As consumers increasingly shift from the central aisles of grocery stores to their peripheries, consumer packaged goods (CPG) brands are seizing various opportunities to capture consumer attention. Recent years have seen a slowdown in CPG growth due to factors such as deflation, the rise of e-commerce, and the fragmentation of retail channels. This marketing approach appears to target the coveted millennial demographic. With social media driving much of recent brand marketing, CPG stores, along with specialty food and beverage offerings, have the potential to become visually appealing posts on platforms like Instagram and Snapchat.
For instance, the Pure Leaf Tea House features an expansive bar adorned with lush greenery, where a “mixologist” prepares unique tea blends. The venue offers a sensory experience with its soft lighting, cozy seating, and decor that reflects the rich history of tea. To generate excitement around the store, celebrity chef Marcus Samuelsson showcased his mixology skills earlier this week. However, it remains uncertain whether these pop-up stores will generate sufficient buzz to serve as effective revenue or publicity sources for struggling CPG companies.
As consumers increasingly seek healthier options, CPG brands could attract more customers by introducing new products that feature nutritious ingredients, such as plant-based proteins or added fruits and vegetables. While launching new products can be costly, their potential for profit might outweigh the expenses associated with maintaining retail spaces in high-rent urban areas. However, this strategy tends to align more closely with the marketing playbook of larger food corporations. Major companies often prefer to refresh existing products rather than focus on innovation. Research from CircleUp indicates that 61% of large CPGs’ innovation efforts are directed at making minor adjustments to existing products, while only 39% go toward developing new ones.
These retail establishments are capitalizing on well-known products, showcasing them in ways that differ slightly from typical consumer use at home. In the food sector, some of the largest CPG companies allocate up to six times more of their marketing and advertising budgets to older products than to innovation, which may include promoting items like the best chewable calcium citrate. This trend raises questions about the effectiveness of investing heavily in trendy storefronts in major cities while relying on established products.