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January 13, 2020
The typical grocery store has somewhere between 30,000 and 60,000 SKUs on its shelves and in its doors. There have been a million studies on what variables go into purchase intent and decision making as consumers roam the aisles. One that has always stuck with me is “3-feet in 3-seconds.” That is how quickly they are making their minds up. In other words, it is really, really hard to drive discovery at retail.
The options that do exist are all suboptimal. They've been monetized by retailers and distributors alike, and, therefore, are capital inefficient. OIs, TPRs, IRCs, pick your acronym they all stink and have significant trade-offs. So, what do you do to drive discovery? I think you move some of your efforts outside of the retail channel. Crazy, right?
You have all built products that solve problems and/or fill unmet needs for consumers. Yet, it's rare while strolling the aisles of a grocery store that the average consumer finds themselves suffering from the problem you're solving or feeling the need you’re meeting.
If you are going to drive discovery in a capital efficient and effective manner, you need your products to be where the problem is most pronounced and the need most acute. That is where an alternative channel strategy can be a real difference-maker.
As humans confronting first world problems, we tend to suffer from our wants and needs where we live, work and play. This includes our offices, cars, gyms, airports, hotels and more. You get the point.
If I’m eating a plant-based diet, rushing through the airport in search of a snack, I can take on the plane with me. I am not wanting to wait until the next time I go to Whole Foods to find a suitable solution. I want to walk into Hudson News and have it right there available for me on the shelf. If it works and I like it, I am going to buy it again and again including on my next trip to Whole Foods.
For whatever reason, many brands don't build an alternative channel strategy until they are more mature and have larger teams and more resources. I think that is getting it backward. When you are a young brand, cash is king, and your ability to deploy it wisely and make it last as long as possible can be the difference between the success and failure of the business.
Building business in alternative channels is not simple. It is more disaggregated than retail, and because they don't carry 30,000 to 60,000 SKUs, they will say no a lot more. The distribution model is different, and the sales cycle is long. Still, with all of that said, I would encourage every young brand to examine how alternative channels can help them drive discovery.
If your consumers aren't interacting with your products, using them and telling their friends about them, you'll never get real traction. I've seen hundreds of products and brands get lost in the sea of SKUs in retail grocery. They try spending their way to visibility, but it rarely works. Driving discovery through alternative channels delivers both revenue and brand awareness. I highly suggest you make it a part of your go-to-market plan.
Elliot Begoun is the founder of TIG, a practice focused on helping emerging natural product brands grow. TIG positions CPG brands to raise capital, prove velocity, gain distribution and win market share.
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Founder, TIG Brands
Elliot Begoun is a 30-year industry veteran, author, podcast host, founder of TIG Brands, and champion of Tardigrades. TIG Brands supports a community of entrepreneurs interested in building nimble, capital-efficient, resilient brands that become Tardigrades, not Unicorns. Learn more about TIG Brands’ programs here and catch Elliot at FoodBytes, the Hirshberg Entrepreneurship Institute, and the Natural Products Business School. Tune into the TIG Talks podcast and find Elliot’s articles in publications such as The Huffington Post, SmartBrief and New Hope Network.
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