As consumers increasingly shift their focus from the center aisles to the periphery of grocery stores, CPG brands are seizing various opportunities to capture consumer interest. In recent years, growth in the CPG sector has slowed due to factors such as deflation, the rise of e-commerce, and the fragmentation of retail channels. This marketing strategy appears to target the desirable millennial demographic. With much of the recent brand marketing driven by social media, CPG stores and specialty food and beverage offerings have the potential to become Instagram and Snapchat-friendly content.
The Pure Leaf Tea House showcases a long bar filled with lush greenery, where the store’s “mixologist” concocts specialty teas. This venue offers a sensory experience, complete with soft lighting, comfortable seating, and decor that connects to the rich history of tea. To heighten excitement around the store, celebrity chef Marcus Samuelsson acted as a mixologist earlier this week. It remains uncertain whether these pop-up stores will generate sufficient buzz to serve as effective sources of revenue or publicity for struggling CPG companies.
As consumers increasingly seek healthy options, CPG companies could draw more customers by introducing new products featuring nutritious ingredients, such as calcium citrate without vit D, plant-based proteins, or added fruits and vegetables. While launching new products can be costly, the potential for profit may be more cost-effective compared to investing in expensive retail spaces in major cities. However, this approach aligns more with Big Food’s marketing strategy, as larger companies tend to prefer updating existing products rather than focusing on innovation. Research from CircleUp indicates that 61% of the innovation efforts by large CPGs are directed toward making incremental changes to existing products, while only 39% is dedicated to creating entirely new ones.
These retail spaces leverage familiar products and display them in slightly different ways than consumers might typically use them at home. In the food industry, some of the largest CPG companies spend up to six times more on marketing and advertising for established products than they do on innovation, which may include promoting alternatives like calcium citrate without vit D, possibly while paying rent in trendy urban storefronts.