CPG Trends 01 June 2022
Our May Roundup: Paper Ketchup bottles, Starbucks exits Russia, and geopolitics impacts consumer trust
Catch up with the news that piqued our interest in May – the sustainability credentials of paper Ketchup bottles, the exit of Starbucks from Russia and the way geopolitics is impacting consumer trust.
4 minute read
Catch up on your May CPG news from the Sevendots team.
Kraft Heinz is showing its commitment to more sustainable packaging with the launch of its ‘renewable and recyclable bottle made from 100% sustainably-sourced wood pulp’. Kraft Heinz plans to ensure all packaging is recyclable, reusable, and compostable by 2025 and achieve net-zero greenhouse gas emissions by 2050. According to their CEO, Miguel Patricio, the release of the paper bottle for their ketchup is part of this vision.
In response to this announcement, Just Food has published this piece entitled ‘Paper bottles are sexy but are they good for sauce?’ The piece highlights scepticism about these types of packaging changes, which still require modifications to a recyclable product (in this case, paper) in order for the product to store effectively. Concerns include chemical use, and the true sustainability credentials as a result.
The takeaway is:
“Just because it’s not plastic doesn’t mean it’s more sustainable. In their plastic panic, there is a fear brands are still shunning the nuance in their announcements and investments. They are reacting to pressure rather than proactively seeking sustainable solutions.”
In short: The new Kraft Heinz paper ketchup bottle appears as an exciting new take on sustainable packaging. But how credible is it? Criticism suggests more transparency would be required to better understand the sustainability performance.
From Marketing Week
Despite the increasing interest and importance of personalization in consumer experiences with brands, this piece from Marketing Week expresses some doubt over the entire endeavour.
Why? Your data probably isn’t good enough: “Most third-party data is, to put it politely, garbage.” Testing revealed poor accuracy, even with ‘simple’ demographic targeting as for gender or age (accurate only up to 42.3% and 44% respectively).
Additionally, the piece argues that even if personalization is achieved, the consumer’s individual needs would not be able to be met. It’s a cynical position: “Arguably, there has never been a successful piece of personalised creative in human history. The biggest movies, books, songs and ads all speak to universal experiences that resonate with everyone, everywhere.”
Sevendots Partner Elisa Costa says:
“A provocation and a reminder that personalization requires effort and care in order to be effective. When personalization cannot be built from good quality data and when it doesn’t deliver added value to the consumer, it is not worth pursuing.”Elisa Costa
In short: Personalization is in demand, but criticism is strong:
“Simply put, personalization at scale is an oxymoron. Personalization is an unscalable tactic that massively increases creative and media costs, which nullifies any so-called efficiencies.”
How true is this view, and how essential is personalization for consumers?
From the Edelman Trust Barometer
We’ve seen trust shift in recent years, and in the 2022 Edelman Trust Barometer Special report, we see the Russian invasion of Ukraine influencing the addition of geopolitics to the list of business priorities.
The report shows the societal divide in trust has never been greater, especially in Western nations, while trust in home companies and brands continues to increase. 95% of consumers expect corporations to act in response to an unprovoked attack in countries where they do business, with half stating they buy or boycott brands based on their response to Ukraine. To quote:
“Geopolitics is now a litmus test for trust. There is a huge potential boost in trust for a company that ceases doing business in Russia (while protecting former employees, +31 points) while there is a huge trust loss for companies continuing to do business in Russia (-38 points). No sector gets a free… even the life-sustaining healthcare and food sectors are under pressure to depart…”
In short: Companies must juggle ‘financial and economic performance with societal impact’ and now also have an additional factor to consider: Geopolitics. All of these interact with and influence consumer trust.
From Ad Age
Following on from the Edelman report, we saw McDonald’s and then Starbucks commit to suspending operations in Russia. Starbucks has committed to assisting employees to transition to new roles, making a strong and decisive statement in opposition to the war.
Companies who may have been slow to respond are increasingly clear about the necessity of this action – surely encouraged by consumer sentiment, which suggests over and over the need for business to respond.
In short: Starbucks, like McDonald’s before it, has shut up shop in Russia.
From Grocery Dive
The influx in e-commerce activity may be cooling off, post-pandemic, but there is still a big demand for e-commerce fulfilment. Retailers are designing and re-designing their stores for picking efficiency. Craig St. Clair of Cuningham, an architecture, design and planning firm, says grocers have been hesitant to invest in dedicated e-commerce facilities, however:
“Grocers that are seeing high online order volumes are looking to improve shopper flow and carve out dedicated spaces for online order fulfilment inside their stores.”
Grocers are also turning to technology to speed up the process of fulfilment and improve the quality of selections for consumers, combining automation with quality control. It’s all part of the trend we’ve been talking about lately – that the future of retail stores will demand more from the physical store that cannot be offered online. You can read more from our Partner Colin McAllister on this trend here.
In short: Grocers are leveraging automation technology, training, and redesigning stores for better e-commerce fulfilment.
From Marketing Week
Coca-Cola has committed to increasing its “consumer-facing marketing to maximise returns while driving productivity”. Innovation is at the heart of the marketing strategy, and the Real Magic platform really stood out to us:
In September, Coca-Cola unveiled ‘Real Magic’, its first new global brand platform since 2016. Under this new platform, the beverage giant said it would change the way it communicates with consumers, by moving away from broadcast communications to create an ecosystem of experiences.
Utilizing considerate partnerships and collaborating across all parts of the business are both key to realizing innovative growth solutions, Coca-Cola’s key focus post-pandemic.
In short: Coca-Cola makes innovation a primary focus, particularly looking for new ways to communicate and connect with consumers.
That’s it for another month. What news stood out to you this month in CPG news? Chat with us on LinkedIn – we’d love to know what’s grabbing your attention.