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The secret to thriving in the trillion-dollar CPG industry: A Q&A with Enjoy Life Foods CMO Joel Warady

The secret to thriving in the trillion-dollar CPG industry: A Q&A with Enjoy Life Foods CMO Joel Warady

Smaller companies in the consumer packaged goods (CPG) industry are quickly stealing market share from established brands. According to a March 2015 study by IRI Worldwide and the Boston Consulting Group, smaller companies have taken $18 billion worth of sales from larger companies since 2009. But that’s only the tip of the iceberg, since ecommerce and mobile shopping are just starting to find their footing in many different CPG segments like groceries and food and beverage.

Tweet this!Smaller CPG companies have taken $18 billion worth of sales from larger companies since 2009.  (CLICK TO TWEET)

The stakes are high in CPG, an industry which in the US alone is worth $2.1 trillion. The question that established brands find themselves asking is this: How can we effectively fend off upstarts?

For insight, we asked an industry insider. Joel Warady is chief sales and marketing officer of Enjoy Life Foods, the number one brand in the North American Free-From food and beverage marketplace, which includes products that are both gluten free and allergy-friendly. Leading the marketing practice in a company that has seen three consecutive years of 40 percent year-over-year growth, Warady knows what it takes to compete with CPG goliaths. In 2015, CPG giant Mondelez International acquired Enjoy Life Foods and left Warady in charge of marketing the brand that leads in the $12 billion better-for-you snack food category.

In our Q&A below, Warady shares what’s fueling the growth of Enjoy Life Foods and what big CPGs can do to compete with hungry and nimble upstarts.

VC: What business challenges are unique to the CPG space?

Warady: Building brand loyalty has dramatically changed. Loyalty still exists, but long-term loyalty is less sustainable because consumers are more willing to try new products.

Having a great product is no longer enough. CPG companies need to create interesting brands. To do that, they need to create what Saatchi and Saatchi CEO Kevin Roberts calls “lovemarks.” You want people to be emotionally tied to your products and services, to be part of their everyday lives. That’s not necessarily easy to do in the CPG space, where differentiation is hard to achieve.

Brands also need to stop thinking of themselves simply as manufacturers. CPG companies need to embrace social media and sharing platforms, and they need to act like publishers. To be meaningful, brands need to be part of the consumer’s life. Providing valuable content and being available where consumers are could help CPGs achieve that.

VC: More and more smaller brands like Enjoy Life are seeing impressive growth in the CPG sector. What’s behind the success of these companies?

Warady: It’s critical to note that not all upstarts in the CPG succeed. The reality is that most small CPG companies fail within their first few years of existence. In my experience, the small companies that disrupt the CPG goliaths are those that constantly communicate with their consumers, those that are responsive and those that tell a compelling story in the market.

In the case of Enjoy Life, our success is a result of a rethinking of our marketing and go-to-market strategies. A few years ago, Enjoy Life committed to becoming truly consumer-centric. Whereas we used to simply be concerned about putting products in shelves, we started to shift our thinking to put the focus on consumer needs. Engaging with our customers and talking to them directly became a priority. We did this before tablets and smartphones became ubiquitous, so our initial dialogue with consumers happened while they’re in the grocery aisles making their decision.

Another crucial aspect of Enjoy Life’s success is making sure that our customer engagement approach could evolve as platforms changed. Today, we’re looking at things like Snapchat and Periscope as part of our digital strategy. But at its core, our approach puts the consumer in the center regardless of the platform. Our strategy is platform-agnostic.

Getting our consumers to help us tell our story is also effective. Through user-generated content, consumers become part of the Enjoy Life story.

VC: How can customer insight help CPG companies thrive today?

Warady: Success in the CPG space requires a deep understanding of the consumer. That’s where consumer research can help. If you know the consumer well, you can better target your message. Insight helps make your marketing programs stand out.

Where customer intelligence is particularly important is in helping companies make sense of all the data available. Getting insight from data is a classic business problem: the concept of Big Data has always existed, but we just gave it a fancy name today. The problem is that companies have tools that give them a tremendous amount of data. But while companies are drowning in data, they’re actually thirsty for insight. The big challenge for companies when it comes to Big Data is how to filter out what’s unnecessary—to uncover the handful of data that can actually move the needle.

The key is to get a more complete picture: to marry demographic, transactional and research data and gain a better understanding of the consumer. Enjoy Life’s success is in no small part to the fact that we engage with consumers consistently on a one-to-one basis. Engagement helps us better understand the empowered consumer.

VC: What are the biggest opportunities for CPG companies (both big and small) in the next few years?

Warady: There’s a big opportunity to reach the more health-conscious, more informed consumer. People today are changing the way they live their lives. They’re becoming more conscious about what they put in their bodies. They’re more concerned about the toxins they put on their skin.

There’s also an opportunity for companies to be more open and honest. Consumers today do a lot more research when it comes to their purchases. Transparency can’t be just a buzzword. It has to be real cultural shift.

Getting to market a lot quicker is another opportunity. The attention span of the consumer today is much shorter. Companies don’t have a lot of time before consumers change their mind. Product innovation needs to be a priority for brands. To innovate sooner, companies need to access and act on consumer insight a lot sooner.

Having a consumer-centric culture is invaluable for CPG companies. Technology is an important tool that can expedite things, but a consumer-centric mindset will enable CPG companies to take advantage of the opportunities in front of them.

VC: In one of your recent tweets, you mentioned that marketers need to continue to evolve. What do aspiring marketers in CPG need to do today in order to remain relevant in the next decade?

Warady: Marketers need to keep up with the tech-savvy consumer. Not every marketer has to tweet or to Snapchat, but they have to engage within those technologies and they have to understand where those tools fit in the marketing strategy.

Looking outside your own industry is also critical, particularly if you’re in the CPG space. Get out of your own world and check out stores that have nothing to do with your product line. Personally, I look at developments in the media space. I look at how companies like Hulu and Netflix are changing how brands like HBO market their shows. I look at technology and the emergence of the Internet of Things. Observing how other industries are being disrupted can give you insight on how to disrupt your own industry.

Finally, CPG marketers, more than ever, need to embrace a startup mentality. Act like a tech company. Experiment and be open to fail. Consumer engagement can help with that as it allows you to test ideas and quickly see what resonates with your consumers.

It all comes down to nurturing a consumer-centric culture. As long as marketers put the focus on the consumer, they can evolve with the market.

Conclusion

To learn about the new threats facing the CPG industry and discover what it takes to thrive, join Warady and Nick Stein, senior vice president of marketing at Vision Critical, in How to Win Back Fickle Customers: Lessons from the War Between Big CPG Companies and Small but Powerful Upstarts, a live Vision Critical webinar on May 7, 2015. Save your spot today.

How to Win Back Fickle Customers: Lessons from the War Between Big CPG Companies and Small but Powerful Upstarts



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