Kraft-Heinz has launched
Kranch, the mix of
Ketchup and R
anch dressing, the company’s latest combination of their iconic condiments.
Kranch follows in the footsteps of
Mayochup (mayonnaise and ketchup),
Mayomust (mayonnaise and mustard) and
Mayocue (mayonnaise and barbecue) that were release last month.
As part of their new snacking innovation push,
Conagra has
announced that they are launching a series of snacks anchored in their existing brands. This includes:
Slim Jim Pork Rinds,
Vlasic Pickle Chips (vacuum-fried pickles not potato chips), and a
Duncan Hines microwave cake cup with
Oreo branding.
Nestle SA is
launching their plant-based
Incredible Burger in Europe this month. The burgers, made from soy, wheat, beets and carrots, will be available in Germany, the Netherlands and Sweden under the
Garden Gourmet brand.
Nestle SA has indicated they plan to launch the same product in the US near the end of the year, labeled as the
Awesome Burger, under their
Sweet Earth brand.
So What? On Dec 2, 2018, 19-year old Atlanta rapper, singer, songwriter
Lil Nas X dropped a single (on
SoundCloud and
TikTok) called
Old Town Road. The song, which contains references to cowboy culture and country music themes while using rap/hip-hop styling, simultaneously hit three
BillBoard charts: the Hot 100, Hot R&B/Hip-Hop Songs and Hot Country Songs. However, on March 23
rd, the blog SavingCountryMusic.com published a piece titled
“Billboard Must Remove Lil Nas X’s ‘Old Town Road’ From Country Chart.” Billboard followed later that week by
removing the sound from the Country chart saying, “it does not embrace enough elements of today’s country music to chart in its current version,” and the previous inclusion on the charts had been, “a mistake.”
Backlash was swift and prolific. Country music star Brian Kelley, from
Florida Georgia Line, voiced his disdain for
BillBoard’s move, Justin Bieber was
upset, the
Texas Tech Basketball team
thumbed their nose at the whole thing and, most critical of all, country legend Billy Ray Cyrus not only took to social media but he partnered with Lil Nas X to record a
remix. Basically, daring
BillBoard to say it still wasn’t country enough.
BillBoard hasn’t budged yet, but all the attention pushed the song
to #1 Monday on the Hot 100.
There is so much to unpack here. However, a newsletter on CPG activity is not the place to debate the fundamentals of modern music styles OR to address the potential racial undertones of this matter. But it is the place for us to discuss one thing: the erosion of categories.
Traditionally, categories help us make the world tidy, organized and easy to navigate. Imagine walking into a grocery store that had items scattered randomly, how would you ever find anything? The presence of categories allows us a sense of permanence and a level of convenience (i.e. we all know that the pickles are stocked by the ketchup and that the peanut butter is by the jam).
However, what I’ve described is a brick and mortar world, a world of physical space. In the last 20 years, we’ve all been introduced to a new world that doesn’t play by these rules. If you want to find peanut butter on
Amazon or
Walmart.com, you don’t look by the jam, you type in ‘peanut butter’ and it magically appears in a long list where it’s probably interspersed with peanut butter crackers, chocolate peanut butter ice cream and (depending on your browsing history) a book about peanut allergies.
The digital world has begun to erode the simple organizing constructs that the last few centuries of commerce, commercialization and retail have put into place. Let’s be honest,
the reason Billboard has ‘categories’ at all is so that that they can track sales for commerce. Placing things into categories makes them easier to measure. Prior to the advent of recordings, music definitely had ‘styles’ but the
lines between genres were more fluid than they are today. Digital discovery algorithms and consumption habits have broken these artificial walls. For example, with my
Pandora playlists, I can start out listening to the dulcet tones of
Adele and 30 minutes later I find myself tapping my foot to
rockabilly! Similarly,
Netflix has made me realized that my favorite movies aren’t simply Action but genre-bending themes like
Visually Striking Gory Crime Movies with Strong Female Leads.
This category decay will only escalate as we increasingly become an omnichannel society. The more we look at multiple screens while we scan physical aisles, the more the very concept of things having a distinct ‘category’ will disappear. The knee-jerk reaction of companies and governing bodies will be to fight this, to preserve the categorization that they’ve built their success upon. In other words, vegetables should stay in the produce section and dairy products should stay in the dairy aisle. Just last week, a
European commission in Brussels decreed that vegetable-based ‘burgers’ must be called ‘veggie discs’ and milk producers
want to call plant-based beverages ‘imitation’ or ‘fake,’ removing their ability to use the words ‘milk,’ ‘yogurt,’ or ‘butter’ from their products. However, in my opinion, this (and
BillBoard’s action) is a fruitless attempt to hold on to rigid, analog thinking in the new fuzzy, digital world.
The better approach is to embrace the inevitability and freedom that this change enables. Traditional CPG companies are built around physical categories (i.e. aisles) that are eroding in our digital world. To compete they must make their internal divisions more porous. You are seeing the very early phases of this with
Kraft’s playful blending of condiments and
Conagra’s crossover snacks. Imagine a world where you cross the soup aisle with the cereal aisle? Or the meat counter with the dairy case? Yes, this explodes the classic P&L structures that most corporations are built on and will require major re-tooling of innovation across the board, but consider the potential for new products? In my opinion, the defining factor for competitive CPG will soon be their ability to effortless innovate across traditional grocery categories, fluidly combination categories. If big CPG doesn’t get comfortable with category blending, young start-ups and digital retailers (that structurally don’t have this hang-up) will be more than happy to create cross-category products for consumers.
