Should Legacy CPG Brands Act Fast on Trends?
Have you ever listened to an old-school CPG industry professional share one of those “back in my day…” stories? Though you should definitely respect your elders and all that stuff your parents taught you…it’s hard to relate, right?
This is because you know this thing called the Internet disrupted everything!
Legacy CPG brands once had very high barriers to entry. The old system was setup to keep new entrants out, and consumers locked in. It was built around the trifecta of manufacturing, distribution, and advertising. This moat was very effective, until the Internet came along. Piece by piece, each one of these barriers came crashing down…
That’s enough disruption to make legacy CPG brands crawl into a fetal position, but the Internet also did something potentially more turbulent…it became a global means of communication in our everyday lives.
The result is that ideas, trends, and memes have become a rapidly moving wave that can easily overwhelm society. Content has become the currency of change where ideas are being exchanged, embraced, and evolved at breakneck speed. This is causing trend lifecycles to accelerate from years to months or weeks, which is deeply impacting the way everyone must do business in the CPG industry.
So, what happens when you pair the “lower barriers of entry” with “trend lifecycles rewarding agility”? It started to give emerging CPG brands a structural advantage. These more nimbler emerging CPG brands were able to iterate their product and/or positioning at lightning speed compared to legacy CPG brands. It was causing a “death by a thousand cuts” for legacy CPG brands or so we thought…
Should I Stay or Should I Go?
The first year of the pandemic era left almost all legacy CPG brands reinvigorated that “staying the course” was the right move. The “Covid-19 Effect” created massive levels of trial that were not anticipated for these long forgotten CPG brands. While the largest (aka strongest from a financial POV) legacy CPG brands have continued to see sustained growth in 2021 via pricing strategies, the marketplace is showing signs of reverting back to long-term patterns.
After these inflationary effects (and the coinciding competitive advantage) subsides, should legacy CPG brands again consider following targeted demand?
Trend vs. Fad
The basic question of “are we dealing with a fad or a trend?” has become increasingly difficult to answer.
- Fad = something that is very popular for a short period of time. Legacy CPG brands shouldn’t allocate planning strategies resources toward it as most customers will return to them after they realize that fad isn’t effective or cool anymore.
- Trend = something that should be taken seriously because it has proven to change the way consumers behave. These evolve more slowly over time and build gradually because they influence culture broadly, beyond just an individual industry.
That seems simple enough, right? Here lies the problem though in the Internet age…
Meaningless fads get amplified to a level that makes you question if it’s actually the early stages of a trend that you’re already late too!
Attack It or Not?
In a complex and overcrowded market, you are bombarded by trend watchers, blogs and social media posts all telling you how you should be jumping on the latest trends. This is a dangerous position for legacy CPG brands to be in for two reasons…
- Struggling legacy CPG brands tend to have already started to lose their brand identity
- Legacy CPG brands are not set-up to identify the right signals let alone the right workflow to monitor those signals.
Legacy CPG brands also have to contend with a business structure that lacks dexterity. Trend following is fast, simple, and for many emerging CPG brands it’s effective, but mostly because they are able to get in and out before it’s no longer value accretive. While trend following is in essence very easy to do, an odd thing happens to legacy CPG brands. This strategic move creates more complexity in the business because additional SKUs equal more resources needed across an already slower moving company.
When it comes to following trends, it shouldn’t be all doom and gloom for legacy CPG brands. They can be used in moderation and become very powerful if used as tools to strengthen what makes the legacy CPG brand special.
Lose Yourself
The real problem arises when a legacy CPG brand get into a cycle of following trend after trend after trend. Over the course of several months or even years, the legacy CPG brand actually strays from its own brand identity. And if they’re not careful, that can lead to the legacy CPG brand no longer having a unique selling point. Rely too much on the short-term transactional benefits of trend following and the repercussions could be dire, potentially resulting in business continuity risks.
Final Thoughts
The only constant in life is change, right? Legacy CPG brands must acknowledge that emerging trends popping up everywhere will be a continuous part of everyday business. Many trends come and go without leaving a lasting impact on how a legacy brand is perceived in the broader CPG industry.
It’s important to remember that trends are merely a tool. They won’t be the singular key to success for any legacy CPG brand. That said, legacy CPG brands shouldn’t be totally blind to consumer demand changes in the market. That’s why legacy CPG brands should attack the right trends when they resonate with customers and strengthen the unique brand identity.
