Greatest Pivots in CPG Industry History
The last two years caused a unique shift in the economic landscape, forcing many of today’s businesses to pivot. While those recent lessons on tenacity will eventually become business folklore, I wanted to sift through CPG industry historical records and share a list of companies that famously (or not so famously) had to pivot one aspect or another for survival.
Sometimes a CPG entrepreneur has a terrible first idea that doesn’t hit the market. Other times they think they have the perfect product, and it flops. While others do have a great product, but it’s marketed wrong or positioned in the wrong sector.
A great philosopher once said…
“Just Keep Swimming” — Dory
Lean Startup
I’ve been fascinated with business pivots since I read the book “Lean Startup” almost a decade ago. According to the book’s definition, a pivot is a “structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.” There’s about a dozen or so different types of business pivots in total talked about in the “Lean Startup.”
A few examples include:
- The Customer Segment Pivot = You’ve built a great product and consumers are using it in the way you’d hypothesized, but those aren’t the group of core customers you’d planned on.
- The Business Architecture Pivot = companies generally follow one of two major business architectures: high margin, low volume or low margin, high volume.
- The Channel Pivot = get closer to the customer, create a simpler sales process, or perhaps create a shorter sales cycle.
Greatest Pivots in CPG Industry History
Wherever you are in business, a pivot opportunity is likely on the horizon. A CEO who can’t pivot at the right time could very well cause major business continuity risk. To provide you with inspiration, I’ll highlight a selection of CPG brands that utilized a business pivot for survival.
Wrigley Company
Wrigley Company didn’t always sell gum. In fact, it started as a soap company in 1891. William Wrigley Jr. would give free baking powder with a purchase of soap. After baking powder became popular, he used the same strategy and started giving chewing gum away free with purchases. By 1893, chewing gum proved to be even more popular than soap or baking soda. This forced Wrigley Company to pivot and begin manufacturing its own chewing gum brands. The Wrigley Company (owned by Mars, Incorporated) is now one of the most recognizable brands in American history. They make the popular chewing gum brands Juicy Fruit, Spearmint, and Doublemint.
Avon Products
David H. McConnell was a traveling book salesman in the late 1870s and 1880s. He would give out free samples of perfume to female customers. In 1886, he realized that his female customers were more interested in those free samples of perfume than the books themselves. This forced David H. McConnell to pivot into the California Perfume Company (known today as Avon Products). He also started the “Avon ladies” door to door sales model, believing women would be able to relate and sell to one another better than male salesmen. Avon Products is now one of the most popular names in the beauty industry.
Hawaiian Punch
In 1934, the tropical fruit flavored concoction known as “Leo’s Hawaiian Punch” started off as an ice cream topping, being sold to local restaurants, stores, and ice cream makers. Over the next decade, as the syrup’s popularity spread, consumers started using it as more than just as an ice cream topping. By 1946, using Hawaiian Punch for drinks was commonplace, so the company finally started selling packaged beverages in grocery stores. The popularity of Hawaiian Punch (now owned by Keurig Dr Pepper) skyrocketed by 1955 and became a national selling brand.
Colgate
In 1806, William Colgate started Colgate & Company as a starch, soap, and candle business. After his death in 1857, William Colgate’s son (Samuel Colgate) ran the company and eventually entered the oral care category in 1873. Colgate & Company is credited as selling the first toothpaste in a tube, Colgate’s Ribbon Dental Cream, in 1896. For the next 126 years, Colgate & Company has held market leadership in the oral care categories of toothpaste and manual toothbrushes. Colgate-Palmolive currently leads with global market share around 39% for toothpaste and 31% for manual toothbrushes.
Ben & Jerry’s
Ben Cohen and Jerry Greenfield were childhood friends. They reunited as adults and decided they should start some sort of food company that was “more fun” than their current jobs. Ben & Jerry’s was originally going to be a bagel company, but they changed their minds when they found out how much it would cost to get all the needed equipment for making bagels. Instead, they both took a $5 correspondence course from Pennsylvania State University on ice cream making and the rest is history. Ben & Jerry’s (owned by Unilever) is now the best-selling single ice cream brand in the world.
Coca-Cola
John Pemberton was a former Confederate soldier who was nearly decapitated in the Battle of Columbus. During his recovery, he became addicted to morphine. Looking to wean himself off the habit, John Pemberton created Pemberton’s French Wine Coca. The initial concoction included yes, coca leaf extract (a.k.a. cocaine), but also alcohol (from wine). When alcohol was banned in Atlanta in the same year he debuted his tonic, John Pemberton substituted the wine with sugar and citric acid. It’s interesting to note though that Coca-Cola wasn’t initially a huge hit, likely because there were various tonics widely available at the time. Coca-Cola is now the most popular carbonated soft drink in the world.
KIND
Daniel Lubetzky might be most famously known as the guy that created the KIND bar in 2004, but did you know a decade earlier he started a Mediterranean foods business? PeaceWorks pursued both Middle Eastern peace and profit through a sundried tomato product under its flagship brand Meditalia. The PeaceWorks company is still in existence today with Daniel Lubetzky as the Chairman. That being said, his primary focus has rightfully shifted to KIND Snacks. This is because over the last two decades he’s been able to build it into a billion-dollar CPG snacking brand that sold to Mars, Incorporated for $5 Billion in 2020.
Bang Energy
During his time as a high school science teacher, Jack Owoc had a side hustle where he developed strategic nutritional and training programs. After noticing his clients didn’t lose weight one month after switching to a different egg white protein supplement, he decided to send the questionable product to a lab. Jack Owoc quickly realized that this supplement was garbage and he decided to enter the supplement industry by creating his own products. Throughout the 1990s and 2000s, Vital Pharmaceuticals (VPX Sports) went on to become one of the premier supplement brands in the growing sports nutrition industry. In the mid-2000’s, the company created a packaged beverage called Redline. This is what arguably paved the way for Bang Energy that was initially launched in 2008. The original version of Bang Energy hardly resembled its modern form, as it shared the Redline packaging and non-carbonated form. That changed in 2012 when Bang Energy swapped to a carbonated energy drink. That business pivot with the Bang Energy product turned it into the third-largest selling energy drink offering in the world.
