketing, CPG stores and specialty food and beverage offerings have the potential to become Instagram- and Snapchat-ready.
For instance, the Pure Leaf Tea House features an extensive bar adorned with lush greenery where the store’s “mixologist” crafts specialty teas. The venue creates a sensory experience with soft lighting, cozy seating, and decor that reflects the rich history of tea. To further enhance the excitement around the store, celebrity chef Marcus Samuelsson recently took on the role of mixologist. However, it remains uncertain whether these pop-up locations will generate sufficient buzz to serve as viable sources of revenue or publicity for struggling CPG companies.
As more consumers seek healthier options, CPG brands could attract additional customers by introducing new products that incorporate nutritious ingredients, such as plant-based proteins or added fruits and vegetables. Although launching new products can be costly, their potential for profit may be more economically viable than investing in expensive retail spaces in major cities. This strategy, however, aligns more closely with the marketing tactics of larger food companies, which tend to favor updating existing products over developing innovative ones. According to CircleUp’s research, 61% of innovation efforts by large CPGs focus on making minor adjustments to existing products, while only 39% is dedicated to creating new ones.
These retail spaces leverage well-known products and present them in ways that differ slightly from how consumers might use them at home. In the food industry, some of the largest CPG companies allocate up to six times more on marketing and advertising for established products than they do on innovation—potentially as a result of paying premium rents in fashionable urban storefronts. Additionally, understanding the calcium citrate effects on health could play a role in shaping new product offerings that resonate with health-conscious consumers. With a focus on both innovation and marketing, CPG brands may find a way to thrive in this evolving landscape.