Ever since I stopped writing on the blog I would run into people telling me they had read the blog and loved it. I would always respond with something to the effect of, “oh thanks I’ll be getting back to posting soon.” Yet here we are, several years later and I’m finally getting back to posting. I’ve been inspired because of the changing landscape of the Consumer Packaged Goods (CPG) industry.
The CPG industry is becoming more challenging than ever, and Bearded Brothers is even having to make a lot of changes to adapt. One of them being shifting our focus to direct to consumer.
Small brands like us are having a harder time than ever before, so I wanted to come back to share the journey with other food brands. Perhaps we can all help each other navigate these turbulent waters.
The most recent news that is still making headlines is the Amazon acquisition of Whole Foods, and all the changes the store is making. Many of them are making it harder for small brands to compete, and even harder for new brands to get on the shelf.
So, what are brands to do without the help of Whole Foods? I think RX Bar is actually a great company to learn from. Even though they got traction into Whole Foods before the Amazon acquisition, their approach to how they did it was creative and different.
While I would venture to say, most brands focus all their energy on growing their retail presence, and totally neglect their online sales, or make it a very small part of their business strategy, RX Bar did the complete opposite.
They built up a loyal following of customers all online, and in a hand full of gyms. These guys became a multi-million dollar company just through their online presence. This in turn gave them a powerful story when they went and pitched to Whole Foods and other major retailers. They were able to say to the buyer, “look we have five million customers online, and $30 million in revenue.” You need us in your store. (note: I’m completely guessing at these numbers, but you get the idea)
Creating a loyal following of customers created a powerful story for the buyer. It would mean instant traction once the product landed on the shelf. That strategy allowed them to grow to a $120 Million Dollar company in just a few short years. I can’t say I’m not a bit envious.
With the growing number of customers shopping online, the direct to consumer model cannot be ignored. It needs to be a major part of your growth strategy.
Since December Bearded Brothers has begun focusing a lot of its efforts on Amazon sales. In just a few short months we tripled our revenue (in Amazon sales). I don’t have any hard data to prove this, but I’m guessing improving your online sales, lifts your sales at the store level. Here is why….
Let’s say a customer orders your product for the first time after finding it through Amazon, or a Facebook ad you ran. You end up gaining a loyal fan, and they see your product in the store during their shopping trip to the grocery store; they are more likely to pick up your product as an impulse purchase having already tried and loved it.
I think as threatened as retailers feel by online, I feel that there is some benefit.
It’s hard to say for certain just how the future of food is going to look, but one thing I think we can say for certain is that if a food brand is going to survive, the direct to consumer model has to be a huge part of that.