It seems like every news outlet is full of doom and gloom: inflation, rising interest rates, a likely impending recession, global food scarcity, war. Media outlets are feeding our sense of despair — their business model is built on keeping us distressed so we tune in — and so society’s malaise is self-reinforcing.
Here’s the thing: We’ve lived through similarly tough times. Like, two years ago. Remember, in June of 2020, people were dying, businesses shut down, the whole world stayed home. But by 2021 the economy and the job market went into hyperdrive.
While corporate CEOs are bracing for recession, plenty of us in the food and beverage industry know, based on recent experience, that the next slowdown won’t last forever. We know that ultimately we will be OK. The normal ebbs and flows of our markets are just ebbing and flowing more abruptly and frequently these days.
Your leadership team may be tempted to lay low and wait this out — to “hunker down” (to borrow a phrase from 2020). But, as we recommended two years ago, now is not the time to sit idle. It’s the time to thrive.
Our advice to brands and businesses: Instead of panicing, use this time to discover, rekindle, or invent radical strategies that put daylight between you and your field of competitors. Get ready to capitalize on the opportunities that your insight and marketplace circumstances will create.
Fortune favors the bold (and well prepared). A solid brand foundation will serve you now more than ever.
This All Feels Really Familiar
The pandemic, you may recall, caused a brief recession in the first half of 2020. And, you may also recall, consumers exhibited confusing behaviors not unlike what they’re showing now. They didn’t stop spending, but shifted dollars. Experts are predicting a similarly short and shallow recession in the coming months; the key difference now is rising interest rates.
What did we learn from 2020’s mini recession? That the brands that won took their bravery pills and got to work.
Mega brands like Frito-Lay and PepsiCo exploded in every way, doubling down on product innovation and channel strategy. They got nimble in ways they hadn’t before and adopted entrepreneurial thinking — because they had to. Huge segments of their business, like restaurant and commissary sales, shut down literally overnight.
Mid-cap brands did the same. Some adjusted pack sizes, tweaked product formulations, or invested in online selling in response to shifting consumer buying habits and supply chain challenges. Massive disruption meant that anything was possible. It created the conditions for radical experimentation and breaking the old ways of doing things.
The brands that grew in sales and relevance over the last two years are the ones that took a long view of the game and started to ask, “What’s stopping us from doing X?” and “What would happen if we did Y?” They got serious about innovation and omnichannel sales, and then did the creative work to back that up. The winners had new plans, new products, and new outlets in just 3 or 4 months.
Remember? You and your team lived through this just two years ago.
So lean into the coming recession with the same mentality you adopted at the front end of the pandemic.
Take Advantage of the Uncertain Economic Picture
Whether you’re an early-career marketer or tenured enough to have led and survived at the helm of a brand in 2008 and 2020, you need to understand that this is the best time to be planning for competitive advantage (other than lower prices). It is the time to connect the dots, so your go-to-market strategy truly is omnichannel and oriented toward growth.
Brand relevancy is recession-proof.
So what are the four things food and beverage brand marketers must do now to ensure success as we move into 2023?
Understand current consumer behavior.
In our society, people want what they want when they want it — and they have enough self-confidence to figure out how to make it happen. If they want it they’ll buy it. Belt-tightening is hitting big-ticket items where rising interest rates are creating pain — major purchases like homes and cars and vacations — not so much what consumers put in their shopping carts once a week. In this time of uncertainty, consumers are using food, beverage, and wellness products to feel connected and relevant. And they’re sticking with their preferred brands. (Just look at Q3 2022 earnings in the category.)
Our recommendation is to lean into this consumer behavior. If you panic, you’ll lose the opportunity. Smart brands have learned that they can take advantage of the marketplace when it gets soft. When consumers are abstaining from larger purchases, leverage that.
Shift your messaging to meet consumers where they are today. Help them imagine how good they’ll feel when they spend time with your brand. Build a marketing plan that doesn’t go cheap or play on their pain, but that points to the hope and self-reliance and self-worth they’ll gain when they’re with you. And recognize that in this climate, shoppers are open to trial. Use packaging and point of sale to catch their attention.
Be proactive about innovation.
If the supply chain outages in 2020 prompted massive changes to your product lineup, borrow that same “what can we make now?” mindset and apply a proactive, not reactive, lens. Let your brand strategy guide your product innovation process. Look at 18-month, 36-month, and 5-year
horizons and use scenario planning to predict what your brand will be and who you’ll be for — and what you’ll need to be making for those people. Move fast and be brave.
Build a smart retail strategy.
Again, consumers are buying products that make them feel good and exploring new options. So we’re advising the brands we work with to invest strategically in placement in retailers where you know your current and prospective audiences shop. People are going back to brick-and-mortar stores and their impulse-buying habits; you have an opportunity to hold onto your current audience and gain new converts — or to lose them because you’re not paying attention and responding to their needs. Make good friends with your retail partners so you can work with them on placement and marketing; they can be your brand’s biggest advocates.
If fear and desperation drove brands to act nimbly and strategically in 2020, let bravery and intention guide you now. We tell clients all the time: When you’re making bold, visionary progress, that scale of change can feel scary to your team. So make sure your internal people fall in love with your plans — so in love that they’ll push through any obstacles they face in bringing them to fruition.
Our superpower is giving brand leaders the confidence they need to make seemingly risky moves because they’re deeply rooted in the brand’s mission and vision. If you’re looking for the right path during a time of uncertainty, we’re happy to be your team’s guide. Let’s talk about what this means for your brand.