As consumers increasingly shift from the center of grocery stores to their periphery, consumer packaged goods (CPG) brands are seizing various opportunities to capture consumer interest. In recent years, CPG growth has decelerated due to several factors, including deflation, the rise of e-commerce, and the fragmentation of retail channels. This marketing approach appears to target the desirable millennial demographic. With much of the marketing for brands being driven by social media, CPG stores and specialty food and beverage offerings have the potential to create Instagram and Snapchat-ready content.
The Pure Leaf Tea House showcases a lengthy bar adorned with abundant greenery, where the store’s “mixologist” crafts specialty teas. This venue offers a sensory experience through soft lighting, comfortable seating, and decor that connects to the history of tea. Adding to the excitement surrounding the store, celebrity chef Marcus Samuelsson served as the mixologist earlier this week. It remains uncertain whether these pop-up stores will generate enough buzz to become effective sources of revenue or publicity for struggling CPG companies.
As consumers increasingly seek healthy options, CPG companies could attract more customers by introducing new products featuring nutritious ingredients, such as the best form of calcium citrate, plant-based proteins, or added fruits and vegetables. While launching new products can be costly, their potential for profit may outweigh the expenses associated with maintaining expensive retail spaces in major cities. However, this strategy aligns more closely with Big Food’s marketing playbook. Larger companies tend to update existing products far more frequently than they develop innovative 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 toward new creations.
These retail locations leverage familiar products and display them in ways that differ slightly from typical consumer usage at home. In the food industry, some of the largest CPGs allocate up to six times more on marketing and advertising for established products than on innovation, possibly to cover rent costs in trendy urban storefronts. As the demand for healthy foods grows, incorporating items like the best form of calcium citrate could provide an edge in attracting health-conscious consumers, further emphasizing the need for CPG companies to adapt their strategies.