June 23, 2015
A report by Boston Consulting Group and IRI has found that since 2009 an estimated $18 billion (yep – with a B!) in sales revenue has migrated away from large consumer food brands to smaller companies. Why the shift?
Many argue that big brands are slow to adapt to change and as new food trends take hold, the big brands choose to sit on the sidelines and wait to see which trends will shake out and which will disappear altogether. This gives smaller companies a chance to come in and quickly gain market share in niche areas – more easily building brand loyalty and recognition and more easily gaining shelf space in retailers who are consistently trying to offer the consumer what they ask for.
Even when big brands do choose to play in niche markets, the bigger problem appears to be that consumers simply don’t trust big brands. Take this quote, which appeared in the May issue of AdAge as an example,
“Families once reliably heaped their plates with products such as Stove Top stuffing from Kraft Foods, Hamburger Helper from General Mills and Kellogg cereals, along with similar products from other processed food titans. But now those consumers are increasingly migrating to smaller, upstart brands that are often perceived as healthier and more authentic.”
Trust. Trust. Trust.
Consumers no longer trust big brands and trying to get that trust back is not something that’s going to happen overnight. And in the meantime, this is an enormous opportunity – unlike any before in the food industry I would argue – for smaller brands to really work to build that trust with consumers.
The Adage article was one of the best I’ve read on the industry in a long time and I highly recommend taking the time to read it fully because it speaks to things that impact all of us as food entrepreneurs. Click here to read the full article.