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White Paper: DTC for CPG Brands

Why it’s time to use DTC to establish a first-party data strategy to increase your CPG Brands brand’s relevance.

Learn why food, beverage, and wellness brands are rethinking their DTC strategies to include consumer insights. As CPG Businesses have come to DTC marketing’s new frontier many leaders are looking to answer critical questions about their brand’s medium and long term viability. Key business areas of concern include:

  • Lost brand relevance due to marketplace disruption
  • Competitive pricing strategies vs. brand value
  • When the DTC bubble will burst in the new normal brought about by Covid-19

By switching to a brand-driven first-party data strategy, better-for-you brand owners are future-proofing their business and retooling for growth.

Download this white paper to learn how to:

  • Identify entrepreneurial cognitive bias and develop strategies to break out
  • Reduce reliance on pantry stocking and plan for two-way relationships with consumers
  • Reduce the risk of commoditization by leveraging first-party data to elevate brand purpose

Get this exclusive report brought to you by Retail Voodoo, the branding firm that has helped KIND, Essentia, LesserEvil, Wedderspoon, PCC Natural Markets, REI, and Starbucks build brand-driven strategies that create meaningful, sustained growth.

David Lemley

David was two decades into a design career with a wall full of shiny awards and a portfolio of clients including Nordstrom, Starbucks, Nintendo, and REI. His rocket trajectory veered when his oldest child faced a health challenge of indeterminate origin. Hundreds of research hours later, David identified food allergy as the issue and convinced skeptical medical professionals caring for his child. Since that experience, David and Retail Voodoo have been on a mission to create a cleaner, healthier, more sustainable food system for all.

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White Paper: Navigating Brand Disruption

Covid Series: Vol 01

Why it’s time to develop a brand-driven strategy to future-proof your brand.

Learn why food, beverage, and wellness brands are rethinking their fragmented strategies that hinder their marketplace performance in the face of unexpected disruption.

Businesses who are relying on the four P’s of marketing are especially subject to disruptions in the age of Covid.

By switching to a brand-driven strategy, better-for-you brand owners are future-proofing their business and retooling for growth.

Download this white paper to learn how to:

  • Plan for distribution hiccups and eliminate lost opportunities.
  • Reduce ingredient dependence in favor of brand-driven benefits.
  • Outpace copycat competitors by delivering on brand purpose.
David Lemley

David was two decades into a design career with a wall full of shiny awards and a portfolio of clients including Nordstrom, Starbucks, Nintendo, and REI. His rocket trajectory veered when his oldest child faced a health challenge of indeterminate origin. Hundreds of research hours later, David identified food allergy as the issue and convinced skeptical medical professionals caring for his child. Since that experience, David and Retail Voodoo have been on a mission to create a cleaner, healthier, more sustainable food system for all.

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How to Navigate Brand Change, When Your Sales or Operations Team Dominate the Conversation

Some of the organizations we work with are veritable marketing machines, built on the strategic thinking and specialized discipline that drive modern better-for-you brands.

Others are operations- or sales-centric, focused on chasing opportunity and ROI. Not that there’s anything wrong with either, of course. But in ops- or sales-driven corporate cultures, marketing takes a backseat, which means that the brand and the consumer often do, too.

If you’re a marketing leader with one of those companies, you and your team likely feel like order-takers, consigned to producing yet another sales brochure or tradeshow booth. You may lack the influence to pursue a comprehensive brand strategy. And your management peers probably don’t value the thinking you bring to the table (if you’re at the table at all).

When Brands Lack Marketing Discipline

In our experience, it’s easy to spot BFY brands that don’t place what we consider the proper amount of emphasis on marketing. Some of these companies were founded by process-minded entrepreneurs who thrive on the challenge of making a product, without worrying about how to build an audience around it. Some brands start out with a focus on building a wholesale business and are unconcerned about the end consumer. Organizationally, some companies bolt marketing onto another department, like HR and communications. Some brands are led by “numbers people” who don’t bother with “soft” disciplines like marketing.

In organizations where so much of the business rests upon sales or operations, the marketing team just produces what sales team needs. Rather than working as strategic partners, marketers are stuck in reaction mode: strategically underutilized, demoralized, and overtasked with chores that don’t move the needle.

But then, something in the business changes. A wholesale-only brand shifts to a consumer model or launches a companion consumer brand, or a company starts selling direct-to-consumers. These shifts require a strategic marketing approach, and if management doesn’t understand or value marketing, the battle to build a consumer audience is long and uphill.

If marketing doesn’t have a seat at the table when the business climate pivots, there’s a risk that the brand goes “rogue,” speaking in different ways about different things to different audiences. The brand loses internal and external relevance. Sales stagnate and growth is stymied. There’s a significant loss of potential, and the brand won’t fulfill its destiny.

How Marketing Leaders Can Gain Influence

If you’re a marketing executive in a company that doesn’t emphasize the discipline, or if your organization is facing a shift that makes your work more important and visible then it’s previously been, we can offer several suggestions for how you can gain influence.

First, start with the end in mind, instead of only the next step. So, for example, if you’re working toward a financial target, look at that, not at what your first sale will be. If you need to build an audience, do the research to identify and understand that audience. If you’re starting a consumer marketing strategy, look at what we call the Brand Ecosystem (seven essential communication platforms) as a whole, not just one tactic; like building a social media campaign.

Second, consolidate opportunistic and strategic needs as much as you can. If the sales manager asks for a new section of the website to communicate to a key retail account, can you also deploy resources to build out the consumer side? Can you use project requests as opportunities to do broader research? This approach to building influence and understanding of marketing involves “Yes, and …” conversations. Rather than declining a project request from the sales team, say, “Yes we can help you, and of the five things you’re asking for, here are two key projects that best mesh with our brand strategy.”

Develop the art of reflective listening. This tactic has proven highly effective whenever we encounter client organizations that distrust or devalue marketing. We teach our partners to use internal stakeholders’ own language when they talk about marketing solutions. When we gather all the client’s department heads, we model how the marketing leader can communicate to her peers in a way that makes them feel heard.

Wrap your conversations with other business leaders in strategic language. Always be talking about how and what other departments are doing and how they fit into the brand strategy. Gaining influence in an organization is like parenting a small child — you have to fold each interaction into a larger goal. Acknowledge their needs and start to bend their requests to your larger objectives. The more they feel you’re an ally and the more you use their input, the more they’ll feel like they’re being heard. Give them guidance on strategic thinking without cluing them into the lesson.

Enroll a small number of key people in strategy conversations. Enlist influencers within the corporate culture to advance your brand initiatives instead of hosting an “all-hands” meeting where egos will take over and the group is harder to corral.

It’s an eternal struggle for marketers to prove ROI on their work, but to the extent that you can, try to quantify your team’s impact. Beginning every project by setting goals and metrics that will define success is essential, especially as you’re building influence. At the end of programs or campaigns, recap goals and planning conversations so that you can point to outcomes. You’ll further advance your cause if you admit when you’re wrong and an initiative didn’t perform as you’d expected.

Finally, enlist your entire team in building a reputation for marketing in your organization. Set your own private agenda for every meeting with internal clients and stakeholders to make sure they feel heard and supported. Advancing the cause of marketing is all about managing up and around you.

If you’re seeking an outside partner who can advance your marketing agenda and spark growth for your brand, we’re here to help. Just drop us a line.

David Lemley

David was two decades into a design career with a wall full of shiny awards and a portfolio of clients including Nordstrom, Starbucks, Nintendo, and REI. His rocket trajectory veered when his oldest child faced a health challenge of indeterminate origin. Hundreds of research hours later, David identified food allergy as the issue and convinced skeptical medical professionals caring for his child. Since that experience, David and Retail Voodoo have been on a mission to create a cleaner, healthier, more sustainable food system for all.

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Doing Brand Strategy: When Can You Delay, When Must You Act?

Marketing is a discipline of campaigns and deployment and deadlines, so it’s easy to get caught in the swirl of urgency and lose sight of what’s important. The world moves fast for better-for-you brands, especially emerging ones, so leadership tends to bypass one of the most important tasks: building a strong strategic foundation for the brand.

Brand strategy is essential, but it’s also time- and resource-consuming, so marketers and executives stick it on the back burner while they focus on urgent needs like distribution and promotion.

Understanding Urgent vs. Important Opportunities for Brand Strategy

Perhaps you’ve heard of the Eisenhower Principle: President Dwight Eisenhower said, “I have two kinds of problems: the urgent and the important. The urgent are not important, and the important are never urgent.” Eisenhower organized his time by focusing on tasks that were important, not just urgent.

In business, you’ve probably seen this concept translated into a decision-making matrix, where the X axis goes from urgent to not urgent, and the Y axis moves from important to not important.

It’s our position that brand strategy is the most important initiative a BFY brand can undertake, because it underpins every marketing effort in the Brand Ecosystem.

But in specific situations, it’s less urgent for some brands. So let’s take a look at the instances when leaders can “kick the can down the road” and delay the intensive work of brand strategy. (But take note: You can’t survive indefinitely without defining your brand’s true mission, passion, purpose, persona, and tribe.)

You Can Delay Brand Strategy If …

1) You are a new-ish or startup brand and have a sales goal or financial benchmark that you need to hit in the very near term. If you don’t have a brand strategy in place, you can get by for a time by being scrappy and opportunistic. Your brand’s position in the market may yet be undefined and your sales team may be lean or unstructured, but you can chase any old opportunity that promises revenue. In the future, a strong brand strategy may necessarily close the door to some of those opportunities — those that don’t coalesce with the brand’s ethos. Without strategy, opportunity represents possibility; strategy can narrow your lane and shave off opportunity, but for now, you can reach for all the brass rings.

One caveat: Chasing every opportunity means your brand will be diffuse and distracted, which sows confusion for consumers and creates lack of focus for your team.

2) You’re content to be under another brand’s umbrella. A great example of this is BarkBox (or any of the -Box brands, which aggregate other branded products and auto-ship them to subscribers). This subsidiary positioning does nothing to build your own brand, really, but it generates plenty of revenue so you can sleep at night.

One caveat: If you aspire to a Beloved & Dominant position, you’ll have to define your own brand and bring it out from under the umbrella.

3) You’re a huge company with bottomless funding. Deep-pocketed BFY brands can let the market leaders take the hits — defining new audiences, innovating new products, shaping a category — and you can follow later. You’re big enough to compete on price or placement or promotion, so you can delay the work of deep strategy for a while.

One caveat: Without a brand strategy driving your business strategy, kicking the can will come back to you; whether it’s in a quarter or a year depends on how good a punter you are.

You Cannot Delay Brand Strategy When …

1) Your competitors are eating your lunch. Sales erosion over any meaningful reporting cycle, (back-to-back quarters or back-to-back years) moves brand strategy from important/not urgent to important/urgent. It may be easy for brand leadership to point to an identifiable reason for the drop-off: a lull in production or distribution, for example. Ultimately, though, it’s a strategy problem. When consumers are becoming your non-customers, it will kill your brand.

2) Your sales team and marketing team are misaligned on how to grow. Without a defined brand strategy, you’ll spend more money and continue to invest in marketing tactics and relationships and channels that won’t deliver the results you need or expect. Strategy facilitates business planning, because it identifies the right kinds of opportunities. Everyone understands what the brand stands for.

3) Consumers are flat-out asking for new products or a new direction from your brand. They may be reaching out to you directly via social channels, or cultural trends may be pointing to an obvious direction, or perhaps it’s showing up as softening sales as consumers elect others instead of your products. Regardless, you’re not seeing it. But a brand strategy will make these consumer-driven shifts or pivots totally obvious.

Know that any delay — intentional or not — in developing a brand strategy will catch up to you. The pain you feel from the delay may be chronic and slow to build, but once it becomes acute, the symptoms will be dire and you’ll scramble to apply bandages and duct tape to keep the business from falling apart.

What’s more, lack of brand strategy means that when a big opportunity arises, you can’t press the gas and go. You’ll have to spend six months to a year to figure out what it will do to your business and whether it’s the right path. Strategy dictates whether an opportunity is a good fit or not, and it allows you to pursue it on your own terms. It may not be urgent now, but brand strategy sure is important. So make the time to do it right.

David Lemley

David was two decades into a design career with a wall full of shiny awards and a portfolio of clients including Nordstrom, Starbucks, Nintendo, and REI. His rocket trajectory veered when his oldest child faced a health challenge of indeterminate origin. Hundreds of research hours later, David identified food allergy as the issue and convinced skeptical medical professionals caring for his child. Since that experience, David and Retail Voodoo have been on a mission to create a cleaner, healthier, more sustainable food system for all.

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Confessions of a Marketer Podcast: Marketing Starbucks (2 of 2)

Featuring David Lemley

On Episode 98, David Lemley is back to continue our chat about retail marketing. This time we focus on his time early on at Starbucks, which taught him a lot. He takes that education with him today to help him current client roster. There are some valuable lessons in David’s story—plus he gives us a look at the future.

Listen on Confessions of a Marketer

David Lemley

David was two decades into a design career with a wall full of shiny awards and a portfolio of clients including Nordstrom, Starbucks, Nintendo, and REI. His rocket trajectory veered when his oldest child faced a health challenge of indeterminate origin. Hundreds of research hours later, David identified food allergy as the issue and convinced skeptical medical professionals caring for his child. Since that experience, David and Retail Voodoo have been on a mission to create a cleaner, healthier, more sustainable food system for all.

Connect with David
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6 Signs Your Brand is Ready for Change (Plus 3 Questions to Ask Yourself)

Your company’s leadership is clamoring for growth. So your marketing team proposes an endless array of “fixes” — you tweak your social media strategy, try a new online advertising campaign, and chase after a new audience of potential customers.

Your team’s wheels are spinning and you’re trying a bunch of “cool new stuff,” but it’s not really driving the sales spike that executives are seeking. You’re not sure that it’s working yourself. No one can agree on what smart growth looks like, so your organization lacks a real strategy to get there.

Marketing teams are usually bullish on initiatives like outreach on Instagram and Facebook; these projects deliver an infusion of creative energy and a sense of checking off the to-do list. But without clarity and connection back to the core brand strategy, incremental projects like these are bound to deliver only incremental results. And without a solid strategy in place, you risk getting noticed for the wrong reasons, as when a social campaign tries to be clever and strays off-brand.

6 Brand Signals That It’s Time to Embrace Big Change

Is your brand ready for a change? A change that’s more impactful than being clever on Facebook? How do you know?

Here are six signs your brand is ready for a foundational change:

1) Your sales team is not in alignment on how to sell your brand in to retailers. On a small- to medium-sized sales team, everybody has hacked the sales toolkit to fit their individual preferences. One rep may be most interested in showing up with the lowest price, while another is personally vested in building relationships with retail buyers. When they try to cross-pollinate, they fight and as a result don’t collaborate unless they have to go to a sales meeting.

One of our favorite exercises when we consult with a brand that’s struggling to grow is to bring the sales team into brand strategy sessions with the C-suite. The sales team grumbles, “What does branding have to do with sales? Why are we here?” As we talk about the brand vision, the salespeople start to open up about what they’re hearing from the market, what the brand means, and how to clarify its expression. They want to help create the solution, and by the end of the meeting they won’t shut up.

2) Your leadership team is demanding new growth and new opportunities. You may try to fix what’s ailing the brand yourself, relying on your internal team’s overconfidence and institutional biases. Doing what you know feels safe and predictable. But if you’re aiming to generate big gains, you have to recognize that what got you here won’t get you to the next level. More of the same thinking won’t solve your business problem.

Real growth comes from building a brand strategy that changes the conversation your brand is having with your employees, your buyers, and your consumers. (Hint: It needs to be about them and how you fit in to their lives, not about how great you are.)

3) You are losing shelf space and/or feeling pressure to play on price. Velocity is important to retailers; they don’t make money if your products are just sitting there on shelf. And if they can drive more volume and make more money by developing a private-label knockoff of your product, they will.

If your brand doesn’t represent something meaningfully different than cheaper competitors, you’ll lose the pricing game. You have to create a brand that’s believable to the whole organization, including your retail partners.

4) Consumer preferences have changed. Diet trends, health and wellness preferences, sustainability concerns, etc., have swept a whole new group of products into your space, and you haven’t kept up. You may be tempted to quickly develop a new product to hit the latest trend, infusing your energy bar with chia, for example. But understand that your brand must stand for more than an ingredient or nutritional attribute.

Our client Russell Stover risked becoming obsolete as consumers started to value artisan-made, fair-trade, dark chocolate. This beloved brand didn’t recognize that these attributes aren’t just trends but actually long-term attitudinal changes. We reframed their brand position to focus on a little-known aspect: Russell Stover chocolates are all handmade and always have been. We helped them re-establish their connection with consumers.

If you’re playing in a category that’s seeing radical shifts due to rapidly changing consumer tastes, resist the urge to tweak your product formulation and instead pursue strategic innovation that’s founded on your core brand principles.

5) You were first to market with something lovely and unique. But now there are many competing products and brands. Consumers who love you don’t buy you with as much frequency.
Look at a subset of the snack category: puffs. Frito-Lay owned the puff segment, and then a few small better-for-you brands entered the market with paleo and vegan and alternative grain varieties. Seeing this explosion of BFY puffs, Frito-Lay jumped on the opportunity with Simply Cheetos. So now there are a ton of BFY brands plus a behemoth brand in the category.

You have to stand for something and taste amazing and compete on the shelf against a well-funded major player. Otherwise you’ll go from being a category of one to being in someone’s consideration set to … not being different in any meaningful way.


6) Your team has been s-l-o-w to respond to modern life and now your brand looks and sounds geriatric.
Perhaps your sales, marketing, and executive teams include people who’ve been with the company for a decade-plus and who say to themselves, “We check all the boxes, why aren’t consumers listening?”

At the same time, you’re dealing with retail buyers who have mandates of their own, and even though you’ve been on the shelf for 10 years, your brand is now at risk of being discontinued because you’re not keeping up. Armed with tons of data, today’s retail managers have brands on a short leash. It’s time to change or face obsolescence.

3 Questions to Ask if Change is Inevitable

If one or more of the above change-indicator lights are flashing for your brand, here are three questions to ask yourself to inform the next steps:

What is your assessment of the internal team?

Are they ready to do what’s necessary to evolve the brand, or are you going to have to make staffing changes?

How bad is it?

When do you need to have a solution in place? Six months? A year? Can you wait for results? With the right help, you can rush to get a brand relaunched in six to eight months, but it takes up to two years to see traction.

Have you budgeted for this?

Understand that you’ll need to allocate funding to develop the new brand plan and then to execute it. We generally advise clients to expect a multiplier of at least 1X and up to 6X in the first year to roll out the rebrand, particularly when the initiative expands beyond marketing and into product development or operations.

Renovating an existing brand — so that it retains loyalists and attracts new fans — takes more than a clever social media campaign. Are the signs pointing you toward significant change for your brand? Let us guide you to growth.

Diana Fryc

For Diana, a fierce determination to pursue what’s right is rooted in her DNA. The daughter of parents who endured unimaginable hardship before emigrating from Eastern Europe to the U.S., she is built for a higher purpose. Starting with an experience working with Jane Goodall to source sustainably made paper, she went on to a career helping Corporate America normalize the use of environmentally responsible products and materials before coming to Retail Voodoo.

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Better-For-You Brands: Good is Not Enough

If you’re the leader of a better-for-you brand, take a look at the products surrounding yours on the shelf next time you go to your top retail outlet. All those products are making the same “better” claims that you make. Your commitment to environmental sustainability, your community engagement, and your ethical sourcing practices are not differentiators in an era where young consumers expect all these attributes in all the brands they favor.

Just as a sexy ingredient does not constitute a brand, a triple-bottom-line position is not a brand. Being good is no longer good enough.

We recognize that this sounds like a contradictory statement coming from us, given our passion for working with brands that make a difference in the world. So let’s unpack this idea.

Good Is No Longer a Differentiator

A brand that staked its claim on clean/whole/organic ingredients, or the raw or paleo or vegan lifestyle, used to be radically different. But in today’s world, now that multi-nationals are scooping up darling BFY brands, these are all more like product attributes than brand drivers.

Consumers are ever more concerned about the food they eat and knowledgeable about dietary trends and healthy ingredients. And it’s not just sophisticated, well-to-do shoppers on the coasts; consumers of all stripes are paying attention. So while that organic, non-GMO, palm-oil-free loaf of bread may once have enjoyed cult status among BFY devotees, now many mass brands have adopted the same characteristics because consumers are demanding that they do. And today’s product attributes that seem like radical differentiators will be tomorrow’s product attributes-du-jour.

We see plenty of brands that are doubling down on checking the boxes of BFY — quality product, clean manufacturing, environmental stewardship — thinking that’s enough of a brand platform. But there’s too much competition to play that game anymore.

We often engage with brands whose focus on attributes (like ingredients or “free from” claims) have backed them into a corner. They have limited potential for innovation and growth. We coach them to go back to the “why.” Why the brand was founded? What does it stand for? What wrong does it right in the world?

Yes, you have to continue talking to the market about your BFY traits, but you have to represent more than that.

Brands Anchored to a Cause are Self-Limiting

In addition to ingredient and nutritional profiles, we see BFY brands that have aligned themselves with a narrow cause struggle to grow. Why? That good cause may not be for everyone.

A brand’s purpose can also be an attribute. Doing good in the world is a component of a brand, not the entirety of the brand. You have to step back and be able to look at the business from a 30,000 foot level to recognize if the cause you’ve embraced pitches a big enough tent for your brand to grow beyond initial believers. Too, the cause has to make sense with the product. If you’re a cookie brand talking about saving the rhinos, you’re asking shoppers to stretch to make the connection. What does rhino habitat have to do with your ingredients or your sourcing? Are you just donating part of sales? What’s the connection? Folks who don’t care about the rhinos won’t gravitate toward — or pay more for — your cookies.

Consider Toms Shoes: The brand’s “buy one, give one” ethos is a great catalyst for success, generating terrific PR and appealing to young, conscientious consumers. But beyond that, the shoes are attractive and fun, super comfortable, affordably priced, and widely available in lots of retail channels. Accessibility can be a hurdle for BFY niche brands, both figuratively and literally. Toms figured out how to marry its mission with a product and price point that’s accessible to a broad audience.

Don’t Pursue Good at the Expense of Smart

Here’s what Toms has figured out: How to start a conversation with consumers around a cause while selling them well-priced, comfy shoes that come in a bunch of colors. Toms hasn’t sacrificed business strategy — product, price, and placement — for its good cause.

In the early days of marketing as a discipline, practitioners focused on the “4Ps of Marketing” — Product, Price, Place, Promotion. That is: what the item is, how much it costs, where it’s sold, and how it’s advertised.

We have posited a new way of thinking about marketing in the BFY era: Purpose, People, Planet, Passion, Personality, Profit. In other words, the brand’s mission, its dedication to employees and community, its commitment to sustainability, the enthusiasm and energy with which it pursues its mission, the personality of the founder, and, of course, its bottom line.

As we guide brands we work with to find their 6Ps, we remind them not to lose sight of the foundational elements of marketing. Absolutely, embrace a higher calling. But don’t overlook the basics of running the business as you’re chasing the mission. Because in the end, if you’re not in business, you can’t pursue the mission. Ultimately, the consumer, the planet, your employees, and whatever else you advocate, loses.

Need help finding the balance between doing good and achieving success? We’re here to help you.

David Lemley

David was two decades into a design career with a wall full of shiny awards and a portfolio of clients including Nordstrom, Starbucks, Nintendo, and REI. His rocket trajectory veered when his oldest child faced a health challenge of indeterminate origin. Hundreds of research hours later, David identified food allergy as the issue and convinced skeptical medical professionals caring for his child. Since that experience, David and Retail Voodoo have been on a mission to create a cleaner, healthier, more sustainable food system for all.

Connect with David
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Strategies for Reinventing Ingredient-Centric Brands

Every new diet trend spurs a slew of new products and brands. Paleo begat jerky; Whole30 begat plant-based milk alternatives; Atkins begat coconut oil. Fad ingredients do the same — yesterday it was kale and chia; today it’s CBD.

But building a brand around the latest ingredient or diet, as though that “thing” is what will catapult the brand to success, is a perilous path. At some point, the market will become saturated with products, and the brands that don’t stand for anything else face a choice to pivot or die.

Ingredient Brands Have Little Room to Innovate

It’s not difficult to find examples of ingredient brands; just look at Oatly. Love from baristas who use the product has helped the brand secure cult status, but for how long? Califia Farms, by contrast, has built a well-loved brand on plant-based milks, coffee beverages, and creamers. Califia is now taking pre-orders on its new oat milk. It’s not hard to envision that Califia’s oat milk will be a hit with consumers. Califia has painted with a broad enough brush that allows ample room for innovation, while Oatly has staked its brand on a single ingredient.

That’s the foundational problem of ingredient brands. They get hamstrung by the fad that led them to become a brand to begin with and can’t innovate beyond it. If you’re the kale chip company, you can’t make potato chips. You can’t even make kale pesto.

This innovation limitation means you’re stuck when competitors, eyeing the same fad, flood the market with similar products. In the beginning, your brand may have been one of a few; 18 months later, store shelves are awash in copycats, differentiated only by price.

Risks of Anchoring Brand to Ingredient

Your brand is not your ingredients, features, and benefits; it’s not even your product. Your brand is a promise and the way in which your company keeps it. Ingredients are just part of the equation.

In the better-for-you food and beverage space, companies run by passionate founder/owners are particularly susceptible to this ingredient-equals-brand thinking. The owners often can’t see beyond the the initial product — one they doggedly developed in order to meet a need they felt personally. They’re comfortable anchoring the brand to, say, chia, because they can’t imagine a future with 100 SKUs.

Positioning your brand on features (ingredients) and benefits (flavor, nutrition) is riskier than ever because trends come and go more quickly than ever. We live in a world where consumers are open to new ideas, where technology makes it easy for people to discover something and to share it with others, and where social currency depends on being in the know.

How to Expand Brand Beyond Product

If your brand identity is anchored to product instead of promise, consider these strategies:

Understand why the trend exists. Among today’s food trends, CBD stands out as a food and beverage darling. Rather than pegging your brand to CBD — or whatever comes along tomorrow — lock into the driver behind the trend. CBD has properties that consumers are excited about, like relaxation or pain relief or anti-anxiety; let those broader consumer preferences steer your brand innovation process.

Here’s an example: At a recent food industry trade show, I was surprised to find Bush Brothers, the bean brand, pitching a whole line of products for tailgating, including chips and dips. After all, what do you make with beans? Chili. Chili is a tailgating staple. And extending the brand into other pre-game foods taps into the trend of epicurean tailgating. I bet consumers will make the leap.

Pull back the lens. If you’re an ingredient brand, what do you see when you zoom out? Can the brand’s equity be elevated to a higher level in a way that makes sense for your market, with the existing brand as one of a set of products?

Consider Brad’s Kale Chips — the name itself anchored the brand to both ingredient (kale) and product (chips). So what happens when kale is no longer a thing? Even with flavor variations, kale would only take the brand so far, and the word ‘chips’ meant they couldn’t even pivot into kale hummus. The company recently repositioned as Brad’s Plant Based with a new line of veggie chips and an updated mantra, “Snack with purpose.”

Go back to the why. Why was the company founded? What is your brand’s ideology? The wrong you exist to right? What do you stand for?

Living Intentions is a case in point. This brand had built a great reputation as the frontrunner of shelf-stable raw and sprouted foods. But when Whole Foods decided that “raw” was a product attribute, not an entire in-store category, Living Intentions faced real jeopardy. The brand was focused on a food trend, not on attributes it could own.

We worked with their leadership team to get back to the why. The owner founded the company in order to produce healthy, natural foods that he could eat as he pursued his favorite outdoor activities. So we repositioned the brand on the idea of “activated” food — a reference both to the raw, active ingredients and to physical activity — and shifted the brand conversation from the product to the lifestyle it enables.

Plan for transition. The brand may be on life support, and you’re faced with tough choices. So begin forecasting for when and how you’re going to transition, either by growing as big as you can as an ingredient brand and selling or by pivoting to a broader focus.

If you’re an ingredient brand seeking a way out of the box you’re locked into, look to what you stand for. You don’t really need to search that hard. And you will know you’ve got it right when you can innovate easily.

Diana Fryc

For Diana, a fierce determination to pursue what’s right is rooted in her DNA. The daughter of parents who endured unimaginable hardship before emigrating from Eastern Europe to the U.S., she is built for a higher purpose. Starting with an experience working with Jane Goodall to source sustainably made paper, she went on to a career helping Corporate America normalize the use of environmentally responsible products and materials before coming to Retail Voodoo.

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Your Brand is on Life Support. What Now?

When a brand has backed itself into a corner in consumers’ minds, often the internal team is the last to wake up and smell the coffee.

It’s painful to realize that the brand has been disrupted by changing marketplace conditions, that competitors have taken root, that buyers have moved on. At that point, there may no longer be a way for the brand to keep the promises it once stood for.

So it’s time for the marketing team and company leadership to collectively recognize what’s happening and why — and to chart a path forward.

How to Recognize the Symptoms of a Dying Brand

We’ve counseled troubled brands, and they come to us with any number of problems: loss of market share, loss of shelf space, loss of confidence from retail buyers and consumers, pricing pressure, commoditization, private label knock-offs, and more. The common denominator of these challenges is that consumers have found a product that’s new and trendy, or cheaper, or better suited to their lives, or more aligned with their values. The brand isn’t relevant anymore.

It’s easy to recognize the key factors contributing to the brand’s demise. Maybe it has been slow to respond to changing marketplace conditions, like new sales channels and shifts in the ways consumers find and purchase its products. New, better-funded, well-organized, or just hungrier competitors have entered the market. Perhaps the brand team has flat-out missed the evolving consumer preferences and lifestyle megatrends that changed perception of the brand. Or the leadership team is simply stuck — or arrogant — and unable to change with the times.

Do any of these scenarios feel familiar to you, perhaps painfully so?

You’re not alone. We find that marketing executives are often the first to recognize the symptoms. You see the signs because your job depends on watching the market and deeply understanding how consumers engage with your brand. While your ownership may not be paying attention to those details, you see the evidence first, and you know its implications.

What Marketers Can Do About Challenged Brands

This is a hard position to be in. You recognize what’s happening, fear the repercussions that may be coming your way, and worry about what’s next.

When a CMO of a troubled brand comes to us for help, she’s facing a very short window in which to execute a radical fix. The marketing staff is usually in disarray. And she’s also the bearer of bad news to the rest of the C-suite.

Having that conversation with your founder/owner and leadership team can be brutal. We get it: You’ve built relationships with these colleagues, you’ve talked about fears and dreams and ambitions, you’ve shared victories. Telling them, in as frank and loving terms as possible, that the ship is going down and that drastic measures are needed can be an abrupt wake-up call that they don’t want to hear. Your owner is likely to be embarrassed and deeply skeptical, because the business isn’t just business for him; it’s personal.

Because of those connections to each other and to the product, we know that your leadership has lost perspective, making it difficult for you to identify a cure for the illness plaguing your brand. We can bring that outside, neutral point of view to finding the right prescription.

It’s essential to be as objective and data-driven as possible when dealing with a lagging brand. Several years ago, we worked with a troubled, family-owned founder/owner retail company that sold a majority stake to a private equity firm. The newly installed president came to us for guidance because a competitor was unraveling their business. We presented data that made an irrefutable case for rebranding the company, overcoming internal resistance, and mapping a path to future growth. You have to use data in order to gain buy-in to create radical change.

Two Potential Outcomes for Lagging Brands

If the company is truly out of options and the founder is ready to get out, then the logical option may be to close or sell at a deep discount to an investor willing to fund significant changes to the business. It takes a lot of character to admit it’s time to move on.

But not every ill brand must die; it’s possible to build something new out of the ashes. Here’s an example: Not long ago, we worked with an ingredient company that sold both directly to consumers and to food manufacturers. Commoditization of its core product had caused significant loss in total revenue, and when we stepped in, the business and the brand were running on fumes.

We gathered tons of data and conducted interviews with leaders and trusted external partners to identify the brand’s deep DNA. We held an innovation workshop and showed them where their capabilities and passion and expertise could get them — opening their eyes to new possibilities. We killed the old brand and established a new holding company with two new independent units (one B2C and one B2B) and related brands. In this case, the best option was to reboot rather than close or sell.

As you’re considering a way forward for your troubled brand, know that it will take unwavering commitment from your leadership team. In the throes of reinvention, we find that executives are prone to second-guessing and foot-dragging. We’ll make sure you stay on track. We can help your team understand your brand’s place in a shifting market, identify the best outcome, and then use data as a compass to find the way forward.

David Lemley

David was two decades into a design career with a wall full of shiny awards and a portfolio of clients including Nordstrom, Starbucks, Nintendo, and REI. His rocket trajectory veered when his oldest child faced a health challenge of indeterminate origin. Hundreds of research hours later, David identified food allergy as the issue and convinced skeptical medical professionals caring for his child. Since that experience, David and Retail Voodoo have been on a mission to create a cleaner, healthier, more sustainable food system for all.

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Founder Fears Associated with Private Equity and Acquisitions

Better-for-you food and beverage has become the investment world’s industry darling. And with good reason. All but the most resistant non-believer understands that what we eat and drink and do to stay active have a direct impact on our health.

Combine this with the pace of change that technology affords entrepreneurial business, combined with the appetite for change of the typical technology-minded investor and it is just too fast for most incumbent brands. That’s why the longstanding practice of big companies buying startups to help them stay relevant is in high gear. And there’s no reason your company can’t be one their acquisitions and tomorrow’s breakout brand.

This white paper discusses a set of often unspoken expectations that minority investors, would-be acquirers and founder-owners need one another to understand in order to help you avoid getting swallowed up by anxiety.

The white-hot world of better-for-you food and beverage has more players from the equity world looking to get in before “old guard food brands” can discover the next rising star. A lot of these new players are holding companies and tech investors looking for a way to transition from Silicon Valley thinking to something more holistic.

This better-for-you flurry has got a strong head of steam. According to foodbusinessnews.net, the number of food investors has doubled in the last 5 years. Food has so much interest that its seems as though food & beverage investments now outnumber technology investments.

But this capital-infused high comes with its own challenges.

Food & Beverage Brands’ Key Investment Players

The tech investors tend to make their money by pushing people and systems to the edge. They are not accustomed to being in the people business and, sometimes, can have the attitude of disposable people and disposable relationships. Tech investors love ABC’s Shark Tank and sometimes fancy themselves as the sharks (and that is okay as long as the brand’s founder is aware).

Founders create a gem of a brand with their own tears, blood, and sweat. They live and breathe their company culture (even if it’s bad). So, while they are looking for capital to grow their organization, they are often reluctant to bring in partners who have a track record of being heavy-handed in operations, equipment, HR, and, well anything other than sales, marketing, and funding. This isn’t because the founders don’t understand these key areas as being critical to building meaningful, operationally significant brand systems. It’s more primal that that. Many founders, when faced with the specter of an investor putting multi-expert-hands in their proverbial pie, simply recoil. It makes many of founder-owners feel that potential equity partner or investor is only about growth at all costs — and when they don’t talk openly, the relationship is bound for the therapist’s couch (at best).

To work through this, the founder needs to ask questions of the core acquisition team and talk to other brands in their past and current portfolio. This is the only way to discover if the investor’s normal mode of growing an acquisition fits well with the culture of the current brand.

What Investors Need To Understand About Founders

Food and beverage brand creators are running on emotion and will likely question their gut instinct in the face of investor bravado.

Once contractually together, investors will often push for changes that the founder owner hadn’t anticipated. This can be resolved during the due diligence phase if the founder owner can look at and ask the following important (and often undervalued) question. Will my new partners possess and behave with the same moral compass that we used to build this business?

Food & beverage founders face a common set of fears when seeking investors.

  1. Founders fear that the industry may perceive them as a sell-out, especially if the acquiring entity and/or investor do not allow the brand to continue with the moral compass they created.
  2. Founders are weary that the earn-out portion of the deal may remain unattainable if the acquiring company’s pro forma is merely lip service in an attempt to calm the their nerves. The founder is concerned that the EBIDTA demands of the acquiring entity will put pressure in places inside the organization that will change the company’s stance on ingredients, sustainability, and hard-earned business relationships. So, in a worst case scenario, the founder could be labeled a sell out, not get paid, and be seen in the industry as having been bamboozled by people with deep pockets and a shallow conscience.
  3. They are not gonna “get” me, and I will be stuck reporting to a room of accountants and analysts who don’t believe in the brand beyond the balance sheet.

Investor Types: Which Is Best For Founder-Owners?

As a founder owner of a food & beverage brand, you will sleep better if you know and understand your would-be acquirer’s investment strategy. Are they looking for quick flips? Will they invest strategically in building the company out the way you envision or will they default to a specific point of view once the deal is inked?

Here is a simplified view of common equity partner philosophies.

  1. Moonshot investors think like Google and Apple. These investors buy a bunch of thought-leading brands and let them fight it out in the court of public opinion, believing that, eventually, one of them will be amazing and a must-have for everyone. The other brands are left to languish, fight for resources and ultimately go away. After all, there can only be one Siri.
  2. Spendthrift investors search for brands in distress so that they can acquire them at a bargain. Hostess and Necco Wafers and are great examples that happen to share the same acquiring investor. Roundhill Investments has made a name for itself by acquiring and growing nostalgic brands that have fallen out of fashion with consumers. Hostess is well on its way, It will be fun to see what they can do with the beloved Necco brand.
  3. Aggregator investors are looking for ways to make their marquee brand better. This is great if you have an ingredient-focused brand, or have  product that is more than the sum total of its ingredients. But it gets risky if you think you have a consumer-facing brand but are making most of your revenue in bulk or private label.
  4. Shepherd investors look for brands they can guide to greatness. As conventional food companies see more consumers choosing innovative natural, organic, and better-for-you products over legacy brands, they are seeking ways to meet that demand from acquisition to early-stage investments, and they have demonstrated a willingness to pay high multiples. These conventional food organizations are best suited to make acquisitions like Hormel (acquiring Applegate) and WhiteWave foods (acquiring Vega).

Obviously the best kind of equity partner for a founder-owner who wants to stay involved is the shepherd investor. But how does a founder-owner determine precisely what kind of investor they are talking to?

We recommend having a list of prepared questions about their business practices and their past wins and losses (as well as references from both). Here is starter question to ask a potential investor:

In the last three years, what has changed the most in our industry?

They should be able to speak candidly about the changing nature of consumers, the evolution of their preferences and behaviors, and connect these insights to your brand.

Many other situationally appropriate questions can be formed through a meaningful SWOT analysis prior to getting into due-diligence conversations.

For both parties it comes down to fierce, upfront dialogue. Be true to yourself and your vision from the very beginning. Listen, ask hard questions, answer boldly and with vulnerability, and whatever you do, don’t tell them what you think they want to hear.

Looking for a branding partner that has helped investors navigate founder brands – you found us. Drop us a note and let’s talk.

David Lemley

David was two decades into a design career with a wall full of shiny awards and a portfolio of clients including Nordstrom, Starbucks, Nintendo, and REI. His rocket trajectory veered when his oldest child faced a health challenge of indeterminate origin. Hundreds of research hours later, David identified food allergy as the issue and convinced skeptical medical professionals caring for his child. Since that experience, David and Retail Voodoo have been on a mission to create a cleaner, healthier, more sustainable food system for all.

Connect with David