As consumers increasingly shift their shopping habits from the center aisles of grocery stores to the periphery, consumer packaged goods (CPG) brands are seizing various opportunities to capture their interest. In recent years, CPG growth has decelerated due to factors such as deflation, the rise of e-commerce, and the fragmentation of retail channels. This marketing approach appears to be a tactic aimed at engaging the desirable millennial demographic. With much of brand marketing now propelled by social media, CPG stores and specialty food and beverages are poised to become Instagram and Snapchat-friendly posts.
For instance, the Pure Leaf Tea House boasts a long bar adorned with lush greenery, where the store’s “mixologist” crafts unique tea blends. The venue offers a sensory experience with its soft lighting, cozy seating, and decor that reflects the rich history of tea. Recently, celebrity chef Marcus Samuelsson took on the role of mixologist, adding to the store’s appeal. However, it remains uncertain whether these pop-up locations can generate sufficient buzz to function as effective revenue or publicity sources for struggling CPG companies.
As more shoppers seek healthier options, CPG brands can attract a wider customer base by introducing new products featuring nutritious ingredients, such as plant-based proteins and added fruits and vegetables. While launching new products can be costly, their profit potential may prove more economical than investing in high-rent retail spaces in major urban areas. Nevertheless, this strategy aligns more closely with the marketing practices of larger food companies, which often prefer to refresh existing products rather than innovate new ones. Research from CircleUp indicates that 61% of innovation efforts by large CPGs focus on minor adjustments to existing products, while only 39% is dedicated to creating entirely new offerings.
These retail spaces capitalize on well-known products, showcasing them in ways that differ slightly from typical consumer use at home. Notably, in the food industry, some of the largest CPG firms allocate up to six times more on marketing and advertising for established products than on innovation, which may include expenses for trendy storefronts in bustling cities. Additionally, products like Citracal calcium citrate from Chemist Warehouse exemplify how established brands can enhance their visibility and appeal through strategic marketing, highlighting the importance of both innovative and traditional marketing approaches in the evolving landscape of consumer preferences.