Kevin Ryan's: Culture Matters
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Destroy to Create
Danone S.A. has launched a new Horizon brand milk called Growing Years. Developed in partnership with pediatricians, the new milk is formulated to deliver superior nutrition to children 1 to 5 years of age. Each 8-oz serving provides 50 mg of DHA omega-3 fatty acids to support brain health, 55 mg of choline to transport DHA in the body, 1 gram of prebiotics to feed good gut bacteria, and vitamin D and calcium to aid in bone growth. The milk also contains 8 grams of protein and 170 calories per cup.
Alt-dairy maker Mooala closed an $8.3 million Series A financing round led by TX-based Sweat Equities. Known primarily as makers of banana milk, Mooala also produces oatmilk, almond milk and plant-based creamers. According to a recent interview with the company’s founder on Forbes, the company (started in 2012) tripled their sales last year and expects to double again this year. This is in-line with SPINS data collected by the Plant Based Foods Association that shows an impressive 6% y/y growth in plant-based dairy alternatives and an associated 3% decrease in traditional dairy.
Coca-Cola announced last week that, for the first time in a decade, they will be launching a new brand in North America: AHA. The brand is a line of flavored sparkling waters with “bold packaging” and “bold flavor fusions,” according to the company. The calorie-free, sodium-free offerings pair standard fruit flavors with more trendy ingredients. The eight flavor fusions include: Lime + Watermelon, Strawberry + Cucumber, Citrus + Green Tea, Black Cherry + Coffee, Orange + Grapefruit, Apple + Ginger, Blueberry + Pomegranate and Peach + Honey. Two of the varieties ( Citrus + Green Tea and Black Cherry + Coffee) contain 30 mg of added caffeine for “a little morning or afternoon pick-me-up.”
So What? What took so long for Coca-Cola to seriously get into the booming sparkling water business? Aside from small bets with the Topo Chico acquisition and Dasani Sparkling (now discontinued with the launch of AHA), it’s easy to believe that Coca-Cola was completely blind to the rise of this uber-trendy beverage. Don’t bet on it! In fact, I’m quite confident that Coke saw the sparkling water trend coming before any other player—just as many major yogurt companies saw the rise of Greek and milk companies saw the rise of dairy alternatives—but they failed to act on it in a meaningful way until it was too late. Why? Because most major CPG companies are not set up to operate under Picasso’s mantra:
“Every act of creation is first of all an act of destruction." ― Pablo Picasso
Coca-Cola saw the anti-soda, anti-sugar/HFCS, anti-artificial ingredients, pro-natural energy trends more than a decade ago, and they acted. Remember Coca-Cola Life (stevia sweetened Coke)? What about craft Coca-Cola? Coca-Cola Blāk (coffee-infused Coke)? Of course, what all of these have in common is that they were all just minor variations of original Coke, and that’s the problem. For such a major cultural shift, minor formulation changes were never going to suffice. However, that didn’t stop Coca-Cola from desperately trying. That’s because, for most major companies, every problem is first viewed through the lens of their current capabilities and their major brands. Coke wasn’t asking itself “how might we make a product that provides all-natural refreshment,” it was asking itself,” how might we make a trendy Coke product that runs in our plants.”
The reason startup companies can be so successful at disrupting traditional CPG categories is because major companies have to wage two battles to compete: one against the startup and another against their own internal dispositions. While major companies are twisting themselves into knots trying to make their existing brands and production lines learn new tricks, startups charge onward.
I look at rapidly declining categories like soup, cereal, and milk and still see major players pasting trendy benefits onto tired formats and brands, hoping that the least amount of change will deliver breakthrough results. Destruction, of sacred cows and long held beliefs, is sometimes necessary to allow for growth. Will Coca-Cola’s efforts be enough ‘destruction?’ We shall see.
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Variable Speed Consumption
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Hershey’s is opening a pop-up shop in Toronto this holiday season called Hershey’s Bake Shop. The shop allows consumers to choose their dough, choose their Hershey’s mix-ins and bake on-site. Hershey’s is partnering with Toronto bakery Sweet Flour Bake Shop (founded by General Mills alum Kim Gans) to utilize their lightning fast 2 minute cookie baking technology to get consumers from dough to baked goods as quickly as possible. For those who are overwhelmed or just need help choosing their mix-ins, Hershey’s has pre-mixed and pre-baked offerings to choose from.
Colorado-based Locai Solutions has partnered with grocery retailer Wakefern Food Corp. (the largest retailer-owned food cooperative in the US) to launch an AI meal planning solution called ‘CookIt.’ The system offers consumers personalized recipes, ingredient recommendations and meal costs based on the items already in their online shopping cart. The goal is to make meal planning easier and faster by taking into account consumer’s personal preferences and restrictions. The pilot program is being tested under Wakefern’s ShopRite banner in Connecticut.
So What? Do you listen to podcasts? Do you speed-listen? Podcast apps now allow you to listen at 1.25x, 1.5x, 2x, and even 3x the normal speed (Overcast, the podcast player, also uses intelligent software to cut any pauses in speech for a similar time savings). Not to be outdone, just last week, Netflix announced they were testing similar tech for their streaming content (something that has been available on YouTube and any DVD player for years).
Of course, this type of media consumption has its critics. Listening to podcasts at enhanced speeds (so-called ‘podfasting’) has been a topic of internet debate for years. Now, Hollywood is erupting over the news of the Netflix test. What critics tend to get wrong about this, as do the very companies that sell such tech, is that it’s not about how fast or efficiently you can inhale content. On the contrary, what I’ve found by talking to friends that speed-listen or watch, as well as through my own experimentation, is that its more about being in total control of the experience. In fact, now that I know it’s possible, I find myself speeding up and slowing down content to fit my needs. Net-net: I want open access to the product and I want to consume it at the speed and in the form of my choosing.
I think the same idea is taking hold in CPG. Consumers, now familiar with the concept of manipulating (e.g. speeding up, slowing down, pausing and fast-forwarding) their experiences with products, are expecting the same from food. I think that’s why consumers are so fascinated with Instant Pots and sous vide cooking, they are the ‘fast-forward’ and ‘0.5x speed’ buttons on food preparation.
However, I don’t think this ‘variable speed’ mindset needs to stop with at-home food prep. As the Hershey and ShopRite examples above show, there may be opportunities for food manufacturers and retailers to capitalize on this trend. My advice would be to map out the process of manufacturing and distributing your product, cutting the timeline into discrete steps. Then ask yourself: could we pause it here for the consumer? Speed it up? Or even rewind here? Sample ideas:
- Campbell’s: partner with a grocery retailer and allow consumers to combine your flavored broths and cream-bases with in-store precut vegetables and meat. Perhaps have it pressure cooked in-store while they shop or pre-order on app.
- Nature Valley: Sell raw, refrigerated granola bars that consumers bake at home; Or what about a ‘refresh’ sleeve where you can heat a granola bar in the microwave
- Smithfield: Partner with grocery stores to install in-store marinating stations and vacuum sealers (think: robotic butcher). Consumers can pick the meat they want, a customized marinade is added, and the product is vacuum sealed into the appropriate size for the household.
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FourPoints, a company out of Denver, CO, has launched a “slow burn” energy bar featuring dried plums (aka prunes) as the first ingredient. The fiber rich, high protein bars contain cashews, flaxseed, whey protein and (in a few varieties) caffeine, and were developed to provide sustaining energy for skiers and hikers. The brand plans to switch to all-hemp protein within the year. The bars are available for purchase at REI, regionally at Denver supermarkets, and through the company’s website. So What? Two things intrigue me about this new brand: (1) The close partnership between FourPoints and the California Prune Board (see this link off their site and the associated on pack and in-event marketing partnership). The Prune Board’s choice to put their power behind a startup (versus a major brand or starting their own brand—like OceanSpray) says a lot about their strategy and may spark even more partnerships between startups and agricultural cooperatives; (2) The compelling potential for dried fruit to carry such an on-trend, functional benefit. For years, brands like Larabar have leaned into the ‘real food’ aspect of dried fruit, but few brands are calling out their “macros, micros and phytos” like FourPoints. Dried fruit fits so many ‘on trend’ points that its rise is all but inevitable: its sweet but not full of artificial sugar, its (sometimes) low in glycemic index, its rich in fiber (at a time when high protein diets are leaving a huge ‘fiber gap’) and it contains a concentrated dose of all of the nutrients our juicing habit has left out. What we are seeing is the blurring of functional bars (think Quest) with ‘whole food’ bars (e.g. Pure Organic) to arrive at a hybrid state. That’s It did something similar earlier this year with their Probiotic Fruit Bars, but this feels like a new and exciting area.
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Chicago-based TeaSquares has launched a light snack of puffed millet, almonds, pumpkin seeds, coconut oil and brown rice syrup. Each ‘square’ is infused with tea, providing 30mg of caffeine per serving. The company founder believes they are launching into a whitespace where consumers are looking for mid-afternoon energy but don’t want a bar loaded down with calories and protein. Flavors include: Acai Blueberry, Citrus Green Tea Matcha, and Vanilla Chai. Monster Energy, partially owned (16.7%) by Coca-Cola, has launched the first 100% vegan oatmilk energy drink. Called Farmer’s Oats, the beverage is part of Monster’s existing Java Monster line and contains imported coffee as well as Monster’s plant-based energy blend. The beverage was launched in Southern California accompanied by ‘Vegan Brunchdown’ Launch Parties at local cafes. So What? Coffeeshops are in trouble. Many of the consumer Jobs that used to sit squarely in their store are now migrating into retail. In the last year, there has been an exponential growth in the number of products with caffeine (just look at this week’s newsletter alone). However, unlike products with ‘protein’ or ‘antioxidants,’ where the appetite appears near limitless, there is a self-imposed, finite nature to caffeine products. Unless coffeeshops do a better at positioning and messaging for distinct consumer Jobs in their caffeine offerings, I predict you’ll start seeing a sharp decline in their sales as consumers find their ‘pick-me up’ in more convenient and tasty ways.
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P&G Ventures, a division of P&G, is beta-testing Opté, an inkjet printer for your face. The handheld device instantly scans (taking 200 images per second), mixes and distributes pigment onto the skin using 120 tiny inkjet nozzles, camouflaging age spots, sun spots and other forms of hyperpigmentation (while also applying niacinamide, a form of vitamin B3, that reduces skin discoloration). The result is blemish-free skin even close up. Plus, because the device uses such a tiny amount of pigment (1,000 picoliters droplets) there is far less makeup on the skin in general. The device retails for $599 plus serum refills. So What? P&G’s brilliant insight here is that applying makeup is a skill that isn’t easy to master (nor one some people ever really want to). However, many consumers don’t want to go all the way to surgery or use chemicals to correct their skin. This ‘meet them halfway’ solution requires some consumer action, but provides a foolproof, perfect result every time. All of which makes me think: P&G should be designing meal kits. Too often, companies make the mistake of thinking that consumers want to (or can) acquire the skill to cook a meal—forcing consumers to chop, sauté and knead. At the same time, this consumer doesn’t want to go all the way toward buying something pre-prepared. What they want is super simple prep where they have a sense of control but with guaranteed perfect, chef-like results every time. Whoever makes something like that will print money.
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From Innovation to Ideation
Malachite can serve as guide, coach and inspiration in your company's journey toward a profitable pipeline. From consumer interaction, to whitepapers, ideations and prototyping, Malachite can help. Visit malachite-strategy.com for more info or email kevin@malachite-strategy.com. |
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