THE CASE FOR HIGH VALUE VS. HIGH VOLUME
While Amazon gobbles up Whole Foods in a “bigger is better” movement toward grocery consolidation, the Fancy Food Show 2017 demonstrates that when it comes to innovation, special and smaller is the future.
In the waning days of June, the food industry was aflutter with David vs. Goliath analogies as Amazon announced their intention to purchase Whole Foods. Amazon ambitions dominated conversation, with this acquisition clearing the way for them to become a $1 trillion business, as breathless analysts projected the stock to top $2,000 in 2019.
Chalk one up for the “bigger is better” high volume players like Amazon.
The Seattle-based behemoth combines retailing, content, and data collection with unparalleled operational competence, and they are on a roll. Many say even Walmart is quaking. Amazon’s intention to gobble up Whole Foods, the modern grocery curator of local, organic, high quality, fresh foods, has some worried that Amazon--which has rarely shown, if ever, a desire for decentralization--will roll over the local producers and drive them out of business.
PROGRESS DOES NOT MOVE IN A STRAIGHT LINE
Not to worry. If there is one thing we know from our experience in marketing and business, is that progress is rarely a straight line from point A to point B, but rather a zigging and zagging, a waxing and waning, of embracing change and resisting change. For every cultural movement there is an equal and opposite cultural movement afoot. So while many bemoan what they imagine will be the commoditization of grocery at Amazon and wiping out the little guy, we also know that this merger creates opportunity for the small, specialty items, imbuing them with greater worth by being original, one-of-a-kind or new-to-market. It’s classic human nature: people want what they can’t have. It’s classic business strategy: short supply increases demand.
And so to work; as the Amazon news was hitting the press, Sugar Hill Strategy visited the annual Fancy Food Show at the Jacob Javits Center. This show drew more than 2,500 food producers, displaying more than 200,000 products in the $127 billion specialty food industry. The product intelligence gathered at this show is not solely relevant to food clients, but provides direction on: a) nascent movements in culture; b) changing dynamics that drive higher worth and premium experiences; and c) creative innovation in packaging, design and communications.
THE SUMMER FANCY FOOD SHOW 2017 TOP TEN LIST:
Unleash the Power of Place
1. Place and provenance are powerful reasons to believe, to prefer and to buy premium products today. In an increasingly digital and virtual world, and at a time when our culture is uprooting itself from historical alliances, people put a premium on the tangibility of place, roots, origins. The Fancy Food Show is an homage to the power and beauty of place from a goat farm in Wisconsin to a Meyer lemon grove in Morocco. This brand, Brooklyn Bean Roastery, features Keurig-ready coffee in a variety of roasts.
Celebrate Your Creators
2. Your creators, originators and designers are your secret ingredients; shine a light on them. Data and algorithms help inform your decision-making and pinpoint areas for enhanced efficiency, but people are the secret ingredient in making your products and propositions worth more. This "creator" movement gained momentum with the rise of cooking shows and celebrity chefs and has led to personality and place-driven lifestyle brands like Beekman 1802. Powered by Josh and Brent, aka The Fabulous Beekman Boys, these company founders chucked their media and advertising gigs in the city and moved to the country to work the land, restore a building and make beauty bars from goat’s milk. Today they are a beauty company, a fine foods company, a media company and a profitable lifestyle brand.
Freekeh and Za'taar: Everything Old is New Again
3. “Ancient” is the new “New”. There is tacit wisdom in history, and there is value in the older ways of doing things. 60% of the Palestinian people are rural olive farmers, proud of their heritage at the cradle of civilization. The olive trees on these farms are 2,000 years old, farms that have been in the same family for seven-eight generations. These families have seen fortunes rise and fall with the value of olive oil. Canaan is a Palestinian cooperative that brings rural farmers together behind a mission of regenerative farming and sustainable practices. This cooperative also organizes community meals as a beacon of hope rooted in their agricultural bounty. They were showing their spices at this show. Za’taar is an ancient Palestinian staple, a blend of oregano, sumac and sesame, often mixed with olive oil and served on cracked bread.
The Return of the USP (Unique Selling Proposition). Hint: get one
4. Have a purpose that fits your business perfectly. Often purpose gets confused with social programs or cause marketing, but a great purpose should uniquely serve your brand. Maple Hill Creamery has it all going on. They have the provenance story. They have great design and products. Importantly, they have a point of view: they are decidedly pro-grass and proudly claim their milk is from 100% grass fed dairy, available in yogurt, kefir, cheese and liquid milk (their term). Their purpose is executed in a breezy, irreverent way, a point of difference vs. the early earnestness of the anti-synthetic, anti-hormone dairy revolutionaries. For example, they claim “grass is not just for hippies anymore” and “I like my animals to be free, like I am.”
5. Regional farmers could be the new .com millionaires. Angel investors and private equity are flexing their muscle across the heartland. Maple Hill Creamery is a great example of how a company has gone from stovetop to private equity in eight years. When they humbly began, Bear Stearns and Lehman Brothers had imploded, AIG was hobbled, and ordinary people had taken to checking their declining 401 (k) balances daily. How they did it:
From Stovetop to Board Room in Eight Years
a. Secure supply chain: created a consortium of over 70 local farms committed to grass-fed practices;
b. Branding: hired OffWhite, the design firm who created the simultaneously clean and information-rich brand identity and award-winning website;
c. People: hired people from the successful Chobani brand; people who knew the category, how to build the business and importantly, understand and abide by brand purpose and strategy;
d. Financing: in late 2016 Maple Hill creamery secured financing from Boulder-based Sunrise Strategic Partners, a strategic equity firm made up of a dynamic brand expert and a gaggle of ex-Lehman financiers.
Form Innovation is a Way to Add Excitement and News to an Old Standby
6. It’s never too late to innovate; form changes are a great way to bring fresh thinking and an innovative spirit to your brand. A northern Italy company, Terra del Tuono, is over 100 years old, and is owned and operated by the same family who originally settled in this region because the microclimate between the Secchia and Tresinaro Rivers was ideal for grape growing. They continue to explore and invent to this day with proprietary new—and award-winning--products like their balsamic sphere, a form innovation that enables you to grate balsamic flavor. They also make caviar-like pearls of balsamic vinegar that burst in your mouth. A great example of how an esteemed heritage brand can reinvent itself again and again, but remain true to their original purpose.
Brand Equities are Meant to be Stretched. These are Artful Confections from the Guys at Kohler (faucets)
7. Brand equities are meant to be stretched. Who would have imagined that a company known for faucets and sinks—Kohler—would line extend into fine chocolate and other hand-made confections? In this case, a CEO’s passion to create the perfect turtle led to the development of a chocolate/confection business. These Kohler chocolates are miniature works of art, encased like jewels behind the counter. Names like Platinum and Rare Facets complete the metaphor. How did the equity stretch this far? High design standards and a commitment to craftsmanship served as the bridge between plumbing and confectionaries. This year, their innovation was the artfully designed and executed Butterscotch Hop.
Hot Sauce is an Annual Lightning Rod for Creative Ideas
8. Hot Sauce continues to be the playground for creative positioning and packaging. In 2016, we loved the Hot Sauce rooted in the legend and lore of Ernest Hemingway (example: The Bull Hot Sauce, and The Sun Always Rises Bloody Mary Mix). This year, we were enthralled with a hot sauce which had its roots in the infamous Army-Navy tailgating competition. Developed by ex-Navy Academy veterans, paying homage to a two-star General buddy, with jalapeno peppers sourced from Louisiana and packaged in grenade canisters with names like "Shock and Awe”, you get the sense these guys aren’t playing around. And they do mean business. They create jobs for veterans and donate generously to organizations that support troops, veterans and their families. Their tag line? “A great sauce for a greater good” ™. They walk the talk.
Align Yourself with Cultural Movements: Follow the Diet Trends
9. Cultural relevancy can super-charge your product appeal....in the case of foods, being on the side of the latest diet puts you in good company. First there was the South Beach Diet, then the Paleo Diet...today it’s the Keto Diet. The South Beach Diet arrived on scene during the bull market of the early 2000s, a time of the fashion/luxury cultural potency. This gave way to the authenticity of the post Wall Street crash years, with the caveman/paleo diet of the past decade. Today, we see a highly scientific, quasi-pharmaceutical approach to dieting with the Ketogenic diet which also comes with purported “euphoric” side effects. This high fat/low carb approach is boosting sales for products like coconut butter, which provides 90% of your daily saturated fat with only 3% carbohydrate makeup.
Marketing Tea as a Populist Standard-Bearer
10. Populism isn’t just for politics. A narrative that feels authentic, products that are for the people and by the people and a look, tone and feel that is “down to earth” are all touchstones of some of the newer offerings.
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