The packaged food industry has seen substantial growth in the last two years and it looks like the trend is here to stay. With more consumers opting for the ease and safety of packaged food items, the market is booming with opportunities for CPG brands.
But with opportunity comes participants. Food companies have all been vying for consumers’ attention since the start of the pandemic, creating a fiercely competitive landscape. So how do you stand out? You get help.
A CPG partner can help you with everything from performing market research and identifying market trends to planning a product launch and finding retail partners. Let’s take an overview of the CPG market as a whole to see how the major changes of the last two years has made having a partner in marketing more important than ever.
CPG Market Research Shows the Future of Packaged Goods
The future is bright for CPG brands. In fact, the industry is expected to grow 7.43% in the next five years. This is in large part due to the continuous innovations in the industry over the past few years—an influx of new products, reducing redundancies in supply chains, and a focus on eco-friendly food packaging. The COVID-19 pandemic also started a movement toward purchasing more packaged food products, which has persisted as the world returns to normal.
Consumers are even starting to define themselves in more specific terms as food trends point to more than just an interest in the products. Buyers are now looking for brands who care about sustainability, social causes, or the environment. They want purpose-driven brands that reflect their personal values.
The products haven’t completely fallen out of the spotlight, though. In fact, food manufacturers are shifting their efforts to meet an increased focus on personal wellness. People are looking for more plant-based options than ever before in everything from grab-and-go snacks to ready meals to frozen foods. Those who have chosen a specific diet like keto or paleo are looking for products that cater to their chosen lifestyle.
This market growth and change in the industry has generated more competition than ever, with even key players like General Mills, Kellogg, and Nestle vying to stay at the top. Many CPG brands don’t have the power or marketing budget these long-standing names do, though. That’s why they’ve started tackling the issue through a new business model: partnerships.
What a Packaged Food Partner Can Do for You
Most people still get all of their food from grocery stores, but pandemic lockdowns started a push for purchasing online. As digital retail space became more populated, emerging brands had to find ways to combat major online retailers like Amazon. Partnering with other brands, retailers, or agencies to help them boost brand awareness and capture new leads gives smaller brands a better chance at capturing their target audience first.
Tapping into the global market of online consumers takes a bit of know how. Brands need to cater both to the informed buyer and the impulse purchase. This means clear, concise messaging and intelligent product placement. For example, if you’ve partnered with a retailer to sell your product on their website, you might angle to be a featured product at the top of the category page. A catchy (yet informative) tagline could be: “A plant-based snack packed with protein.”
Working with retailers means more than just great product placement or a market share, though. It also gives you an avenue to cater directly to customers’ needs. When someone purchases a product through the website, it can either be fulfilled by the brand or the retailer with options for delivery or pick-up. This promotes sales for both businesses and makes it easy for customers to engage in whatever way is most convenient.
As sales spaces and value chains are continually consolidated, consumers will keep looking for everything they need in one convenient location. This means your previous CPG competitor might now be a valuable partner. You want to look for strategic partnerships that put your product in front of relevant audiences. Cross merchandising opportunities are a great reason to partner. If you have a breakfast cereal brand and join forces with someone who sells dairy products, you can meet all the customer’s needs at once.
This task isn’t always easy, though. You might not find any brands that share your mission or values. Plus, it can be tough to convince competitors to work with you instead of against. That’s why it’s important to have another type of partner. A marketing partner.
A Digital Agency Can Put You Ahead of the Curve
The CPG industry has held a significant growth rate in the last two years. The online sales of CPG foods accounted for 8.2% of market sales in the second quarter of 2020. That was a 2.4% increase from the first quarter and the largest quarterly increase since 2018.
The growing demand for online retailers and purchasing options means CPG brands have to find new ways to market their products. Now locally sourced baby food made in Small Town, USA, is part of the global packaged food market. A CPG marketing partner can help brands navigate the online space, as well as make strategic decisions based on market reports.
Overall, there are six major benefits to hiring a CPG marketing agency:
- More than marketing
Most CPG partners focus on more than just marketing. They can help you evaluate other partnerships, guide product development, negotiate retailer contracts, scale your brand, and even manage your bookkeeping. They’re a business partner that can lend a helping hand in all aspects of your brand. - Reduce costs
It takes money to make money, right? But that doesn’t mean your marketing budget should break the bank. Hiring a CPG agency is often significantly more affordable than employing an in-house marketing team. Contract pricing offers predictable rates and makes it easy to build expected costs into your budget. - Access to the latest and greatest tech
Just like with any industry, there are different packaged food market sizes based on the size of your brand. With a CPG partner, the smallest companies can get access to enterprise-level technology and analytics. They can build their business on strategic insights and reap the benefits of tools they might not have afforded on their own. - Increased efficiency
When you delegate an entire department to a competent partner, it leaves you free to worry about the more important parts of your brand. A CPG agency will approach its tasks with professional methodologies and strategies while you find new avenues for success. You can focus your time on fostering growth and have employees fully invested in their roles, which will make you a more efficient enterprise. - No training
It takes time and energy to train a team to run your social media, express your brand voice, and analyze your sales data. Instead of spending time and energy training new hires, allow your CPG partner to utilize its experts. They know the ins and outs of your industry and can hit the ground running. - Scale your brand
Now that you have all this time and money, plus an expert on board, it’s easy to scale your brand to the heights you’ve always envisioned. Maybe you want to push into Canada and take North America by storm. Or you have lofty dreams of becoming a global packed food brand with your products in Europe, Asia, and Latin America. With a CPG partner on your side, you’ll be able to take the first step to growing your business.
With the way of the world changing, it can help to have someone knowledgeable in your corner. If you're interested in having an all-in-one CPG partner, contact us today!
Vdriven
VDriven is a CPG partner for modern brands that improve our daily lives. We fuel your growth and innovation by giving you strategies and support in every phase of the retail process.
