Cheetos Ahoy!

A theme for this year is going to be how big brands reinvent themselves to look “smaller” and more authentic. Between Amazon, Aldi and a generational bias towards less processed food, the big brands are under incredible pressure. But there is light in the tunnel. When the owners of brands invest in the “soft marketing” and brand building that is not price/promotion focused, they have a pathway to beat back the changing retail structure and dominance of low cost retailer managed private brands. The 2017 story of Cheetos creating a pop up restaurant is a great example what the winners will be doing over the next few years.

The Wall Street Journal: “The Spotted Cheetah, a pop-up restaurant small big brands specializing in dishes made with Cheetos, has sold out all of the roughly 300 reserved slots for its three-day run, say officials with PepsiCo’s Frito-Lay division that makes the snack … Spaces were gone within six hours of last week’s announcement of the opening, officials said, adding that there is currently a waiting list of more than 1,000 people should anything become available.”

“The Cheetos restaurant, helmed by celebrity chef Anne Burrell, will feature several varieties of the snack in close to a dozen dishes … Menu items, priced from $8 to $22, include Cheetos meatballs, Cheetos grilled cheese with tomato soup and Cheetos-crusted fried pickles. There are even desserts made with Cheetos, albeit the Sweetos variety of the snack.”

Sweetos? Now that’s something private label can’t do!

Big Brands Fight Small Batch in 2018

If you can’t beat them join them (or buy them) is the mantra of the largest consumer product companies for the upcoming year. With minimal entry costs due to the low costs of digital media, combined with easy to find quality contract manufacturing, little brands have spent the past few years getting big fast and causing real pain to the largest companies. With consumers in the mood to spend up for (perceived) quality, it’s easier than ever to get consumer trial for a new brand because price is not the driving consumer focus.

The Wall Street Journal started 2018 with a great piece on Unilever and how they’ve adjusted their global branding to meet the challenges of these fast paced “ankle biters”. As someone who was once called an ankle biter by a dear wall street friend (oxymoron), I can think of no better compliment or sign that larger companies never see the train in the tunnel until it’s too late.

We who disrupt are not ankle biters. We are going right for the jugular of their business models, but it takes time for those companies to feel the cut until it’s too late. Read the WSJ piece here: Outfoxed by Small – Batch Upstarts, Unilever Decides to Imitate Them, as a great primer on one of the key battles that will be fought in 2018.

This Armpit’s For You? Budweiser and Old Spice….

Monday’s Wall Street Journal  chronicled the implosion of AB InBev’s “flagship” brand, Budweiser.  The iconic brand is in a death spiral fueled by management’s failure to confront the yearning of young American beer drinkers for something that tastes a step above the king of no taste beer. The article is a must read for anyone who imagines that even a market leader can stand still. What the story misses is that the new playbook is really a remake of the Old Spice to Red Zone marketing coupe.

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