These are challenging times for food and beverage manufacturers: supply issues, the rising cost of goods, and, in the UK at least, incoming HFSS legislation. Then there’s the rise of private labels.
The problem facing the big FMCGs is that they have traditionally relied on their status as well-known, trusted brands to charge consumers a premium. In a high inflationary period, though, they’ve little wriggle room to raise prices and help cushion the blow of rising costs.
Unilever, for example, is “walking a thin line between protecting margins and losing long-term customers”, recently warned Derren Nathan, Equity Analyst Hargreaves Landsdown. “There's only so much you can hike before customers walk away.”
The onus on these companies, therefore, is to use their clout to focus on providing better and more memorable user experiences.
One way is way is via careful engineering of sensory cues.
“It’s a decisive moment for brands,” Andrew Wardlaw, Chief Ideas Officer at MMR Research, told a webinar.
“With private label on the war path, everything matters… Our recent survey showed 80% of Brits believe supermarket brands to be just as good now.”
On top of the private labels formidable march is the pandemic; the war in Ukraine; and the cost of living crisis which in their wake has left ‘emotionally exhausted’ consumers. We are frazzled by an escalation of working hours, digital ‘overstimulation’ and a general feeling of uncertainty.
Concerns about sleep health, stress health and, unsurprisingly, immune health have grown. So too more established areas like heart health. Then there’s climate change. 85% of consumers across 25 countries are now more willing since the pandemic to take personal action to combat environmental change, according to Mastercard.
Experience matters more
“Consumers’ expectations of brands are probably higher than ever,” said Wardlaw. “Every purchase your customers make is going to be more scrutinised than ever, and expectations from your product are most likely to be higher than at any other time.”
With manufacturers needing more than ever to make products viewed by consumers as worth paying for, brands therefore “must think about strategies that help build the more distinctive, less substitutable product experiences of the future,” he observed. Brands, he added, need to respond with “heightened product theatre”.
Careful engineering of sensory cues can lift expectations and improve the perceived reality of consumers, added the brand expert.
Sound too – such as Kellogg's Rice Crispies and the perfected snap of a Lindt chocolate bar, to the distinctiveness of Dyson’s hair dryer and the iconic fizz of Coke – can further enhance your brand communication.
“Brands need to prioritise a product experience and move from a culture of optimisation and enter a brave new world of maximisation to get noticed and remembered,” Wardlaw stressed.
The need for additional ways to get your product noticed and remembered
Mainstream players are starting to acknowledge that customers are finding themselves prioritising those elevated product experiences that make daily life a bit more satisfying, Wardlaw pointed out.
PepsiCo, for example, has noted that Generation Z is “all about texture, so we’re really leaning into that”.
Heineken too has observed that: “Consumer palates are evolving, with tastes diversifying from sweeter and less bitter to richer and more complex, providing experiences for which they are willing to pay a premium.”
Other examples come from the low-to-no alcohol sector. Diageo-owned, UK-based Æcorn, for example, makes a no alcohol aperitive using acorns and a range of British botanicals, peas and English hay to give an elevated experience.
“Our approach was to create something familiar but also challenge perceptions of flavour profiles,” explained Co-Founder Claire Warner. “We believe we are adding things, not taking anything away. For example, we’ve found that bitterness is something that triggers endorphins in the same way alcohol does – though obviously not as much. Endorphins help us bond and are one of the reasons people like to drink. Anything with a spicy, bitter flavour profile will have the same effect. Increasingly, we’ll see more types of these functional ingredients being used in non-alcohol drinks.”
Jennifer Creevy, WGSN Food & Drink Director, a global trends forecaster, said: “The cost of living crisis is incredibly difficult, but consumers are seeking a revival of that feeling of awe and wonder that has been lacking for the past couple of years… Some people feel like they’ve missed out and now want to experience more life and make up for lost time.”
One type of future consumers identified by WGSN are the ‘sensory seekers’ who are craving the ‘experiential’ and who want to expand their world through food, explained Creevy. “They are open to trying high sensorial moments and passionate about things like rediscovered cuisines and embracing tech-led innovations and they want to have those products first.”
Multisensory dining fine dining menus can be created by mainstream brands, she observed. For examples of this trend, look to gin maker Hendrick’s, which created a ‘magic of the sea spa kit’ with the launch of its Neptunia gin. This included seashell headphones, face masks and aromatherapy candles, tapping into another timely theme of self-care.
As further examples, we can include the bioluminescent lollipop and ice cream from British ice cream maker Charlie Francis made from jellyfish protein that glows in the dark when licked; the Coca-Cola Zero Sugar Byte that ‘brings the flavour of pixels to life in a beverage’; and Unilever’s ‘realistic and beautiful’ Cornetto rose ice cream.
As advice for brands looking to tap into ‘sensory seeker demand’, Creevy said: “Disrupt and break the design laws for your brand. Harness some of the underused global flavours and bring them to new audiences. Also fuse the physical and digital... the metaverse is coming and young people are already there. Embrace tech-led innovations and, most importantly, think about the joy you’re going to deliver to customers. If you put a smile on their faces, you’ve won.”