As consumers increasingly shift from the center aisles to the periphery of grocery stores, CPG brands are seizing various opportunities to capture consumer attention. In recent years, the growth of CPG has decelerated due to factors such as deflation, the rise of e-commerce, and the fragmentation of retail channels. This marketing approach seems to be a strategy aimed at appealing to the desirable millennial demographic. Much of the recent marketing by brands has been fueled by social media, allowing CPG products, especially specialty foods and drinks, to become captivating content for platforms like Instagram and Snapchat.
For example, the Pure Leaf Tea House boasts a spacious bar adorned with lush greenery, where the store’s “mixologist” specializes in crafting unique tea blends. This venue offers a sensory experience through its soft lighting, cozy seating, and decor that reflects the rich history of tea. Adding to the excitement, celebrity chef Marcus Samuelsson recently took on the role of mixologist, generating further buzz around the store.
It remains uncertain whether these pop-up stores can create enough hype to serve as viable sources of revenue or publicity for struggling CPG brands. As more customers seek healthier options, CPG companies could attract a broader audience by introducing new products featuring nutritious ingredients, such as plant-based proteins or added fruits and vegetables. While launching new products can be costly, this approach may prove more financially viable than investing in expensive retail spaces in major cities.
However, this strategy aligns more with the marketing tactics of larger food companies. These companies typically prefer to enhance existing products rather than innovate entirely new ones. Research from CircleUp indicates that 61% of the innovation from large CPG firms focuses on minor adjustments to existing products, while only 39% is dedicated to developing new offerings. Retail locations are capitalizing on well-known products and presenting them in ways that differ from typical consumer usage at home. In the food sector, major CPG brands often allocate up to six times more resources to marketing and advertising established products compared to innovation, which may include costs associated with renting trendy storefronts in bustling urban areas.
Additionally, there is a growing trend towards health-focused products, such as those containing calcium citrate bariatric advantage, which can cater to the needs of health-conscious consumers. By incorporating such elements into their product lines, CPG companies may find new opportunities for growth. Ultimately, the challenge remains for these brands to balance innovation with the proven success of existing products, especially in a marketplace that increasingly values health and wellness.