CPG Trends 31 October 2023
Our October Roundup: Alt protein price parity, eco-labels, and the sale of Dollar Shave Club
In this roundup, we cover the sale of Dollar Shave Club and its impact on the DTC landscape, the impacts of climate change on beer taste and price, a failed biscuit rebrand, and changes to sustainability labelling.
4 minute read
Welcome to another monthly roundup, covering all the news that caught our eye from across the CPG industry. Catch up in just a few minutes:
From The Drum
Oatly in the UK launched a cheeky campaign challenging the dairy industry to share information on climate footprint and related transparency. This is an interesting approach they have taken and has also been followed by a plan communicated from Arla, to move in the direction of measuring, then reducing (and then communicating) this information as well. Oatly conducted research of 2,000 British adults and found them to be in favour of carbon labelling on products. Young people were particularly interested.
Sevendots Partner Colin McAllister says:
“This is an original campaign by Oatly challenging the dairy industry on its climate footprint and expanding their proposition “from good for me” to “good for the planet”. It’s been followed almost immediately by an initiative from Arla to bring parties together in addressing the challenge. Consumer concern about climate change is now reaching the consumer goods battlefield – interesting times ahead!”Colin McAllister
‘Consumers are confused by all the different symbols and logos on the market’: Calls for internationally agreed standards for environmental sustainability labelling after large survey
Research from a survey of nearly 10,000 consumers across 18 European countries found that 67% would support a universal eco-label for food products. Over two-thirds of consumers would use this to make more sustainable choices. Currently there is no agreed international standard for sustainability labelling or what should be measured. The EU has suggested methods to help improve consumer trust and stamp out misleading environmental claims, such as forcing companies to validate claims through a “Product Environmental Footprint”. This speaks to the Oatly research mentioned above.
In this piece, author Joseph Foley examines the fact that Choco Leibniz maker Bahlsen is planning another rebrand, just two years after their last one which won praise from the design community. Despite the praise of the rebrand, sales dropped, and the rebrand is being blamed, thought to be unpopular with actual consumers.
However, our take on this is that it is unlikely that they launched the new design without testing beforehand with consumers. If they didn’t test, it’s certainly a clear mistake! But it’s just as likely the decline could be down to other factors, which they are now tackling with another redesign. In any case, making a bold move on a heritage brand (whether it’s on formulation, packaging, ingredients, etc), brand owners must test carefully and also clearly explain and communicate on changes. This is to ensure that both current and potential buyers are fully aware of what’s going on and the associated benefits. Sevendots Managing Partner Andrea Bielli says:
“Heritage brands need to find the right balance between consistency and evolution. Recognizing the core brand asset is a foundational element of that.”Andrea Bielli
From Marketing Week
While Unilever has become known for placing ‘purpose’ at the heard of brands, its new CEO says they will stop “force fitting” purpose to all brands. Hein Schumacher acknowledges that purpose remains important and inspiring to consumers, however, it must be done with credibility. He emphasized the importance of all brands participating in Unilever’s sustainability objectives, but highlighted that not all brands require a purpose.
Sevendots Managing Partner Andrea Bielli says:
“When looking at purpose there is not one size fits all and there may be brands that would not fit with a high-level societal commitment. This is why it is important to recognize the different level of ambition for the purpose, as outlined in our framework, to develop a strong brand system.”Andrea Bielli
Read more about our framework for purpose-led growth here.
From The Guardian
This explores the impact of climate change on the cost and taste of beer. To quote:
“Researchers forecast that hop yields in European growing regions will fall by 4-18% by 2050 if farmers do not adapt to hotter and drier weather, while the content of alpha acids in the hops, which gives beers their distinctive taste and smell, will fall by 20-31%.“
While these changes speak to the impact to taste, price will be driven up by higher energy costs.
From Web Mind
Contributing to the growing discussion around the threat vs. opportunity potential of AI, we have the LaserWeeder, an AI-powered weed control machine. The machine is designed to enable more effective agricultural practices that minimizes the excessive use of chemical herbicides, which are all toxic to some degree and impact the environment tremendously. Weed removal is an essential component of agricultural practice, and with this tool at a farmer’s disposal, the sustainability factor can be better controlled. This article indicates a more positive potential use case for AI, aiding environmental outcomes and efficiency in the pursuit of regenerative agriculture.
From Business Insider
Big DTC news from this past week has Unilever selling off a majority stake of Dollar Shave Club to private equity firm Nexus Capital Management. To quote from Fabian Garcia, President of Unilever Personal Care:
“This marks another step in our journey to transition our portfolio towards core strategic growth areas.”
The brand was acquired for $1 billion in 2016. What does this mean for the DTC scene? We think there’s still opportunity in DTC as evidenced in our report here – but this opportunity must be managed effectively. Sevendots Partner Colin McAllister says of the news:
“The experience of Unilever with Dollar Shave Club can be seen in two different ways: it could mean that large companies are simply destined to struggle forever with DTC models, or that they have provided a valuable learning experience of the warnings that must be followed to make things work. We’re convinced of the second option, and have recently brought together all the learnings of DTC in our study.”Colin McAllister
Tell us your thoughts on our latest post on LinkedIn.
In our Alternative Proteins work, we highlighted how taste and price remained barriers to more widespread adoption of alternatives to meat and dairy. In this piece, the German supermarket Lidl has lowered the prices of its vegan products for them to be on par with animal-based equivalents. We were inspired by this news coming from Lidl, taking the initiative on the price gap with its private label and placing products side by side.
See more on the way global grocery markets are changing from McKinsey & Co: The state of grocery retail around the world
That’s it for another month! We will be back with the latest industry news that catches our eye next month.