CPG Trends 02 February 2022
Our January Roundup: Is personalization risking customer experiences? Also, consumer health education, the circular economy, and more
In January's roundup, is personalization risking the quality of customer experiences? We also explore 'food as medicine', blockchain for a circular economy, and consumer health education.
9 minute read
Catch up on the latest CPG news from across industry, during the month of January 2022.
From Progressive Grocer
In this piece, Diane Quagliani explores the concept of “food as medicine”, and how this concept can be applied by retailers. It’s a short read, but suggests five models that retailers can use to implement and evaluate their programs, including path-to-purchase marketing, food incentives, and personalized nutrition education. This touches on several key trends we’re seeing in industry right now.
Sevendots Partner Eugenio Perrier had this to say about this topic:
“The dramatic increase of life expectancy in the western world – almost 10 more years than in the early 80s – is making more people aware of the importance of the quality of food for mental and physical wellbeing. We will continue to see more brands and retailers becoming active through products and communication (e.g. educational programs) to guide consumers toward more added value purchases. These shoppers will soon be able to purchase personalized offerings, designed for their specific needs, thanks to the individual biometrics registered by some connected devices (e.g. wearables). “– Eugenio Perrier
In short: A succinct summary of five models that retailers can employ to deliver a “food as medicine” program. Consideration of these programs offer up opportunities as more personalized data about an individual’s health becomes available.
From The Guardian
In this piece, research around restaurant messaging is shown to have been effective at impacting consumer choices. Researchers tested 10 sustainability-themed messages, in an effort to understand the high rates of meat consumption in the US despite growing awareness of the impact of meat-eating on the environment.
The messaging was shown to be effective, presenting diners with statistics on the climate impacts of their choices, as well as on the “need to protect the planet for future generations [which] yielded positive results in choosing vegetarian meals, suggesting that consumers’ choices can be significantly shaped by how menus are presented.”
The research has been interesting when considering how previous efforts to entice more consumers towards plant-based options have failed or plateaued – in particular, when language around veganism is used. This is considered to be “preachy, righteous, aggressive” according to Jonathan Wise, a consumer researcher. Further examination of how language and labelling impacts consumer choices is still needed. Sevendots Partner Andrea Bielli says about the piece:
“The main challenge for the plant-based proposition is about finding the right way to balance the three dimensions of the Job To Be Done – namely, healthiness, taste and sustainability. This is not only about sourcing and recipes, but also about finding the right way to communicate.”– Andrea Bielli
In short: Researchers found that certain kinds of messaging around the impact of choosing a plant-based option over a meat option in a restaurant setting were effective. It’s an interesting and important step forward when it comes to encouraging consumers to pick sustainability-friendly offerings.
We’ve been talking a lot about new forms of economy recently, and in this piece, Pete Swabey considers the use cases for blockchain in the circular economy. He cites a series of reasons why this technology is of interest, but here was a quote that stood out:
“For reuse and recycling to be maximised, information about a product’s component materials and its usage must pass between the various participants in its supply chain and, after sale, its owners. Proponents see blockchain technology as the ideal mechanism for this, due to its transparency and traceability…”
He proceeds to outline a series of examples of companies who have utilized blockchain to better control, trace and share information about its supply chain. Equally, however, a lot of hype has fallen short, and Swabey examines several of the key challenges in this regard – including the difficulties of integrating blockchain with legacy systems, the difficulties in getting all elements of a supply chain on board with the technology, and concerns around divulging sensitive information.
But there are reasons for optimism – a pilot run by the University of Applied Sciences and Arts of Italian Switzerland developed an open-source public blockchain looking into data on cotton products and their production processes. Considered a success, there was some evidence to show that these technological advances may enable useful data storage and sharing to better understand the impact of each stage of production. There are opportunities presented for start-ups or trade associations (or others) to help further a “networked view of business processes”.
In short: By viewing supply chain activity as a ‘business network’ and beginning the process of leveraging blockchain, there is evidence to suggest that these technological advances may improve how we understand and achieve the circular economy. The traceability and transparency of blockchain is considered ideal, despite the clear challenges that still need to be overcome.
From The Financial Post
Some of the more talked about news of the month? Shareholder discontent with Unilever. In this piece, however, several interesting counterpoints to the conversation surrounding purpose are offered – including the suggestion that it’s not quite as simple as pitting purpose against other strategic factors, or levelling blame in one direction. Unilever is also not alone in dealing with this criticism, as the history at Danone has shown. Sevendots Partner Alain Groenendaal had this to add:
“It is telling that investors call out a company’s focus on purpose as a cause of underperformance, yet rarely cite it as a reason for overperformance. This is a false dichotomy: for long term viability, CPG companies need to deliver on sustainability and social relevance at the same time as they deliver on product fundamentals, because that is what consumers demand.”– Alain Groenendaal
In short: Consumers are demanding delivery on ‘purpose’; shareholders look for growth. No news there. However, Alain’s comment sums it up – it’s not as simple as suggesting that one negates the other. More discussions are certainly unfolding on this topic! Keep an eye out for more from us on this.
How Sephora Revolutionized Makeup Consumption
From the Wall Street Journal
In this series from the Wall Street Journal, the economics of various brands is explained in an easy-to-consume video.
Sephora has been one of the most impactful brands when it comes to revolutionizing the way makeup is bought and consumed – moving from a service-based retail model to an assisted self-service model that has driven consumer trust in the advice received in store. Trend responsiveness and a rise in Sephora-exclusive products have also driven loyalty to the store, despite challenges around the huge increase in products for consumers to choose from in the personal care space.
This series from the WSJ is a great format for offering up quick and interesting insight into the way several well-known brands work. The comments are also an interesting look into how many consumers feel about it!
In short: A quick but informative dive into how Sephora has changed the way makeup is consumed.
From Progressive Grocer
In this piece, research from The NPD Group demonstrates how consumers are overly focused on eating protein, to the detriment of other important dietary needs. It is suggested here that new and trending diets like paleo and keto might be drivers of this focus on protein, though in general all adult age groups were found to be “exceeding the recommended protein intake of 0.36 grams of protein per pound of body weight daily.” This isn’t so much a concern in itself, bar the fact that it often means there is an imbalance in the number of other important components of one’s diet – namely, sodium and fiber.
The study showed the average person was eating way too much sodium, and not enough fiber. In all, the conclusion of the piece emphasizes the importance of educating consumers on their nutritional needs, to help them achieve healthier lives.
In short: The obsession with protein intake is starting to impact nutrition, coming at the cost of other necessary components of a healthy diet, according to new research from The NPD Group. How can brands help educate consumers on what is needed for a truly healthy life?
From Tony’s Chocolonely
This piece comes to us from our Next Gen led laboratory The Red Flower Factory. In this blog released early in January, Tony Chocolonely is addressing the problem with sugar in our diets head on:
“To put it bluntly: while selling more cocoa beans is a win for our impact, eating too much of it is bad for your health.”
Citing statistics on the overconsumption of sugar in their home country of the Netherlands, the brand offers a more detailed sugar consumption report, as well as suggesting how they might balance their impacts on consumer health. On the topic, our partner at the Red Flower Factory, Beatrice Soncina, says:
“Tony’s Chocolonely is quite a disruptive brand, and knowing that, this is still an interesting move from a brand that plays in a category that relies heavily on sugar. I am looking forward to seeing how this will develop. Will they launch a sugar free bar or one with reduced sugar content?”– Beatrice Soncina
In short: Tony Chocolonely has taken a bold move: acknowledging its own role in the overconsumption of sugar. The strong stance has caught the attention of our Next Gen led laboratory The Red Flower Factory.
Okay, we’ve probably all heard enough vague claims about the metaverse and what it will mean for consumers already! But in this piece from Wired, Cecilia D’Anastasio addresses the elephant in the room: the metaverse is just a worse version of something video games have been doing since… forever.
“What we’re dealing with here is cyberspace—connected, incarnated, and economized. There’s still just one problem. Everything actually desirable about this metaverse resembles a pared-down version of the online games millions have been playing for decades.”
In particular, this article makes the point that the main changes offered aren’t totally positive – in particular, there are concerns around a higher barrier to entry for the metaverse (as it requires expensive purchases of items like the $300 Oculus headset, in the case of Meta’s offering). Integrating NFTs is also not proving as exciting as first imagined. The conclusion seems particularly apt:
“Over the last year-plus of lockdown, not one existing virtual world has been in a position to capture corporate meetings and ecommerce. Online games, in the meantime, bloated to accommodate a baser and more prevalent desire: to be together and relate as people, not as workers or consumers.”
The big question then remains: what meaningful change does the metaverse offer consumers? This will be something that brands bursting to jump on the bandwagon will have to answer for themselves.
In short: The metaverse takes out there are vast and varied. But in this Wired piece, the many offerings of a metaverse are met with scepticism: all the features are already offered by online games. In which case, what does the metaverse really offer brands and consumers alike?
From Marketing Dive
Ad spend increases are accompanied by increased pressure on retailers. This piece examines the pitfalls that remain for retailers when it comes to meeting the expectations of CPG marketers – whether it’s in the rush to digitize, the lack of technical expertise, or the impact to the customer experience. Alongside a doubling in retail media marketing spend last year, there are also the external pressures that come with big changes to data collection – the end to third-party cookies, in particular.
The rush to partner with the right platforms and ad-tech firms has been noticeable, in an effort to continue to reach customers. A combination of the right technological solutions, the right hiring strategy, and the right campaigns, are all essential components in this transformation.
“Will retailers use the windfall wisely? There are plenty of gaps that need to be closed as mastering digital marketing remains a tall order for internet natives, let alone companies with little tech… The pandemic forcing retailers to jump to e-commerce has clearly demonstrated the pitfalls of falling short on the customer experience end.”
From CMS Wire
In this piece, CMS Wire offers a perspective on the potential drawbacks of personalization – while the use of personalized data is expected and demanded by companies, much of the application has been in automating services and engagement with brands. The drawback comes when this information is used only to optimize for efficiency in customer engagement; this piece asks, ‘Is the efficiency of this automated personalization a trade-off for actually listening to the customer?’
With customer expectations higher than ever, the stakes are also increasing when it comes to delivering on one’s promises. This piece argues that brands must consider more than mere efficiency when it comes to delivering exceptional customer experiences, which tends to mean focusing only on reducing the effort required to push a customer towards a sale.
“Authentic customer relationships are not built through these merely transactional interactions.”
This means closing the “Engagement Capacity Gap” – the “chasm between the growing number of customer interactions, the increased expectations that these interactions bring, and the resources companies have to fulfill these expectations.” A hybrid approach is recommended, driving automation that still looks to understand customers fully.
In short: Automation and data gathering has helped shape strategies to deliver personalized customer experiences. However, this piece cautions the need to personalize with a human touch – authentic customer relationships require more than transactional engagements, and efficiency cannot be the only goal. Personalize with care!
From B the Change on Medium
Here we have a discussion of what consumers are looking for, and what Danone in particular is doing, to address regeneration in food brands. It’s a practical continuation of our discussion on this topic, and includes a podcast between Danone and brand leaders from Impossible Foods and Desert Bloom.
Highlighted in the piece is the next generation’s interest and desire to see more responsibility from brands, as well as examples of what Danone is doing so far. And if you’re interested to know more about the tools Danone are implementing to further its regeneration aims, you can read more below!
In short: Here is a brief but example-filled look into Danone’s efforts to further their sustainability mission.
That’s it for another month. If you’d like to receive more interesting content from us, check out our most curated knowledge with our latest Growth Series report on Big vs Small brands.