This time last year, a wholesale grocery partnership could guarantee exposure for emerging CPG brands regardless of category. But with online delivery rising and grocers doubling down on private labelss, does in-store discovery has an expiration date for CPG brands?
In the latest installment of our Ask the Expert series, four CPG leaders shared their predictions for the future of grocery and wholesale partnerships as digital sales expand. They’re anticipating…
- Heritage CPG brands will follow Pepsi into direct sales
- SEO and keyword purchasing will make or break online awareness
- Brands that last in-stores will belong to dominant categories
Read on for their insights.
Responses have been edited for length and clarity.
Aishwarya Iyer, founder & CEO of Brightland
“Scales may shift because of time, global shifts, and unpredictable forces (like Covid-19), but we always view things as a balance. Even with the acceleration of online grocery, we predict that there will still be a plethora of people who will go to stores to discover and purchase products, creating a balanced flywheel between DTC and wholesale.”
Sandro Roco, founder & CEO of Sanzo
“We took the position very early on in the pandemic that new brand discovery in-store would not return quickly, and so we over-indexed on strategies that take place outside of four walls to drive trial. Our investment specifically in our direct-to-consumer business is paying off in a big way as we’re entering retail with partners like Whole Foods and Erewhon and generating high sales velocities that are atypical of a brand as early as ours.”
“From my conversations with other brand owners, the effect has been category-dependent. Certain emerging CPG brands in certain categories are experiencing outsized growth (e.g. sparkling beverages) whereas other categories have been really negatively impacted. In those instances, you’re seeing incumbent CPG brands gain more market share. Given the low margins in online grocery, I imagine there will be added pressure on category buyers to double down on winners and perhaps cut poor performers sooner. IMO, this ultimately means CPG brand owners will have to continue stepping up their game.”
Andrea Hernández, founder of Mood Food Snacks
“We will see the rise of “dark stores” like Amazon, which recently launched their first online only Whole Foods in Brooklyn that will only focus on fulfilling grocery orders made online, and DoorDash, which launched DashMart.”
“On the other hand, we will see a rise in curated shops like Pop Up Grocer that focus more on upcoming food and beverage trends and featuring a curated roster of brands. They don’t subscribe to the concept of a normal grocery shop as they travel across the US and are only in a city for a month. They also launched a ‘mystery snack box’ to bring their curation experience online.”
“Though the DTC route is not a profitable one, most brands will probably have to follow suit in Pepsi’s footsteps as they launched snacks.com and thepantryshop.com. Heinz [is] doing it in the UK as well with Heinz-to-Home. This doesn’t necessarily have to happen all at once, for newer brands it will entail retaining an omnichannel strategy, with a larger focus on e-comm.”
Ayeshah Abuelhiga, founder and CEO of Mason Dixie Foods
“In store discovery has always been a challenge for emerging brands in frozen aisles, so online grocery, with tools including SEO, keyword purchasing, and searchability by product type are a great opportunity for brands like Mason Dixie to boost awareness. We’ve adopted cutting-edge targeted and digital marketing tactics that broaden our presence and optimize our limited spend.
“Instead of hoping for a consumer’s click through to a store locator that might or might not result in a sale, we can push shopper click through to complete a purchase on a retailer’s online ordering site. And an emerging brand’s buck is well spent messaging on a busy online grocery site.”