SME & start up FMCG brands – cutting through in a crowded market place

Australia could well be one the smallest FMCG markets in the developed world along with New Zealand with the highest ratio of brands lobbying for a slice of the pie.

So how do you win? The biggest three challenges I see and hear frequently are:

A lack of understanding regarding the consumer.

Who is my primary target consumer? What do they do each day? Age and gender are less important today but the consumers lifestyle and what they do each hour of the day is far more valuable to learn.

Very simple ongoing low cost focus grouping is critical as this will enable you to continually learn and then test the learnings…. test, learn, test, learn and then repeat! Apart from saving significant time and money you are more likely to get it right first time.

A lack of understanding of the actual cost, time and effort it takes to truly embed a brand into our market.

This is applicable for start up brands whereby the true cost of running a business is almost always far greater than planned! The Australian geography is a key element of this challenge with warehousing distribution and logistics making trading in this big brown land of ours costly and tough! 

Often pricing is set to ensure there is adequate margin for the brand however the pricing itself is simply not going to create adequate volume to create a viable business.

Conversely If retail pricing is set to drive more volume and compete then the brand and margin often isn’t adequate to create a sustainable business either.

So how do you win? It is critical that in the very early stages of developing a new brand you work on the commercial viability through driving all costs down including ingredients, packaging, resources and of most importance develop a plan where the product is touched as few times as possible to reduce logistics cost. Lower margin products can work as long as the business operating costs are low also!

Differentiated light weight, low cost, high perceived value products with knock out branding and a great story will optimise the chances of cutting through. A great example of lower cost high perceived value would be the recent popcorn boom. Very light weight product, lower cost with large family bags weighing 100 grams and retailing under $3.00 in some instances.

Differentiation and NOT trying to be being better is critical as is ensuring you are going to meet a consumer need not yet met or better still create that consumer need through innovation and stand out attention grabbing packaging and marketing strategy.

Free from dairy, gluten, sugar, nuts and of course any brands going down the Vegan and Keto path will be part of movements here to stay.

A lack of understanding about the importance of BRAND vs product

Brand trumps your product every time. If we assume that the product is of excellent quality then brand is by far the most important element. There are three elements to brand and all not well understood in my view.

The essence and meaning of the brand. If you took your product away what would your brand stand for? A great exercise is to select three words that truly represents your brand. All Communication and imagery link back to those three words. A great way to stay true to your brand.

Packaging look, feel, design and functionality. Too many brands just copy the best that is out there which results in “blending in” which is never going to cut it.

Differentiation in everything is critical and subsequent “getting noticed” is key. Look at the success the FCUK ( French Connection UK) fashion brand has had over the last 20 years.

I am not suggesting an extension of the swear word vocabulary however a good example of branding that gets noticed. The purpose element of your brand is increasingly important also. What are you doing to make the world a better place or help communities in need? Very important especially through the eyes of our millennial community. 

Take on board consumer and any feedback and adjust your strategy accordingly in the very early stages to reduce your risk and exposure.

For the Sydney folk – Join us on 24th Oct for our Sydney Food and Beverage entrepreneurs networking night with David from H2 Coco, Jamie from Slim Secrets and Angie from Swirlit. Learn and network with like-minded entrepreneurs.

Register for the networking night here.

David Burns is the founding partner of DJB Food Group who supports and assists food and beverage brands in reducing their risk and optimising growth.

David has a diverse background across hospitality and retail in Europe and Australia having spent 10 years at Coles and with BP Australia where he led the team in the development of the Wild Bean Cafe concept back in 2004. 

David has worked with over 50 brands over the last three years including some great success stories like Remedy Kombucha.

www.djbfoodgroup.com

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