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This week, Euromonitor International’s Beverages Analyst Howard Telford attended the FUSE 2014 brand strategy and design conference in Chicago, a premier global conference for the design profession. Below, he shares his thoughts on the growing role of design in the food, beverages and food service sectors.
Pepsi’s high profile rebranding of its US Tropicana orange juice in 2009 was an unmitigated disaster, with a US$35 million investment in new packaging scrapped in favour of the original design after just one month of consumer complaints and shrinking sales. While the formula of the orange juice remained unchanged, the company failed to appreciate the extent to which the package and logo of the brand resonated with its loyal consumers.
Clearly, design matters in soft drinks, food service and packaged foods. Amid the important questions of how healthy a product is – or how much it costs – it is important to remember that the question of brand design can play a similarly vital role in shaping consumer experiences. At this year’s FUSE 2014 conference in Chicago, consumer goods took a front seat in the discussion of how better design can strengthen brands and improve sales.
In researching global consumer markets, we know design can shape consumer experiences and expectations (although quantifying this impact as researchers is difficult to do). While consumer aesthetics in taste and materials can clearly vary by market and product, the conversation started at FUSE 2014 helps us to identify the bedrock principles that can lead to outstanding product design in CPG.
The concept of simplicity is important to consumers, with successful brand designers in 2014 seeking to provide the oasis of calm in an increasingly noisy, multichannel marketing universe. Speakers from Chipotle and Honest Tea spoke of efforts to simplify their distinctive brand identity and messaging without massive marketing budgets and expensive scattershot TV ad campaigns. The importance of true marketing messages and authentic ‘brand voice’ was reinforced by multiple panellists. There is incredible complexity and cost in reaching targeted demographics (the vaunted “Millenials” or “Boomers”) through carefully tailored, focus group tested messages. A simpler and seemingly more successful approach for leading food and beverage companies has been crafting brand message and campaigns that remain true to a company’s values. Consumers value authenticity.
According to Chipotle’s William Espey, it may no longer be possible for the vast majority of brands and retailers to find a way to effectively reach their consumer base, instead engaging in a hopeless attempt to identify needle sized target demographics in enormous, multichannel, media haystacks. Nathanuel Ru, a co-founder of Washington based salad restaurant Sweetgreen, also emphasized the importance of quiet, values oriented branding that invites the consumer to come to you, through outdoor festivals, community outreach programs, warm and inviting store designs and other messages that could not be conveyed on billboards or TV spots. In all cases, outlet interiors, exterior packaging and in-store merchandising are immediate, point of sale design factors that can be crafted and controlled – even by the smallest of consumer goods and food service operators.
Opinions can be shared, shaped and amplified by connectivity between consumers. Social channels are a powerful vehicle for brands to master. In order to remain relevant in the crowded, growing marketing universe, brands must be producing content interesting enough for consumers to access information of their own volition. Chipotle’s ‘Cultivate’ campaign – one of the major success stories in US advertising in 2013 – was powerful and informative enough for consumers to seek it out of their own accord.
Consumer confusion is a big problem in contemporary retailing, identified by several speakers at the FUSE conference. With non-standard labelling requirements and new studies, claims and dangers for the global public to interpret and digest, consumers can struggle to choose between natural versus organic products, between added sugar versus naturally occurring fructose, and a host of other health, wellness and sustainability factors – genuine and faddish. Regardless of television, radio or social ad budgets, brand and packaging is the one aspect of marketing and merchandising that a consumer is guaranteed to interact with and therefore represents the most important tool for informing the consumer and shaping opinion. Choosing a package that a consumer will identify and interact with is the best, most cost effective way to answer questions and impact shopper choices.
Above all else, FUSE 2014 emphasised the importance of product design teams, brand management and senior leadership acting in unison in order to make brand design a success. Keynote speaker Indra Nooyi, CEO of PepsiCo, took the stage with the company’s Chief Design Officer Mauro Porcini. This marked the first time that a CEO of a Fortune 500 company (a packaged food and drinks company no less) was a speaker at FUSE, a signifier of the growing importance the design profession will play, as available choices and avenues for feedback (positive and negative) expand in modern retailing environments.
Mrs. Nooyi discussed the importance of business “speaking the language of design,” and the challenge of creating an inclusive, design-friendly business culture in a large, bottom-line focused consumer goods company. Rick Slade, Creative Director of Keurig/Green Mountain espoused similar thoughts, considering the challenges of creating a new, cohesive brand voice in a company of appliance engineers and coffee roasters. Giving brand design a seat at the table – not simply as an afterthought or ‘finishing touch’ – but as an integral part of creating interest, demand for a product and rewarding consumer experiences is vitally important. Company leadership in the CPG industry must be involved in prioritizing brand designers.
Demand impacts aesthetic choices but also logistical choices – Mrs. Nooyi identified the problems posed to Pepsi and its competitors by new, multichannel retailing environments. According to Euromonitor International, global online value sales of food and drink will grow by an incredible 15% annually in constant USD through 2018. In addition to the consumer facing impact of design, it is worth considering how tangible package design can contribute or ameliorate the challenges posed by shipping heavy and perishable items long distances in a sustainable way.
Package design and design centric branding can help soft drinks manufacturers make a physical connection with consumers – a connection that is clearly not being achieved in mature markets by tinkering with artificial sweeteners and simply increasing the volume of traditional marketing efforts, such as event sponsorship. The industry must begin to view the staid aisles of American supermarkets or still shrink-wrapped stacks of product in European discounters as missed opportunities for consumer engagement.
This connection will be particularly important in the soft drinks industry of the future. Since their Tropicana debacle in 2009, PepsiCo have emerged as a company that is not afraid to experiment with the package as a way of winning consumers. This month, the company launched an advertisement in Colombia (in partnership with a local agency) promoting a new bottle cap for Mountain Dew. Cognizant of the brand’s young, active consumer base, the company added a small wrench indentation to the top of the cap, allowing users to repair the wheel nuts of skateboards. Mountain Dew have been singularly successful in understanding their audience, but remaining true to the youthful, energetic values of the brand. PepsiCo have also placed considerable resources behind the Pepsi Mini Can – a smaller unit size introduced in the US and Western European markets, enabling greater portion control for wellness minded consumers. Competitors Coca-Cola have also tinkered with carbonate package sizes, introducing energy drink style slim line 250ml cans in Western Europe in 2013.
Impulse, on-the-go soft drinks are outperforming in developed markets – competing in the packed coolers of convenience stores and forecourt retailers where they lack the merchandising power of DSD displays and massive branded grocery aisles that they have long enjoyed in the shrinking, less profitable multipack segment. Big soft drinks brands must implement superior design practices and do more to stand out on the shelf, while staying top-of-mind outside the store.
For more information on FUSE 2014 and future IIRUSA conferences please visit http://www.iirusa.com/fuse/fuse-home.xml