Food And Drink Brands Need To Adapt Quickly To The Post COVID World
“The kaleidoscope has been shaken. The pieces are in flux. Soon they will settle again. Before they do, let us re-order the world.”
I don’t often quote Tony Blair, but there is a first time for everything. Maybe it’s because, as a child of the 1970’s, my kaleidoscope was one of my most prized possessions. Though much of the grocery data hasn’t yet emerged, we can start see the shapes and structures of the new food and drink world that will emerge post Coronavirus. Using that glimpse, we can begin to think about what we can do now, to anticipate what’s coming and ensure we change what we need to.
In addition, we’re polling our nearly 1,000 strong HRA Consumer Panel panel to see how shoppers are changing their behaviours and attitudes towards food and drink. We’ll be sharing that with you as soon as its ready. Suffice to say, Food and drink brands need to adapt quickly and here’s my take on how.
Product Ranges are one of the cornerstones of category management. The multiples are busy adopting elements from the discounter playbook, culling ranges to force volume into core SKUs to create manufacturing, merchandising and supply chain efficiencies to cope with a 25-30% rise in demand. Consolidating sku’s is an idea we all like in general, but not when it applies to our favourite products. When the multiples start to look and feel like larger versions of discounters across hundreds of subcategories, shoppers are likely to revert to ‘real’ discounters who are cheaper and for whom selecting a limited core range is their single minded focus.
So, the multiples simply have to differentiate on range, innovation, service and quality to survive. This means they will adeptly move from crisis mode into future planning as soon as is feasible. Retailers won’t simply go back in time to turn back the clock and re-list all the brands they had as at February 2020, as the world will have moved on in seismic ways. This levels the playing field as there are now significantly fewer incumbent brands in each category. There will never be a better time to secure that big listing breakthrough as the coming months as with everything in flux, your chances are as good as they are going to be.
Shoppers are taking what they can, brand or own label, from the shelf. There is every chance that, having been forced in some categories to buy a new brand or own label product, they will start to prefer it. Shoppers may also feel in other categories the grass is always greener and they will be desperate for a change. Shoppers have adopted both online shopping and cashless transactions like never before and discovered anew the virtues of the convenience retail channel.
This period will leave shoppers with ‘scars’, not just the obvious economic damage to their family incomes in many cases but a more generalised, heightened anxiety about the future. People are already re-evaluating swathes of their lives – my bet is that brand purpose and behaviour will become more important going forward. Call me cynical if you like, but I think shoppers aren’t fooled by some of the ‘virtue signalling’ going on right now.
One of the early casualties will be the removal of the assumption that we can have all year round, cheap, available food in every category. From flowers to tropical fruit and salmon to strawberries, we will see a greater sync between the retail cycle and the underlying crop seasonality. High street stores will suffer further as we increasingly move to central warehouses, click and collect and online food delivery.
There is no way shoppers are just going to re-adopt their previous brand preferences and consumption patterns. Brands who have built carefully calibrated brand propositions and architectures need to rethink their role in the category and the life of the shopper. Listen to shoppers in the right way through some of the latest innovative research methods. Learn from shoppers, honestly critique your offer and make changes during this period. Then you will be well positioned to remake the future. Kim has a great article on your options to do that when you can’t speak to shoppers in person, in her article Can Online Research Techniques replace face-to-face methods?
Back to the kaleidoscope pieces settling. The multiples will need to build their ranges back out again to differentiate and drive footfall. Many, many incumbent brands have been delisted and there will be an appetite for innovation and fresh new products. The buyer’s doors will be open, with many old category assumptions trashed by the crisis. You can’t rely on your historic sales performance in this new world – the past is effectively a foreign country.
If you want to be part of this new world, my strongest advice is that you need to bring evidence to the table as to why you deserve a facing or listing. If you are not listed at the moment then the evidence you need to justify your position on shelf can only come from talking to shoppers now – doing this research during the COVID crisis and understanding what role your brand and products play in their lives. Digging into what pain points your brand resolves for shoppers, what it brings to the category and the benefits listing it will bring to the retailer in terms of driving footfall, volume and value. Listen, learn, analyse and then persuade.
We will get through this crisis and the retail listings boat will sail again. Don’t miss it.
Good luck for the next month, make sure you get some quality headspace over Easter and do please drop me a line if you’d like a chat about how you can get in shape for the new world on hamish@hra-global.com. You can also find our company details on our contact us page.
Hamish
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