What are the issues that an emerging brand will face in getting to retail?
Emerging Consumer Packaged Goods (CPG) brands, which are relatively new and innovative in the market, often face several intangible challenges when trying to break into the retail space. These challenges can vary based on the specific industry, product, and market conditions, but some of the common intangible challenges include:
Brand Awareness and Trust: Established brands have an advantage in recognition and consumer trust. Emerging CPG brands need to invest in building brand awareness and establishing credibility to gain the confidence of both consumers and retailers.
Differentiation: The CPG market can be saturated with products in various categories. New brands must find ways to differentiate themselves from competitors and communicate their unique value proposition effectively.
Limited Resources: Emerging brand often have limited financial resources compared to established competitors. This can make it challenging to invest in marketing, advertising, and other initiatives necessary for retail success.
Distribution Channels: Access to distribution networks and retail shelf space can be competitive and costly. Building relationships with distributors, wholesalers, and retailers is crucial, but it can be difficult for new brands to secure these partnerships.
Supply Chain and Production: Maintaining consistent product quality and availability can be difficult, especially if the emerging brand experiences rapid growth. Issues related to production, inventory management, and supply chain disruptions can impact relationships with retailers.
Marketing and Promotion: Effective marketing strategies are essential to drive consumer interest and demand. New brands may struggle with developing and implementing successful marketing campaigns due to limited experience or resources.
Retailer Requirements: Retailers often have specific packaging, labelling, and compliance requirements. Meeting these standards can be challenging for emerging brands that may lack the knowledge or resources to navigate these complexities.
Negotiation Skills: Negotiating terms with retailers can be tough, especially for a new emerging brand. They may lack the experience and leverage to secure favourable deals regarding pricing, shelf placement, and promotional opportunities.
Consumer Education: If the product is unique or innovative, educating consumers about its benefits and uses can be challenging. Effective messaging and educational campaigns are essential to convince consumers to try something new.
Competition with Established Brands: Established brands have an advantage in terms of resources, market presence, and consumer loyalty. Competing with these brands requires a well-defined strategy and a deep understanding of the market landscape.
Changing Consumer Preferences: Consumer preferences and trends can change rapidly. Staying attuned to these changes and adapting the brand’s offerings accordingly is crucial for long-term success.
Long Sales Cycles: The sales cycles in the CPG industry can be long and involve multiple decision-makers. Navigating these processes while maintaining momentum can be challenging for emerging brands.
Addressing these intangible challenges requires a combination of strategic planning, investment in marketing and branding, relationship building, flexibility, and a deep understanding of the market and consumer behaviour. It’s essential for emerging CPG brands to have a clear vision, adaptability, and a willingness to learn and evolve as they work toward retail success.
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