Brand Slam Episode 1: Understanding Common Barriers to Brand Relevance in 2020
Learn the category audit techniques these leading brands have leveraged to average triple-digit growth.
In this episode you will meet RECIPE 33 founder, Dan Smith. As a 20-year CPG industry veteran, Dan created RECIPE 33 to innovate an old-fashioned industry (snack nuts). The brand’s signature product is a range of infused almonds made from clean ingredients.
Brand Slam was created by Retail Voodoo to help CPG entrepreneurs in food, beverage and wellness reduce their struggle with brand growth in the face of Covid-19. Using the auditing process models created by Retail Voodoo to develop Brand Ecosystems, (which we’ve used for some of the world’s most beloved brand and feature in the book Beloved & Dominant Brands,) we benchmark Recipe 33 and provide strategies to help Dan and his team get brand traction.
Can’t get enough? Sign up for our next episode with Red Plate Foods, on October 22nd 2020. Register here! Or – sign your own brand up for Season 2 – that starts February 2021.
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.
We humans, especially in the naturals space, have desires to live strong clean, and healthy lives. My guest Jane is no different – however, her journey into the better-for-you space took a route many of ours don’t. A child born with food allergies added fuel to her entrepreneurial ways and inspired her to use her natural leadership ways to help move the free-from movement mainstream.
In this episode, Jane Pinto, founder of First Crop, Don’t Go Nuts, Sacred Sleep, and the Pinto Barn shares with me, her journey of developing brand ecosystems that are based on the foundations of reciprocal relationships. She challenges our thinking as brand owners and consumers to do one thing every day that holds our industry accountable for the claims we make and the passions and commitments we profess. And she reminds us that true leadership starts with the heart. Listen, learn, and get inspired!
In this episode we learn:
What sacred economics are and how companies can embrace this philosophy.
Why we should always believe that there is enough for everyone.
How to create brands using the foundations of love, transparency, and authenticity.
How being honest about your knowledge, abilities and your feelings can make you a better leader.
How to have courageous conversations with your consumers, customers, business partner, community and employees.
That it’s time to be bold, real, and fierce leaders.
It’s Time to Lead with Passion and Heart with Jane Pinto, Pinto Barn
About Jane Pinto:
Jane Pinto is founder of First Crop, Don’t Go Nuts, and Pinto Barn. She is a lifelong visionary in the naturals and wellness space building cultures of love and care, companies with strong missions that are devoted to healing and elevating people and the planet, and spent her entire career helping corporations create workplaces that honor unconditional equality. Her companies create innovative products and services that help people improve their lives through engaging with consciously created, uniquely designed products.
Pinto Barn– Founded in 2011, based in Salida, Colo., Pinto Barn is a collective of caring hearts who commit their energy, talents, and passion to consciously creating products that help people to live healthy, whole lives. Divisions include Don’t Go Nuts and Sacred Sleep.
Don’t Go Nuts– makes safe nut-free foods using organic, non-GMO ingredients that are good for you and good for the planet.
First Crop – A hemp and CBD brand with the mission of “Healing People and Planet one seed…one soul… one regenerative act at a time.”
Sacred Sleep – a division of Pinto Barn Inc., is a company dedicated to Lifestyle Sleep Wellness and to creating Sleep Sanctuaries to help people set intention around sleep. In addition to the new organic cotton and fair-trade alpaca collections, Sacred Sleep’s product offering includes luxury eucalyptus blend sheets and mattress covers, medicinal herb loose-leaf teas in daytime and nighttime blends, and custom locally made pottery mugs and tea bowls. Sleep is sacred, so are you.
Hilary’s Eat Well– is the creator of convenient and culinary foods that are made from real ingredients and are free from common allergens. We are helping to heal the American diet by bringing these foods to all people who seek tasty, nourishing cuisine. Our products forge innovative culinary paths and disrupt the status quo. We care about the health of our customers, employees and ecosystem.
EnjoyLife – Enjoy Life Foods is the leading brand in the growing Free-From category, featuring a robust portfolio of Certified Gluten Free and Non-GMO Project Verified products that are free-from 14 common allergens. Enjoy Life’s mission and brand promise is to deliver safe, better-for-you products free-from food allergens, but not free-from taste so everyone can Enjoy Life and Eat Freely!
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.
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.
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.
While we think we’re pretty good at identifying trends and opportunities for our food and beverage clients, we can’t foretell the future with certainty. What we can see, though, is a number of smart strategic steps marketers and leaders of mission-driven food and beverage brands can be doing now to position their businesses to thrive over the rest of this year.
We’ve identified seven strategies aligned around three key positions you can take to ensure success in 2020: stretch, invest, and pivot. You can’t expect to do the same things forever and generate the same business results; that’s doubly true now.
Understand Key Roadblocks to Success in 2020
Before we get to the seven strategies, let’s first put our fingers on the hurdles you’ll inevitably face in leading your organization now.
Fear
We’re not talking just about fear of shutdowns and other risks unique to the current pandemic — rather, cultural and personal fear that always lingers in the background. Brand leaders fear that they won’t meet expectations (of customers, stakeholders, employees) and so they don’t stretch beyond what they know. They fear not just failure, but success. Fear can trickle through an entire organization, leading to a culture of, “we don’t do it that way” or “prove the concept first, then we’ll implement it.”
Safety
Of course, the bottom line is essential; without profitability, you’re out of business. But if you’re focused on preserving market position and minimizing erosion instead of growing, you’re missing opportunity.
TMI
There are too many inputs, too many unknowns, too much conflicting guidance. It’s hard to even trust your gut. TMI makes decision making difficult: which of the conflicting scenarios or forecasts can you believe?
7 Strategies for Food & Beverage Brand Success in 2020
Looking ahead to the end of the year, what are the things you can be doing now to ensure your brand’s good health as the economy emerges from its hibernation?
1) Ask better questions
Revisit the brand’s strategic foundation. What is your brand, really? (We define brand as the promise that you keep and the ways in which you keep it.)
Define where the real boundary is, not just the safe one. You can’t stretch beyond the reality of your brand promise (for example, your vegan brand can’t suddenly start making beef chili), but you can go right up to that frontier.
Ask your team questions like these to identify how far you can move in search of opportunity:
What is our brand’s contribution to society? Why do we exist beyond products and profits?
How can our brand create value for our community/tribe of followers?
What does our brand have permission to do that our community cannot get from other brands?
How does our brand evolve from good and services mentality to a citizen brand that provides a unique contribution to society?
What are our brand’s core values? (e.g., community, social justice, loyalty, fun)
Do our core values align with what we currently contribute?
How is our brand willing to change behavior to better emphasize and deliver upon our values?
2) Do your research
You should have pre-existing research — usage & attitude studies, competitive audits, audience segmentation — and that information remains valid. Post-Covid, we’ll get back to that familiar territory. Once the supply chain resumes normal capacity and consumers feel comfortable getting out again, they’ll return to familiar habits. We live in a commerce-driven economy; that hasn’t changed. What we’re seeing now is a situational disruption, not a permanent national disruption.
Ask yourself questions like these:
Who else can claim these exact values our brand represents?
How are they behaving, taking action, delivering on their promises?
What does our brand do that is different or better?
Who is our consumer, and what kinds of products can we innovate that will meet their needs?
Can we become even more relevant to the people who’ve already chosen our brand? Can we resonate more deeply in their lives?
In a sea of sameness, how can we be meaningfully different by tapping into their emotions, not just their functional needs?
3) Stretch thyself
For natural food and beverage brands, stretching is all about determining what’s possible and removing the roadblocks (culture, fear, etc., as discussed above). Stretching is a quest for logical opportunity.
One of the exercises we conduct in client workshops is to have the brand group write a eulogy for the brand. We preface this exercise by a lengthy session that defines the capital-B Brand (the promises you make and the ways you keep them) and then envisions the brand’s future contribution to the world.
We then ask the team to articulate what people will say about the brand when it’s gone. It’s a powerful way to create clarity around the brand’s superpower. (For example Patagonia’s superpower is environmental justice; it enlists fans in the mission.)
Questions to ponder:
What is something our brand is not currently doing that only it can do?
What does our brand have access to that others don’t? (investors, distribution, ingredients, leadership)
What is our brand’s superpower, and how can we use that to contribute to the common good?
In what ways could our brand die?
Write the eulogy: What will our brand’s legacy be?
4) Go for impact
Aspire to citizen brandhood, not commodity brandhood. As a mission-driven brand, you are a member of the very community you create, a shepherd and a guide and a protector. That role, combined with strong product features and benefits, is unbeatable. Let Maslow’s Pyramid guide you: First meet the consumer’s functional needs, then meet their desire to belong to a community, then appeal to their sense of self, then help them achieve their higher purpose.
Armed with consumer research and your stretch potential, consider:
What role does the brand play in our tribe’s lives?
How might it be relevant to future consumers, as well?
Beyond features and benefits (like minty flavor of toothpaste), what does our brand help people be or achieve (i.e., a wellness-focused lifestyle built on natural products)?
What wrong does our brand seek to right in the world? What problem does it solve? What fight does it fight?
What’s possible, given our organization’s resources?
5) Craft a better story
Storytelling is the flavor of the month in marketing, and for good reason: People are hardwired for stories. Storytelling is the means of connecting the brand strategy with your target audience. You don’t have a story if your brand doesn’t have a WHY. And you don’t have a story if you don’t know who you’re telling it to.
This is an excellent time to revisit your brand’s narrative and the way you communicate it through the channels of the Brand Ecosystem.
How can the brand’s narrative connect our products, company goals and values, ideology, ethos, to our specific community?
How should the brand story (or tone of voice) shift in our current climate?
Are we telling stories that our fans will be compelled to share?
What do we want customers to walk away telling one another?
How does our new story relate to the brand’s history?
What and how do we want to tell this story?
6) Pivot
Many brands are pivoting in their communication right now, with mixed results. A couple of examples of brands that are getting messaging right in times of crisis: Tide’s “Loads of Hope” initiative is bringing laundry services to healthcare workers and first responders. And Frito-Lay has shifted from its usual “food for fun times” messaging to run a highly regarded TV spot that talks about how they’re hiring. Brands have passed the “we’re all in this together” messaging and are now focusing on what they are doing to help.
No doubt, brands will need to remain sensitive to their audience’s needs and flexible in tactics through the end of this year. Some things to think about:
How are we leveraging social, digital, email, and website messaging to demonstrate empathy and mention how the brand is evolving, helping, contributing?
Do we need to talk from a different perspective than we would ordinarily?
Are there pillars of our brand platform that are not normally at the forefront but would be relevant to communicate now?
If we look at pivoting as on an axis (not a leap forward or sideways), how should we shift?
7) Invest
Two ways to think about investment: opportunistic and short-term; and strategic and long-term.
In the short term, investing might look like one-off activities that support the brand and your messaging strategy. Think about giving product away to people in need: food pantries, school nutrition programs, healthcare workers, social service agencies. Or donating dollars to organizations helping those reeling from the pandemic and its fallout.
On the long-term, strategic side, it’s now time to get serious about innovation. Look at all those initiatives you were thinking about doing but have set aside for a while. Determine where and how your brand has permission to stretch and create an innovation pipeline that will expand your brand’s reach and long-term relevance.
Issues to think about:
Is there a piece of equipment we could add to the manufacturing process to upgrade the product? (Something that might, say, take an ice cream bar from One-of-Many product to Beloved & Dominant treat.)
While competitors are pulling back, what will our post-Covid campaigns look like?
What visual or content assets can we assemble now so we’ll be ready to launch as the time comes?
Can we break through barriers in the organization to innovation? What about co-manufacturing? What about investing in higher quality ingredients?
Considering our audience, our brand foundation, and our stretch, what products do we need to develop now so they’re ready to go when things get back to normal?
Normal, of course, is a relative term. If you’re looking ahead to the rest of this year and beyond, we can help you find the right kind of opportunity. Let’s connect.
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.
In most marketer circles, it’s not sexy to talk about marketing to the Baby Boomer generation: they seem too old, stuck in their ways, out of step with modern ideas. Instead, brands chase millennials — the on-the-go tastemakers who are all over Instagram — and Gen Zers, whose world views align with mission-driven BFY brands.
Each of these cohorts has distinctive demographic and psychographic characteristics. And growing a brand with a Gen Z or Millennials is tough, as they tend to be price sensitive and fickle. So are you missing out by overlooking Boomers?
Why Brands Overlook Boomers
The “OK, Boomer” meme sparked by Gen Z to diss their elders might as well apply to marketers, too. Why do brands dismiss these consumers?
It’s human nature that we’re always looking for the new and next. In a business sense, marketers think they already understand all they need to know about the customers they’ve been talking to for years. And many companies mistakenly think that the path to growth moves beyond their current demographic into others.
In addition, millennials were just so difficult for marketers to figure out (in part because most of those marketers were likely Boomers themselves until fairly recently). Millennials are disillusioned and pessimistic: they came of age during an economic downturn and are overloaded in debt and technology. Marketers were initially taken aback by this cohort because they were so different, and it took so much research to understand them.
Here’s What Marketers Should Know About Boomers
Your brand may not be actively communicating with your existing Boomer audience, figuring you’ve already got them in the fold. Or you may not see them as a growth opportunity. Worse, your startup BFY brand may not be targeting them in any way, at all. We’d suggest that all of those strategies are misguided. Here’s what you need to know about this generation:
They’re not old. First, let’s remember who the Boomers are: Born between 1946 and 1964, the youngest of them are now in their mid to late 50s. They’re hardly old. The Greatest Generation was old at age 60; there’s a bias about Boomers—but they’re incredibly active, they’re big spenders, they’re traveling and going to the gym and even still working.
They’re the original “naturals.” Remember: Boomers launched the conscious consumerism movement in the 1950s and ’60s. At that time, teens and young adults were concerned about pesticides, animal welfare, and Big Ag. They read “Silent Spring” and started the first natural foods co-op stores. They embraced whole foods and vegetarianism. Their children, the millennials, took the movement mainstream. But if you’re a BFY brand, Boomers are your first-line audience.
Boomers are redefining aging. Nutritional supplements, expensive skincare products, gym memberships, cosmetic procedures — Boomers are embracing everything at their disposal to look, feel, and behave like their younger selves. Just as they did in the 1960s, Boomers are disrupting culture; this time, they’re disrupting age. They’re reinventing their lives so they can live another 30, 40, or 50 years on their own terms.
They are big spenders. Baby Boomers account for more than half of U.S. spending. They take between four and five leisure trips a year. They’re renovating the family home or furnishing new downsized condos. In addition to spending on health and wellness products, they’re big snackers — as empty-nesters or solos, they don’t prepare big dinners at home anymore and tend instead to snack heavily.
They value experiences. Boomers favor brands that deliver great experiences that align with their interests. And they’re willing to pay a premium for products that deliver.
Finally, Boomers behave like younger consumers do — more than you may think. The difference is that they’re not building the platform they’re going to live their life on; they’re looking to optimize the lives they’ve built. Boomers are influenced by the younger generations of their kids’ and grandkids’ age. They’ll bring home those products their kids and grandkids like, and then they’ll sample and adopt those products. Too, Boomers behave more like Gen Z on social media: They’re more plugged in because they have time, but their preference for personal interaction vs. digital mirrors Gen Z’s habits.
How to Market to Boomers
As with any demographic, you need to understand how to talk to and persuade Boomers. Here are some smart tactics:
Appeal to their caregiving nature — having raised kids, they’re still looking to nurture, whether it’s a pet or a relative or a neighbor. Brands can leverage the fact that Boomers are used to spending money on others.
Don’t call them old — Boomer consumers don’t want you to start talking to them like an older person, i.e., “Hey, Boomer, we know you need these comfy shoes …” While their Greatest Generation parents saw themselves as old at a relatively early age, Boomers don’t think of themselves that way. Speak to them honestly, but appeal to their sense of younger self and their appetite for staying forever young.
Play up the premium — Remove obstacles to a premium experience, even if you don’t have a premium brand. Take the friction out of the process of buying and using your product. They’ll remain loyal to brands that deliver the experience they expect.
Remember: Boomers aren’t going anywhere anytime soon. They represent 20 to 30 more years of sales for brands that can catch their attention and stroke their youthful egos. Does your brand need to take another look at your target audience? Let’s Chat.
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.
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.
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.
On Episode 97, we have David Lemley in to chat about marketing in retail—he calls it retail voodoo. David was an early employee at Starbucks, and that experience taught him a lot. His company, Retail Voodoo, does brand strategy for specialty food and beverage brands. David’s expertise in brand strategy, innovation, consumer markets, and consumer behavior is deep, so I wanted to talk to him about retail marketing, what the retail landscape looks like, and of course Starbucks (which we get to in part two). But in part one, we get the low down on Retail Voodoo.
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.
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.
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.
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.
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.
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.
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.
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.
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.
The “4 Ps” model has been a foundation of marketing management since the 1960s:
Product + Price + Place + Promotion = Marketing
If you manufacture a product, price it right, make it accessible to shoppers, and spread the word about it, you make the sale. Easy.
We’re here to declare this 50-year-old formula dead.
Product doesn’t (really) matter anymore. Patagonia a great example: Yvon Chouinard started the company in the ’70s, selling climbing equipment; now they’re in the food business. You can’t win on price, because Walmart has muscled brands into discounting submission. Place is irrelevant: Thanks to Amazon, people can get any product shipped anywhere. And you can’t out-spend the big brands on promotion.
A New Marketing Discipline
Consumers today seek authenticity from the brands they buy; they want to know what’s in their food, and they expect companies to have morals and values. Now more than ever, people use brands as building blocks of personal identity—they don’t just buy your products, they view you as a reflection of themselves.
Consumers’ expectations of brands are even higher in the naturals category because those who are willing to pay more for natural products care not only about what you’re doing for them but about what you’re doing for the planet.
The 6 Ps of Marketing for Natural Brands
We see it: Many brands are struggling to be relevant in the face of changing consumer preferences. They’re increasingly pressured to do more with less and are vulnerable to better-organized, well-funded competitors.
So we guide our clients to focus on a mix of six marketing ingredients:
1. Purpose
This is your mission, your higher calling, your reason for being, beyond making a profit. What’s your contribution to society or the planet? This should be so well defined that you don’t even have to think when you’re asked about it. If it’s not ingrained in your brand’s DNA, you have major work to do.
2. People
Two components here: internal and external. How do you treat employees—not just your office staff but your manufacturing workers? Wages and working conditions are key indicators. Outwardly, what’s your giveback to your community? How are you pouring profits back into supporting your purpose?
Our client Loma Linda is a great example of this internal/external people focus: The world’s oldest vegetarian brand has a manufacturing facility in Rocky Mount, NC, a community of working poor. The founder raised wages, gave every employee food once a week, and taught them how to cook with it for their families.
3. Planet
Do you have a visible, transparent end-to-end manufacturing and supply chain? Not just for your products, but your packaging as well? It’s a challenge: All of the natural snacks brands we know want to put products in pouches, which are not recyclable or renewable. We’re constantly pushing clients to find different options; cans, for example, while not especially sexy, are sustainable and a package of choice for Loma Linda.
4. Passion
This is your why—it underpins your purpose and drives your people. It’s your origin story. Successful brands have a battle to fight, a wrong that they seek to right. Your enemy isn’t your competition; it’s a challenge that your products help people to overcome. Nike’s foe isn’t Adidas—it’s the voice in all of our heads that says, “you can’t.”
5. Personality
Your brand should sound like no one else; in fact, it should be contrarian to your competitors. It should speak in a language and tone that calls out to your tribe. For example, KIND’s core message—“Do the kind thing for your body, your taste buds & your world” wraps a basic message about health and sustainability in a larger envelope of kindness. It’s a great display of brand personality.
6. Profit
Duh. But some passion brands let profit fall by the wayside in pursuit of the higher calling. We’ve watched founder/owners mistakenly believe that being successful in the business they’ve built equals selling out. So they don’t pursue the right relationships, they let growth stagnate, they get stuck with a $25 million business that costs $30 million to run.
If you’re a better-for-you brand, having a good, wholesome product with clean ingredients is a given. You have to stand for something more: sustainable sourcing and manufacturing practices, livable wages for workers, commitment to the environment. You need a prominent, passionate founder (that’s you) with a great backstory and a voice that echoes a siren song to your people.
To this 6 Ps of Marketing, we’ll add a seventh: Partner. That’s us. We’re here to help.
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.
