It’s that time of year where retailers are looking for hot new items and brands for 2018. Expo East is a Baltimore natural and organic food show that brings trends, entrepreneurs, financiers, and retailers together in one event to connect on future category growth and innovation. Usually a hotbed of innovation, this year’s show lived up to that reputation with strong trends for new products and for retailers. Having recently migrated from the retailer side to a brand and strategy consultancy, Concentric, I find myself in a unique position looking at the industry from an insider’s perspective, but with a brand and growth focus. Here are my four key takeaways for retailers from the show.
Retailers should enable (not disable) their key decision makers.
In the condensed trade show environment filled with retailers, brokers and brands, one issue continued to bubble up in conversation after conversation. Major retailers, including Target, Wal-Mart, Kroger and Whole Foods, are all striving to substantially reduce OG&A expenses prompting them to ask category managers to do more with less while leveraging technology to fill the gap.
The problem with this methodology is that retailers haven’t been able to find or create technology to do this effectively. As head count is reduced and more categories consolidate on the desks of fewer and less experienced decision makers, the ability to plan and act strategically has become a mountainous challenge. Reviews and item introductions have been postponed or cancelled altogether, others are asking key suppliers to act as assistants in decision making, and some are simply trying to train a new era of inexperienced decision makers to work with decreasing autonomy and knowledge.
The implications are staggeringly negative for small and mid-size brands. Retailers will have to rely on strategy and direction from those with the most resources i.e. Big CPG and brokers. This closes the door even further to innovation and placement for potential breakthrough brands. Every opportunity will now be more important than before.
Don’t let innovation become tertiary for your stores.
I was speaking to one of the first time exhibitors at the show, and they had mentioned just how hard it was to get a meeting with many of the retailers. Even with strong financial backing, good performance, and an excellent product, the task proved impossible. Brokers, vendors, industry connectors were not successful in making this happen. With additional tasks and more categories added to each category decision maker, one could see why meetings with small and emerging brands would be low priority.
Retailers are in need of perspective with growth brands. Some of these small to mid-size brands will be the strongest growth brands of tomorrow. Look at several of the categories that are stagnant or mature, and look at the largest brands in those categories. In many cases, the largest brands lack the brand license to deviate, disrupt, and innovate in their own category.
In retail, there has to be a balance between growth, shelf space, base sales, and the variety at shelf to reach both growth and profitability goals. Don’t expect growth to come from only large CPGs. Consider brands like Halo Top, LaCroix, and Kind, and categories such as plant-based foods, and kombucha that have truly made impactful growth happen.
In recent months, however, the mood of small and emerging CPG isn’t as positive as in the past, and by all appearances, the scales are tipping away from the disruptors and towards Big CPG.
Retailers should jump on healthy junk food.
While we read report after report on how eating habits and tastes are changing, becoming more international, more sophisticated, healthier, the fact is that mainstream America still loves the traditional American food—hamburgers, pizza, chicken tenders, potato chips, cheesesteak. The size of the prize with mainstream customers is much larger than catering to a smaller segment of natural and organic consumers. Not everyone wants health food, but rather, better choices for the food they love. Below are a few healthier snack products that caught my eye at Expo East. Kudos to these companies for leading the charge to challenge conventional beliefs.
Alpha Foods plant-based burritos
Alpha Foods is offering plant-based burritos with Americanized flavors such as Philly, pizza, and fajita (photo courtesy of their Facebook page)
Smart Flour Snack Bites!
Snack Bites! is a line of healthier pizza rolls made with ancient grains by Smart Flour Foods
The Good Crisp Company
Non-GMO stacked potato crisps by The Good Crisp Company
Smash Crispy Rice Treats
Reinvent an aisle? Refrigerated baby food is everywhere.
If you haven’t seen these yet, you likely will. Baby foods in your dairy set (or in aisle) may be the next craze to take over the store. With the recent addition of John Foraker and Jennifer Garner to the Once Upon A Farm team, there is some serious firepower leadership behind this idea of reinventing the aisle and category. Retailers like Walmart and Kroger are already experimenting with the idea. At Expo, there were several brands on display including versions that were organic, biodynamic, and processed using HPP technology, I am not as bullish as some on this trend in the short term due to the cost of refrigerated space both in-store and in the supply chain, but the category and space is evolving and it’s exciting to see where this might go.
Once Upon A Farm
Pure Spoon pioneered the high-pressure processed baby food category is seeing traction in several national retailers