Two weeks ago, CircleUp hosted a lunch for CPG buyers, brokers, merchandisers, sales/marketing/finance consultants, etc. Bringing together different perspectives (including experts on Amazon, Costco Wholesale, Whole Foods Market, along with emerging ways to shop i.e. Stockwell) was eye-opening. Here are my 5 takeaways (all views are my own).
- We live in an age of “temporary brands”, many of which may not be around for decades to come (they aren’t designed to be). The best ones will get acquired/absorbed. The worst ones will go out of business. As it gets easier to start a brand, it gets easier for a brand to fail. Which, to me, means that “temporary brands” are here to stay. As an investor, I spend a lot of time trying to figure out which brands (and founders) are in it for the long-run.
- Retailers win whether a brand succeeds or fails. Slotting fees are going up, and more brands are throwing themselves at buyers. It seems like the on-shelf environment is going to get worse before it gets better. But, prioritizing slotting fees is not going to lead to success for a retailer (the retail environment is tough for more reasons beyond that as evidenced by the news on Fairway, Lucky’s and Earth Fare).
- Amazon strategy is a need to have for brands (not a nice to have). But, Amazon can’t be the only channel a brand uses for awareness. Amazon is great at servicing a set of customers that are interested in something about a product, brand or its attributes - it’s not as good at introducing brand new customers to a brand.
- If you’re an emerging brand, don’t forget about co-ops — they are great places to build a brand (turns are great but shelf-space is limited). NCG should be a part of your strategy.
- The industry is still early in how it uses data in decision-making.While everyone at the event was hungry for data, I got the sense that brands and retailers hadn’t quite gotten there yet. There’s a lot of room for improvement and understanding here.