week 14: Why does everyone and their mother have a CPG brand?
Social media and the grocery store are flooded with new CPG brands, where are they coming from?
One of my favorite pastimes is looking through the aisles in a bougie grocery store, fawning over the best packaging and branding of the most mundane items.
If you need to understand one thing about me, it is that I will always buy the better-branded product on the shelf, even if it is all the same on the inside.
For the most part, my attraction to labels in grocery stores has never led me astray.
ex: Graza makes great-tasting olive oil, and it looks pretty sitting out on my counter. Almost every time I have picked up a bottle of wine purely because I like the label, I have enjoyed the wine. If the winemaker can’t pick out a good label, why should I trust them to pick the best grapes?
Very quickly, entrepreneurs caught on to the consumer mindset of wanting their everyday groceries to be beautiful, as small, well-branded, CPG (consumer packaged goods) brands have suddenly appeared all over the grocery stores.
D- Doing- Obsessing over CPG branding
A lot of people talk about the similarities in romance book covers. All of them feature two cartoonish-looking figures romantically posed on the cover. It is a smart publishing tactic to group books by cover identity, therefore making it easy for readers to find their next read in their preferred genre.
Not a lot of people are talking about the bold text and colors that are starting to fill the shelves at the grocery store.
It’s marketing 101 that color can grab attention, yellow is even thought of as having the ability to stimulate appetite, which is why legacy brands like McDonald’s boast their golden arches.
It’s grocery store marketing 101 to put cartoons and bright colors on sugar-filled products and stock them on low shelves so that kids accompanying their parents to the shop can find them and proceed to beg for their purchase.
I- Interested in digging into this further
According to explodingtopics.com, the CPG market was worth $2.29 trillion in 2024, and that figure is forecasted to grow to $3.17 trillion in 2032.
“And small CPG companies reported higher revenue growth compared to large manufacturers” (Josh Howarth, explodingtopics.com).
Another marker of the overnight boom in retail success for CPG is the inevitable celebrity brands that begin to join the shelves.
You know a sector of the market is growing when a Kardashian joins, most recently Khloe with her protein popcorn launch for Khloud Foods.
G-Getting the urge to start a CPG brand
Shopping at the grocery store is getting more difficult when every shelf is full of consumer products repackaged to sell and appeal to the brand-conscious consumer.
I can’t be the only one who read about how Graza turned their simple brand concept into a company worth $240 million and thought, why can’t I do something like that?
This feeling of “but why not me?” is only heightened by the new digital era we have found ourselves in. An age of small business founders jumping directly on their brand’s social media accounts and telling their stories and sharing their products directly to the camera; it seems like everyone and their mother owns a CPG brand, so why not me?
I have no plans to start my own CPG brand, although I do see the potential and future of CPG moving into different aisles of the grocery store- better branding for laundry detergent and toilet paper becoming its latest victims.
S-Suggesting staying safe from grocery store catfish
Weeding out the small brands working with small creative teams from the big brands who are marketing their products in a similar way to fool naive shoppers is going to be the inevitable consequence of the noted success of these small CPG brands.
A huge number of the brands coming out of the CPG space have passionate founder stories, great marketing teams, hire small, independent graphic designers, and marketing teams, and are putting a lot more care into their ingredients and quality.
But be wary of the big parent brands who catch on to these trends and use packaging solely as a vehicle to increase the price of their existing products.
Like the concept of greenwashing in the fashion industry, I think we can expect to see the Kellogg’s and Nestlé’s brand-wash their products to appeal to the consumer market invested in the aesthetics of a beautiful pantry.
Thinking about the coffee space. In coffee, influencer CPG products are also typically white labels, which means they are produced by centralized large scale roasting companies and packaged under a label. Chamberlain coffee being a good example which is roasted by a company formerly known as Bixby, which specialized in celebrity branded products.
The success of these brands is based basically entirely on their success in marketing (including capitalizing on the fame of the influencers who own them). In reality Chambelain, like most of these brands, is unprofitable despite its high visibility on the shelves of luxury grocery stores and in prime LA real estate (e.g. century city mall). The marketing is really the only product that these companies make. Even packaging also can often be done by the producer rather than the influencer's company.
In general, I think these brands are a bad thing for the specialty coffee scene. The bag price for Chambelain is about $20 for 12oz, comparable with local specialty roaster who are doing very interesting things and roasting their own product. Chamberlain's grocery store bags, by contrast, don't even have a roasted on date. This should be illegal in coffee IMO.
People are paying specialty prices for a frankly bad product, and these brands are entering a hypercompetitive product market in which local roasters are already struggling. They're hiding industrial coffee behind specialty looking packages. Of course the economics are better for centralized roasters than small speciality roasters. Loquat (or Morii) can never compete on price with these roasters, but if people are willing to pay that $20 a bag, it's infinitely better for the coffee world that they pay it for a direct trade, locally roasted, interesting origin and process, etc. then just paying it for some celebrity SLOP.