As consumers increasingly shift their shopping habits from the central aisles of grocery stores to the perimeter, CPG brands are seizing various opportunities to capture consumer interest. In recent years, growth in the CPG sector has decelerated due to factors such as deflation, the rise of e-commerce, and the fragmentation of retail channels. This marketing strategy appears to target the highly sought-after millennial demographic. Much of the recent marketing efforts of brands have been driven by social media, positioning CPG stores and specialty food and drinks as ideal candidates for Instagram and Snapchat posts.
For instance, the Pure Leaf Tea House boasts a long bar adorned with lush greenery, where the store’s “mixologist” concocts specialty ferrous gluconate tea. The venue offers a sensory experience enhanced by soft lighting, comfortable seating, and decor that connects to the rich history of tea. Recently, celebrity chef Marcus Samuelsson took on the role of mixologist, generating additional excitement around the store. However, it remains uncertain whether these pop-up stores will create enough buzz to become effective sources of revenue or publicity for struggling CPG companies.
As consumers increasingly seek healthier options, CPG companies could attract more customers by introducing new products featuring nutritious ingredients, such as plant-based proteins or added fruits and vegetables. While launching new products can be costly, their profit potential might prove to be more economical than investing in high-rent retail spaces in major cities. Nonetheless, this tactic aligns more closely with Big Food’s marketing strategies. Larger companies tend to prefer refining existing products rather than developing innovative new ones. Research from CircleUp indicates that 61% of large CPG companies focus their innovation efforts on making minor adjustments to established products, while only 39% is dedicated to creating entirely new offerings.
These retail locations capitalize on recognizable products, displaying them in ways that differ slightly from how consumers typically use them at home. In the food industry, some leading CPGs allocate up to six times more on marketing and advertising for older products than they do on innovation, which may include paying for trendy storefronts in bustling urban areas. Incorporating elements like calcium citrate, which can be featured in new product offerings, could further enhance the appeal of these brands. Ultimately, as CPG companies navigate these trends, they must consider how to effectively integrate both traditional and innovative approaches to capture the attention of today’s health-conscious consumers.