BROOKLYN, N.Y. — For category managers, identifying healthy food startup brands for possible inclusion in convenience-store sets can be quite a challenge. These young, smaller brands often lack access to big marketing dollars and may not have the distribution of category heavy-hitters. And even if you’re aware of the start-up challenges, it can be hard to assess their potential to grow the category beyond what the existing assortment can do. But category managers face this challenge day after day: picking new, winning items that may displace SKUs from major brands.
That’s a big ask of both newly established brands and category managers. The question is, how do you know when it’s time to take a chance on a smaller or less well-known brand? And how might you adjust your mindset to encompass these new possible opportunities instead of staying with the status quo?
A New Criteria
Category managers know consumer preferences are changing and new success criteria are needed. There have been massive changes in convenience over the last decade and more: the rise of the protein bar set, the rapid growth of foodservice and the addition of many fresh food options are just a few examples.
All of these changes cater to consumers wanting higher quality, healthier and more convenient food. But most of the change has been around the perimeter of traditional convenience snacks. Applying a model of embracing new brands to snacks could win incremental purchases per trip for retailers who take the leap.
To do so, it’s time to take a careful look at total sales scale and velocity metrics, which are typically used to assess a new item. These are strong metrics to use when considering a traditional line extension or new item, but hard to apply when a brand promises a new benefit or the ability to attract a new consumer.
Instead of sheer size, consider the velocity of the brand in a few test accounts. And, when evaluating velocity, consider the differentiation of the brand compared to the existing assortment. If the smaller brand can attract a different consumer than a big brand’s line extension, then it will add more incremental growth to the category.
Build Your Brand
Beyond the category, there is an opportunity to use traditional snacking sets to reinforce your store’s own brand. Are you looking to be the type of store that seeks out and harnesses the latest trends? Or are you more about stocking tried-and-true classics? There’s no right or wrong answer to this question, but the answer does matter; it will help you not only decide which products to stock and sell, but also identify your current and prospective target customers.
When evaluating potential new items, it’s worthwhile to ask how changes in other parts of the store have changed who shops and what they buy. Are there lessons from other categories that go beyond total sales and velocity?
A useful way to begin this kind of analysis is to consider broader trends (often called megatrends) that may touch other elements of your target customers’ lives: Convenience in the form of grab-and-go meals, health and wellness in the form of a variety of healthy, organic, non-GMO, fair trade foods, and easy-opening packaging to accommodate the aging population.
As an example, a recent U.S. Chamber of Commerce survey found that more than 70% of American citizens have become more committed to making healthier eating choices as a result of the COVID-19 pandemic, and category managers should take note of these trends when deciding what their store sets say about their brands.
Reimagining the Set
When you put it all together, it’s clear new items from smaller brands can play a bigger role than just adding incremental sales; new items can bring to life a re-imagined set that supports the store’s total brand vision.
Convenience stores have seen tremendous success by creating new occasions in foodservice and fresh foods. That same opportunity exists in traditional categories waiting to be reinvented.
Doing so invites consumers to explore the entire store and find the new options that may make them loyal, repeat customers.
Jim Low is president of Rip Van, a better-for-you snack company based in Brooklyn, N.Y. Previously, Low served as a general manager under the Kraft Foods and Mondelēz International umbrella. Contact him at jim@ripvan.com.