As more consumers shift their shopping habits from the central aisles of grocery stores to the perimeter, Consumer Packaged Goods (CPG) brands are seizing various opportunities to capture consumer interest. In recent years, the growth of CPG has decelerated due to factors such as deflation, the surge of e-commerce, and the fragmentation of retail channels. This marketing approach appears to be a tactic designed to engage the coveted millennial demographic. With much of recent brand promotion driven by social media, CPG stores, along with specialty foods and beverages, have the potential to create Instagram and Snapchat-friendly content.
The Pure Leaf Tea House boasts a long bar adorned with lush greenery, where the store’s “mixologist” crafts specialty teas. This venue offers a sensory experience with soft lighting, cozy seating, and decor that reflects the rich history of tea. To enhance the excitement around the store, celebrity chef Marcus Samuelsson acted as the mixologist earlier this week. It remains uncertain whether these pop-up stores will generate sufficient buzz to become viable sources of revenue or publicity for struggling CPG firms.
As customers increasingly seek healthy options, CPG companies could attract more consumers by introducing new products featuring nutritious ingredients, such as plant-based proteins or added fruits and vegetables. Although launching new products can be costly, their profit potential might outweigh the expenses associated with maintaining high-rent retail spaces in major cities. However, this strategy aligns more closely with the marketing tactics of larger food companies. These companies often prefer to refresh existing products rather than innovate.
Research from CircleUp indicates that 61% of innovation among large CPGs is directed towards small modifications of existing products, while only 39% focuses on creating new offerings. These retail spaces leverage recognizable products, showcasing them in ways that differ from typical home use. In the food sector, some of the largest CPGs allocate up to six times more budget to marketing and advertising established products compared to innovation—potentially to cover the costs of renting trendy storefronts in bustling urban areas.
Interestingly, as consumers consider their health, questions arise about dietary choices, such as which is better for osteoporosis: calcium citrate or carbonate? This focus on health could drive CPG companies to further innovate and promote products that cater to the nutritional needs of their customers, including those with specific health concerns. By addressing such inquiries and preferences, CPG brands can better position themselves in a competitive market.