Introduction

In an era marked by economic volatility, companies in the food and consumer packaged goods (CPG) sectors might be tempted to deprioritize growth. However, research shows that growth is even more crucial during times of economic uncertainty. Companies that focus on growth during downturns not only survive but thrive when the economy rebounds.

This exhaustive report aims to provide food business owners with actionable insights into various avenues for growth. We’ll delve into 13 key methods, each accompanied by practical actions and suggestions. Whether you’re a startup looking to disrupt the market or an established brand aiming to expand, this guide offers a multi-faceted approach to growth that can significantly enhance shareholder returns.

The 13 Pillars of Growth

1. Consumers

Description

Understanding consumer behavior, preferences, and needs is the cornerstone of any successful business strategy.

Actions

• Where They Shop: Identify the channels where your target consumers are most active.
• Language & Values: Listen to customer reviews and social media comments to understand their language and values.
• Packaging & Media: Design your packaging and advertising to appeal specifically to your target segment.

Example: Plant-Based Foods

Companies like Beyond Meat have successfully tapped into consumer demand for plant-based alternatives. By understanding where these consumers shop and what values they hold, Beyond Meat has positioned its products in both grocery stores and fast-food chains, appealing to convenience and health-consciousness.

2. Categories

Description

Identifying high-growth and high-margin categories within the food industry can offer lucrative opportunities.

Actions

• Gap Analysis: Review existing categories to identify gaps that your product can fill.
• Partnerships: Partner with retailers or distributors who lack offerings in your category.
• Category Review: Understand your current market position and explore adjacent categories for expansion.

Example: Gluten-Free Products

Brands like Udi’s identified a gap in the gluten-free bread market and filled it successfully. They partnered with health-focused stores and expanded into adjacent categories like gluten-free pastries.

3. Competitors

Description

A keen understanding of competitor strategies and market positioning can help you carve out your unique selling proposition.

Actions

• Value Proposition: Offer something that your competitors don’t.
• Strengths: Leverage your unique strengths to stand out.

Example: Coca-Cola vs. Pepsi

Coca-Cola focuses on the emotional experience of consuming their product, while Pepsi often targets younger audiences with a focus on music and entertainment. Both have carved out unique market positions.

4. Cities

Description

Expanding into new cities, regions, or even countries can offer new market opportunities.

Actions

• Market Research: Use census data to identify promising new markets.
• Regional Focus: Start with cities or regions adjacent to your current markets to test the waters.

Example: Starbucks in China

Starbucks successfully entered the Chinese market by adapting its offerings to local tastes, such as introducing green tea lattes.

5. Capabilities

Description

Assessing your internal skills, technology, and resources can help you identify what you can do best.

Actions

• Manufacturing Strengths: Leverage your manufacturing capabilities to enter markets where you have a competitive edge.
• Channel Success: Identify which distribution channels have been most profitable for you.

Example: Nestlé’s Use of Blockchain

Nestlé leveraged its technological capabilities to implement blockchain for better food transparency, appealing to the modern, health-conscious consumer.

6. Channels

Description

Your choice of distribution channels can make or break your growth strategy.

Actions

• Channel Identification: Think of success in terms of channels, not just customers.
• Channel Players: Understand who the key players are in each channel.

Example: Direct-to-Consumer Brands

Brands like HelloFresh bypass traditional retail channels to deliver directly to consumers, thereby increasing their profit margins.

7. Content

Description

Quality content can attract and retain customers.

Actions

• Content Strategy: Develop a content strategy that offers value to your consumers.
• Guides and Recipes: Create how-to guides, recipes, or even cooking classes that can help your consumers get the most out of your products.

Example: McCormick’s FlavorPrint

McCormick uses its FlavorPrint website to offer personalized recipes, thereby driving both engagement and sales.

8. Collaborations

Description

Collaborations can open up new avenues for growth.

Actions

• Strategic Partnerships: Partner with brands or influencers who align with your target market.
• Leverage Other Areas: When collaborating, consider how you can also leverage other growth pillars like cities and consumer avatars.

Example: Doritos and Taco Bell

The Doritos Locos Tacos collaboration was a win-win, creating a new revenue stream for both brands.

9. Community

Description

A strong community can serve as brand advocates and offer valuable feedback.

Actions

• Swag and Merchandise: Offer branded merchandise to turn customers into walking advertisements.
• Events and Forums: Host community events or online forums where customers can share recipes and tips.

Example: Ben & Jerry’s Activism

Ben & Jerry’s has built a strong community around social activism, which aligns with their brand values.

10. Culture

Description

Aligning your brand with cultural trends or social movements can make your product more appealing to certain consumer segments.

Actions

• Cultural Alignment: Identify cultural trends that align with your product.
• Social Movements: If applicable, align your brand with social movements that resonate with your target market.

Example: Fair Trade Coffee

Brands like Starbucks have successfully aligned themselves with the fair trade movement, appealing to socially-conscious consumers.

11. Customization

Description

Personalization can make your product more appealing to different consumer segments.

Actions

• Product Customization: Offer personalized versions of your product.
• Consumer Segmentation: Use data analytics to segment your consumer base and offer targeted products.

Example: Coca-Cola’s “Share a Coke” Campaign

Coca-Cola’s personalized bottles allowed consumers to find bottles with their names, making the product more appealing.

12. Convenience

Description

The easier your product is to purchase and consume, the more likely consumers will choose it.

Actions

• Product Formats: Offer your product in various formats like single-serve or family packs.
• Ease of Purchase: Make your product available online and in stores where your consumers frequently shop.

Example: Single-Serve Snack Packs

Brands like Lay’s offer single-serve packs for on-the-go consumers, thereby increasing purchase occasions.

13. Cost-Efficiency

Description

Optimizing costs can allow you to offer competitive pricing or increase your profit margins.

Actions

• Bulk Sizes: Offer your product in larger sizes or bulk to appeal to price-sensitive consumers.
• Distribution Efficiency: Consider direct-to-store models to cut down on distribution costs.

Example: Costco’s Kirkland Brand

Kirkland offers quality products at competitive prices by optimizing the supply chain and offering products in bulk.

Conclusion