PURCHASE, N.Y. -- To compete with the homespun, lifestyle-oriented companies that appeal to the Whole Foods consumer, PepsiCo is creating new startup brands for the healthy grocery chain that bear no indication of their corporate lineage, and that are supported with very little marketing, reported AdAge.com.
One such product is Fuelosophy, a high-energy protein-drink line, which follows in the footsteps of its already-introduced Sun Snacks organic line of sunflower-oil chips and cheese puffs testing in the chain since last February.
Until now, most of the forays from Big Food into the natural-foods category have come not from creating new brands, but from buying up successful niche ones in the space, said the report. But PepsiCo is not alone in taking the entrepreneurial route to the shelves of the fast-growing, national-brand-eschewing natural-foods chain, the report added.
"Every company I work with is designing products distinctively different than regular grocery products to appeal to the natural-foods channel," Steve Gundrum, president and CEO of product-development firm Mattson told Ad Age.
To do so, giant marketers need to change their thinking, the report said. Gundrum said Whole Foods is "not a reseller of branded package-goods like other retailers. They're really a curator of brands and products that fit their consumers' lifestyle"which means consumers trust products carried at Whole Foods and are willing to pay far higher prices for them.
Scott Van Winkle, managing director of investment bank Cannacord Adams, told Ad Age that he believes PepsiCo's strategy is to use Whole Foods to test new brands instead of spending tens of millions to slot them into traditional grocery stores and advertise them. "Then they'll make the determination to go out ahead in mainstream grocery, since these days those guys are all watching what Whole Foods does."
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