Kevin Ryan's: Culture Matters

The End of Ambiguity
Last week, Amazon posted a large black banner on their gateway proclaiming, “Black Lives Matter” and stating that “Amazon stands in solidarity with the Black community."  In an Instagram post later in the week, Jeff Bezos showed an email exchange he had with an irate customer who all-cap typed, “ALL LIVES MATTER,” and took Bezos to task for the company’s statement, saying that she found it “disturbing” and “offensive.” Bezos included his response in the post,” “I have to disagree with you. ‘Black Lives Matter’ doesn’t mean other lives don’t matter. Black lives matter speaks to racism and the disproportionate risk that Black people face in our law enforcement and justice system.” He ended his email by saying, “I want you to know I support this movement that we see happening all around us and my stance won’t change.” He then linked to a page that explained how Amazon was donating $10 million toward organizations supporting justice and equality.

So What? In 2016, #BlackLivesMatter hit the national scene with the killing of two black men by police (Alton Sterling in Baton Rouge and Philando Castile in Minneapolis). Brands were mostly silent. Uber changed their logo to a peace symbol and Spotify created a playlist for justice, but most brands felt the issue was too polarizing to touch without sparking anger in some fraction of their consumer base.

Today that is reversed. In fact, the brands that are silent are the ones that stand out. While several companies that have made statements have been pilloried for their apparent hypocrisy (e.g. Amazon has come under fire for their own human rights issues and partnership with police and military surveillance), significantly more criticism has been leveled at companies that say nothing or who have offered vague comments ( e.g. Target didn’t mention racism at all in their initial statement—they have since come out supporting #BlackLivesMatter and donating $10 million for social justice reform).

One cynical view of this recent change of voice for companies is that they cannot afford to be embroiled in controversy on top of the negative effects of the pandemic. The more optimistic side is embodied by Reed Hastings, the CEO of Netflix, who tweeted recently, “to be silent is to be complicit. Black lives matter. We have a platform, and we have a duty to our Black members, employees, creators and talent to speak up.”

However, I think the true reason lives somewhere in between. I think the reason we are seeing so many corporations vocalizing their stance is because they can’t afford not to have a relationship with consumers. Whereas, even just a few years ago, companies could operate under the belief that their role in society was simply transactional, that a corporation’s stand on an issue wasn’t really germane to the selling of a can of soup or bottle of soda, today that’s gone. Today, a brand’s market cap is based on the strength of its consumer relationships, living and dying via the sentiment created by Instagram influencers and the interplay of brand/consumer communications.

And relationships cannot survive ambiguity. The deeper the bonds that brands attempt to make (e.g. being ‘lifestyle brands,’ going DTC, etc.) the less they can stay on the fence of any issue. They cannot have it both ways—enjoying the rewards of a deep relationship and not coming out and voicing an opinion. One requires the other, and it might require much more. In the coming months we will see how much follow-through consumers will demand of these stances, how far the authenticity needs to be, how un-ambiguous brands have to make themselves to be seen as authentic. 
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From 'We' to 'Me'
After social distancing became commonplace, Hershey saw declines in breath mints of 40%-50%.  To combat this, the company launched new creative for their Ice Breakers brand mints including a TV spot and social media labeled #MintBeforeYouMask. The campaign repositions mints to combat ‘mask breath,’ suggesting consumers pop a mint each time they pop on a mask.   

During the early stage of the pandemic, 1-800-Flowers saw a massive decline in sales as their large social and celebratory events were canceled.  Instead of redoubling their efforts toward couponing or ads, the company took another approach and launched Connection Communities. This peer-to-peer online support portal serves as a venue for 1-800-Flowers’ clients to share stories with each other by connecting people with similar experiences. The site has eight separate communities that discuss and counsel on Coronavirus Anxiety, Increasing Happiness, Loneliness, Coping with Loss, Relationship Advice, Motherhood, LGBTQ+, and Caregiving.

So What? Before the rest of the team jumped onto a Zoom meeting the other day, a client and I were chatting. Of course, the conversation centered on the only thing we all talk about these days—how we are dealing with the pandemic. “The most surprising thing I’ve done,” my client admitted,” was I spent a fortune on a new camera and a ring light.” When I joked about how he must be the envy of his team now, he said something remarkably honest and interesting. “I bought it more for me. I’ve never stared at my face as much as I have in the last few weeks and I wasn’t loving what I was being confronted with.”

One of the quantum leaps of 20th century marketing was the strong use of social pressure as a sales tool. While people throughout history have always been trying to ‘keep up with the Jones,’ the speed and ubiquity of new media made consumers hyper-aware of even minor faux pas in social decorum.

Companies were quick to inflame (and even invent) these issues, only to turn around and sell consumers on products that kept them trendy and stylish and avoided embarrassment. For example, Listerine is famous for medicalizing and stigmatizing bad breath (aka halitosis) and then offering their brand as the solution:
For the last ~60 years, selling answers to alleviate social stigma has become a common lever (see every issue of Cosmopolitan magazine), but in the last few years something has started to shift. Technology has advanced, we’ve tightened our social circles, and our societies have stigmatized social stigma.  Calling anyone out for being different has been elevated to a national concern (e.g. bullying, body shaming, etc.). Living up to the standards and norms of societies greater ‘we’ might be at its lowest in history—and then the pandemic took us all away from the crowds, focusing even more inwardly.
I think we are going to be seeing a major flip in product marketing, less about ‘badge’ brands, less about following big trends , and more about satisfying the ‘me.’ The next 5 years will likely be remembered as a golden age of product personalization, but also a time when major brands flipped their messaging to focus less on others and more on the individual.
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Packaging Innovation for the Win
Green Wagon Foods, a new MN-based company founded by two food industry veterans (George Abide, a longtime food industry consultant and consumer researcher, and Peter Erickson, former Executive Vice President for Innovation, Technology and Quality at General Mills), is test marketing their first product: Steam Mates. The product consists of a steaming bag and seasoning mix. However, unlike many other products on the market, Steam Mates steams in paper, not plastic. Available in four varieties: Butter & Herb, Teriyaki, Italian Herb, and Lemon Pepper.   

Impossible Foods has opened a new online store selling their plant-based ‘meats’ direct to consumers. In addition to selling the packs now popping up in retail, the company is also selling large family packs—10 lbs. of ground product or 20lbs of pre-made patties. Every order comes in compostable and recyclable packaging.  

Both Jif (a Smuckers brand) and Skippy (a Hormel brand) announced squeezable versions of their popular peanut butters last week. Jif launched Simply Squeeze pouch with a creamy variety, whereas Skippy launched their pouches in both creamy and natural.  

Virginia-based startup LifeFuels has launched a subscription service for app-connected, personalized hydration bottles. The company sells ‘smart nutrition bottles’ which communicate with consumer’s personal devices and dispense precise amount of flavoring and electrolytes. The subscription service sells FuelPods, concentrated inserts that deliver benefits like ‘Immunity,’ ’Natural Energy,’ or ‘Electrolytes.’ Each bottle can deliver up to 90 beverages from each charge of three FuelPods.   

Mondelez has announced that, starting in 2022, their Philadelphia cream cheese packaging will be made completely with recycled materials. Working with Berry Global Group, Mondelez reported that the packaging will use new technology that turns discarded plastic into food grade material.    

So What? When people think about innovation in food and beverage, they immediately think of new flavors. In fact, when I teach teams about innovation this is one of the first mindsets I try to remove. Getting on the same page about what ‘innovation’ is, is one of the first steps in doing innovation right. If your boss says, “we need to be more innovative” and she thinks that means developing a new business model and you think it means creating a new line extension, there will be trouble.

You can innovate on lots of vectors up and down the supply chain, but one area many people forget about is packaging. In fact, if they think about it at all, it’s for cost reduction, removing mils of plastic here or paperboard there to balance margins. And to be honest, I don’t blame them. Most of food and beverage packaging appears perpetually relegated to boring rectangles and cylinders dictated by immovable store shelf heights and standard shippers. However, I think that’s about to change.

I’m predicting that packaging will be one of the fundamental areas of innovation post-COVID. In the next 6-12 months, CPG companies will gain incrementality and a few crucial points on their base business, not by introducing new flavors, but by tweaking their packaging. Here’s why:

Safety and Hygiene: Even prior to the pandemic, we were seeing a rise in consumer concern about food safety, but COVID has amplified this to record levels. Not only has it raised the specter of contamination from other consumers or employees, but issues at production facilities have opened a Pandora’s box of concerns along the whole supply chain. Therefore, not only will this lead to packaging innovation that gives consumers confidence that their food wasn’t contaminated post-production (see the new biodegradable ‘skins’ that will encase drink cans, make-up counters transitioning to single-use samplers (versus a communal brush) and everything bulk—from olives to nuts—is being put into containers) but I think it will lead to a heightened concern around safety and ‘contamination’ in general. I think we’ll see more packaging innovation that moves away plastics and other compounds—especially those where the food is cooked in the container or touches sensitive foods (e.g. children’s’ food).       
Value for the Moment: When people think ‘value’ and CPG, their mind usually goes to bulk sizes. While that can be a good solution for some companies (especially companies like Impossible as they try to level up to the applications of meat) it shouldn’t be the only consideration. Yes, bulk sizes of breakfast cereal or potato chips tend to be cheaper per ounce, but per container they are usually more than normal-sized packages. If you are strapped for cash, which many people are in the current economy, stocking up and saving money might be ideal but far from feasible. Strangely enough, for someone pinching pennies before payday, paying more ounce might actually be the responsible thing to do in that moment. For example, if a mom can’t afford to buy a huge box of garbage bags for the household, but desperately needs 2-3 bags to make it through the week, paying more per bag (but less compared to a big box) might be better than going without. Therefore, the garbage bag manufacturer that sells a package of 4 bags at the dollar store is not only securing an impressive margin, they are filling a niche. My tip to you is to think deeply about value packaging—there is amazing innovation here.    

Delivery Ready: Back in 2018, P&G was one of the first companies to change the size and weight of their packages to be more ‘online-friendly.’ Since then, companies have begun to alter their packages—making them lighter and easier to open-- or risk being fined by Amazon. If the industry maintains only a fraction of the online grocery delivery increase we’ve seen in the last few months, there will be an huge push for more delivery-ready packaging innovation. Not just to make packages lighter but also to make them easier to be sorted by the robotic packers at companies like Ocado (and soon at Walmart). In fact, if a product is just ordered online, the entire package and brand design is open for reinterpretation. If its only going to be ‘displayed’ in home pantries, versus store shelves, how would that change the design?

At Home Convenience: Convenience is one of those words like ‘health’ and ‘value’ that should always make you ask for further clarification. Convenient for what? For whom? For when? If I were designing a ‘convenient snack’ for a daily commute, it would look much different than a ‘convenient snack’ designed for eating at home. Additionally, easier to use product packaging can increase usage occasions. For example, Jif and Skippy are responding to the increased use of peanut butter not just as a sandwich spread but as an ingredient. By changing the packaging, they are increasing the possibility that someone will use their products in smoothies, in cooking or as a topper on yogurt. If your packaging removes the need for a utensil, it removes a step of friction. As our lives change, our convenience needs change and packaging innovation will be needed to deliver.      

Personalization: I sometimes jokingly say that today’s consumer is what happens when an entire generation is raised by Mr. Rogers. In almost every one of his 31 years of episodes, he told America’s toddlers “you are special just the way you are,” and we all believed him! To the point that today, we don’t want the ‘lowest common denominator’ coffee our grandparents drank, we want coffee made just for us with our name written on the cup. We want clothes picked our for us and shipped to our houses, our own news feeds--our own everything. As personalization grows, so will the need for innovation in personalized packaging.

Sustainability: To play in sustainability, it used to be good enough to make a statement about your values and give some vague comment on your green policies. But as competition has gotten fiercer for the eco-consumer and consumers themselves more discerning, the need for tangible proof has grown. Just saying you are lowering carbon emissions isn’t enough anymore, now you must ‘show your work,’ and packaging change is increasingly becoming a popular method. Not to mentioned the fact that if the industry can move away from virgin plastic, the cost savings may significantly impact their bottom line.
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Pause and Reflect
There is a quote attributed to Vladimir Lenin that has cycled through my mind in the last several weeks: “There are decades when nothing happens and there are weeks when decades happen.”

Many of you have told me that you enjoy and even look forward to the more humorous posts at the end of my newsletters each week. However, I don’t think that this week should be ended on an ‘up’ note. A man died an ugly, violent death, and my nation is in turmoil. I cannot, nor do I want to, see a lighter side right now.

Instead I give you the following video—one of many that I’ve watched in the last few days. It is an interview with the amazing, brilliant and much-missed author James Baldwin in 1963, another tumultuous year in America.   
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From Innovation to Ideation
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