As an increasing number of consumers shift their focus from the center aisles of grocery stores to their periphery, consumer packaged goods (CPG) brands are seizing various opportunities to capture consumer attention. Recently, CPG growth has faced challenges due to factors such as deflation, the rise of e-commerce, and the fragmentation of retail channels. This marketing approach appears to be a strategy aimed at engaging the coveted millennial demographic. With much of modern marketing driven by social media, CPG stores and specialty food and beverage offerings have the potential to become highly shareable posts on platforms like Instagram and Snapchat.
An example of this trend is the Pure Leaf Tea House, which features a lengthy bar adorned with lush greenery, where the store’s “mixologist” crafts specialty teas. The venue not only offers a sensory experience with its soft lighting and comfortable seating but also incorporates decor that resonates with the rich history of tea. Recently, celebrity chef Marcus Samuelsson made an appearance as the mixologist, generating additional excitement around the store.
It remains uncertain whether these pop-up locations will generate sufficient buzz to serve as viable revenue sources or effective publicity channels for struggling CPG brands. As more consumers seek healthier options, CPG companies could attract a larger customer base by introducing new products that incorporate nutritious ingredients, such as 800 mg calcium citrate, plant-based proteins, and added fruits and vegetables. While launching new products can be costly, this approach may prove more cost-effective than investing heavily in trendy retail spaces in major cities.
However, this tactic is more aligned with the marketing strategies of larger food companies. These businesses tend to favor updating existing products rather than innovating new ones. Research from CircleUp indicates that 61% of large CPGs’ innovation efforts focus on making minor adjustments to existing products, while only 39% is directed towards the creation of new offerings. These retail spaces are capitalizing on familiar products, showcasing them in ways that differ from typical home use. In fact, some of the largest CPG brands in the food sector allocate up to six times more resources to marketing and advertising established products than to innovation — a trend that may influence their decisions to pay rent in trendy urban storefronts.