Packaged goods marketers have largely stayed the course with their marketing spending despite a tumultuous period mired in rising inflation, intense supply chain pressures and labor shortages. The steady stream of media dollars has extended a run of innovation and improved efficiency for the category, with brands turning to emergent tech like artificial intelligence and tactics like creator-driven gaming content to engage consumers.
Part of the buoyancy is simply winning brands doubling down on what's working in an era that's put a premium on digital strategy and e-commerce. But elsewhere, the industry is responding to increasingly critical mandates that don't carry easy solutions: What will CPGs do once third-party cookies are deprecated in 2023? How does a traditionally stodgy category reach young people who are averse to advertising — as well as the tropes it's reinforced? How can a business predicated on disposable products be sustainable?
In the report below, Marketing Dive examines:
How brands like P&G are reinforcing corporate sustainability pledges in campaigns
Mondelez leveraging empathy to make personalized marketing that sidesteps the creepy factor
How marketers like J.M. Smucker are reinventing their messaging to center on culture
With uncertainty and disruption continuing to be a guiding theme amid the pandemic's third year, this content can serve as a reference point for understanding and reacting to new obstacles in the months ahead.
What a raft of CPG rebrands portend for marketer priorities
M&M's, Anheuser-Busch and Coca-Cola refreshes serve as a reminder that marketers can connect purpose to brand identity — if it's authentic.
By: Chris Kelly• Published Jan. 26, 2022
Even as the pandemic continues to upend daily life, there is hope that stabilization and normalization could be on the horizon, offering with it a chance for marketers to prepare their brands for a post-pandemic reality.
M&M's, Anheuser-Busch and Coca-Cola recently unveiled brand refreshes that look ahead to that reality and beyond. And while each utilized different tactics and highlighted different marketer priorities, a trio of moves by major advertisers of iconic brands could foreshadow other marketers making similar moves.
Brand makeovers have taken on new importance since the offset of the pandemic as marketers worked to make their brands better fits for a landscape repeatedly altered by the coronavirus with a renewed push for social justice and the changing consumer behaviors caused by both. But while earlier refreshes could have been the result of brands scrambling to manage major pandemic-spurred shifts, the new looks that debuted in early 2022 could be seen as more intentional actions by brands, even as they still grapple with issues like disruptions to supply chains.
"They've gotten their feet under themselves a bit and are looking forward," said Karthik Easwar, associate teaching professor at Georgetown University's McDonough School of Business. "They're not just trying to play catch up, but actually looking forward."
Despite being timed to the start of the year, as the world awaited the omicron variant wave to crest, these touch ups shouldn't be seen as quick, reactive moves, however, but the result of thoughtful processes that encompass research, ideation, testing, planning and rollout as marketers look to bolster brands that have faced challenges during the pandemic.
"These might be market realignments or initiatives underway that were either planned or accelerated because of the crises," said Mario Natarelli, managing partner at strategy agency MBLM.
"You don't turn around an eagle and automatically tell people that you're forward looking."
Associate teaching professor, Georgetown University's McDonough School of Business
All three major refreshes tackled a range brand elements, from logos and mascots to typefaces and colors. Anheuser-Busch rendered its "A&Eagle" in a gold that mirrors the color of beer and barley; Coca-Cola modernized and simplified a range of packaging; while M&M's modernized its mascots and put a greater emphasis on the ampersand in its logo. In all three cases, there was an extreme attention to clarity and simplicity, Natarelli said.
"All of them are cutting through the clutter and trying to present a very clean, clear, simple, bold face, and whether that's for shelf impact or viewer clarity, there's something there that transcends strategy," he said.
While Coca-Cola's new look seeks to make its growing product line of flavored, zero sugar and coffee-based beverages easier to find as it looks to reach new drinkers during new times of the day, the M&M's and Anheuser-Busch refreshes serve a dual purpose of tying brand ethos to visual identity, tweaking iconic imagery for new audiences and imperatives.
The Anheuser-Busch logo now features the eagle in flight and facing to the right, a change intended to showcase the company as more premium and forward-looking than before, in line with its recently launched new global purpose, "To a Future with More Cheers," that includes a sustainability initiative. Meanwhile, M&M's plan to makeover its candy mascots as a celebration of self-expression centers inclusivity.
Successful brand logos evoke in consumers' mind the brand itself, from the name, to the identity of the company, its products and value propositions, or other emotional or conceptual traits, Easwar explained. For these new logos and mascots to take root, brand touch ups must be paired with tangible efforts that reinforce and communicate brand values — from sustainability to equity and inclusion — to consumers. Simply put, the refresh can't stop at the logo.
"It doesn't happen instantaneously," he said. "You don't turn around an eagle and automatically tell people that you're forward looking."
The M&M's lesson
The M&M's rebrand received the most attention, from both industry watchers and the online chattering classes, for how parent company Mars looked to redesign its iconic candy mascots with an eye toward a "more dynamic, progressive world." While decisions to make the orange candy relatable to Gen Z by focusing on the character's anxiety or replacing the green M&M's high-heeled boots with sneakers to "reflect her effortless confidence" quickly became fodder for satire and memes, the balancing act that Mars is attempting — striving for inclusion while selling chocolate candies — provides lessons for other marketers.
"That brand has to resonate with younger audiences and audiences that believe these issues are essential or maybe even more important than older skewing audiences would. I'm sure there's the counterpoint and some backlash they might face, but I think that in their case, they're taking it on because of who their customers are and what they care about," said Natarelli.
For its part, M&M's use of different colors and characters already made the brand "half-pregnant" in embracing an egalitarian purpose, Natarelli said. But again, for the rebrand to be successful, it will take more than lowering the height of an M&M's high heels, Easwar said.
"If it's just one piece in a much larger effort that has some more tangible and practical and functional — maybe it's in hiring practices, maybe it's in other ways that they reach broader markets — if they're making those efforts, then it shouldn't be looked at as just lip service," he said.
Plus, any backlash M&M's receives for a perhaps clumsy connection of inclusion with its mascot makeover should not serve as an example of why brands shouldn't continue putting purpose at the center of their brands. Consumers — especially younger ones — want brands to act, but need the actions to be authentic as they work to add more intimate appeal as part of rebrands, explained Ali Fazal, vice president of marketing at creator management platform Grin.
"People are not upset about the actual movement or the message. They just want it to feel like it's true to the brand," he said. "In order to do that as a brand, you have to make it a part of how you operate — not just a campaign."
Article top image credit: Permission granted by M&M's
How Mondelez deploys empathy to sidestep personalized marketing's 'creepy chasm'
At Advertising Week, Global Vice President of Consumer Experience Jon Halvorson emphasized that efficiency is driven by smarter creative and a simpler media plan.
By: Peter Adams• Published Oct. 22, 2021
The push-pull between achieving scale while delivering ads that are more personalized and relevant to consumers has long dogged packaged good marketers that oversee up to dozens of brands. Procter & Gamble in 2017 famously pulled back on targeted Facebook ads, believing them to be an ineffective tactic even as messages were informed by more granular behaviors.
Four years later, the category still contends with many of the same headaches while also grappling with the deprecation of key ways of keeping tabs on consumers online, namely third-party cookies. At Mondelez, executives have implemented a strategy that looks to evolve past the idea of "personalization at scale" by narrowing in on the concept of empathy — an increasingly common theme in the sector that competitors, including PepsiCo, have also endorsed.
"If we were going to ultimately go from being a $25 billion company to being a $50 billion company, marketing was going to have to pull a lot of weight," Jon Halvorson, global vice president of consumer experience at Mondelez International, said during an Advertising Week 2021 panel moderated by Innovid.
"When we looked at ourselves, we were big on mass reach. We targeted everyone who had a mouth, and we showed everyone the exact same message," he added. "When we really reflect on that, that doesn't make sense. I think every CPG marketer intuitively knows that that doesn't make sense."
In threading a particularly tricky needle, the company has tried to better iron out the purpose of its individual brands without strictly defining that quality around the social or political causes with which purpose is typically associated. Persevering a degree of "human tension," to quote Halvorson, was also viewed as essential to avoid creating a position that's not overly saccharine or manufactured-feeling.
"Not every brand purpose needs to be to save the ocean ... When you look at Oreo, it's about playful connections, when you look at Cadbury it's in generosity," Halvorson said. "Our best brands — Oreo, Cadbury, Ritz Crackers — they know who they are now, and you just see it continually work and you see it in the creative support, you see it in the ROI and then ultimately [sales]."
And Mondelez sales have been strong throughout the pandemic, up 12.4% year-on-year in 2021's second quarter to $6.6 billion. At a time when more of the industry is shifting focus to performance-driven media and utilitarian messaging, the executive's comments also affirmed the power of smart creative execution and brand-building.
"One way to drive efficiency is actually the creative excellence," Halvorson said before illustrating by example. He said that if Ritz and Oreo activated on the same platform, targeting the same audiences in the same time frames, Oreo would ultimately pay lower rates due to its "higher creative excellence."
"Creative is one of my greatest levers to lower my costs," said Halvorson. "As I personalize and I increase my relevance to consumers, I am rewarded with lower media costs over time."
Keep it simple
Mondelez's larger "empathy at scale" project technically launched at the tail end of 2020, but had the groundwork laid over years, speaking to the often slow turn of gears at sprawling international marketers.
"I'd like to think that it takes one year to get everything down one level of the organization," Halvorson said.
The executive stated Mondelez oversees 852 brand-country combinations, with roughly nine brands making up 50% of sales and then another 45 accounting for the other half. In terms of marketing, those products invariably produce high volumes of assets, which has put a bigger mandate on automation tools that can help speed up the execution process.
"You don't have time to review 1,000 assets, you don't have time to version all of it out," said Halvorson, before dinging what he viewed as shiny-toy solutions.
"In all of your marketing models, you are allowed to have a certain level of complexity somewhere; you cannot have complexity everywhere, otherwise you will be average everywhere."
Global Vice President of Consumer Experience, Mondelez
"Where are we going to get the unlock from it?" he added. "It's not going to be by mirroring or demographics. It's not going to be from weather, it's not going to be from sports scores. You can do all that, but that's a 20% lift. I want double."
Instead, Mondelez has tried to prioritize media simplicity and a smaller partnership purview, an approach other CPGs have pursued in the quest for greater agility. The Oreo owner had 100 partners in the U.S. alone in 2017, when the seeds of the empathy at scale project started to be planted. Today, it has fewer than 100 partners globally, according to Halvorson, including just five creative agencies consolidated under WPP and Publicis.
"Simplifying what we do in media allows us to do the complexity elsewhere,” said Halvorson, noting that he's averse to the idea of a 360-degree campaign, believing it quickly leads to diminishing returns.
"In all of your marketing models, you are allowed to have a certain level of complexity somewhere; you cannot have complexity everywhere, otherwise you will be average everywhere," he said.
Article top image credit: Permission granted by Mondelez International
CPG brands ditch domestic tropes for culture-led marketing. Will it pay off?
Fewer parents and higher spending power among Gen Z could see historically stodgy brands move away from ads targeting mom and dad.
By: Peter Adams• Published Oct. 5, 2021
For decades, peanut butter brand Jif ran a tagline that helped enshrine it as a household name: "Choosy mothers choose Jif." The memorable phrase, which eventually swapped "mothers" for "moms," sharpened Jif's edge against rivals Skippy and Peter Pan to place it as No. 1 in the category, where it remains to this day. By most metrics, it was an effective positioning for the spread.
Jif's marketing looks markedly different in 2021 than 2001, and in ways that speak to how pockets of the packaged goods sector are dropping a focus on domesticity for strategies more tapped into consumer culture. That pivot has been informed by technological advances, including better targeting and insights, but also a changing shopper base that is potentially averse to being pigeonholed as homemakers.
For many companies, creating cultural relevance outside the home could be an uphill battle. CPGs might need to put in extra legwork to successfully court even choosier young groups like Gen Z, especially as loyalty becomes harder to hold onto amid a boom for private label, direct-to-consumer and e-commerce brands. A study by market research consultancy Reach3 Insights found 45% of surveyed U.S. consumers switched their preferred brands across categories during the pandemic, and 85% plan to stick with their new choices. But that same fickleness is emblematic of why CPGs should consider a more culturally led approach as they try to make an impression that carries over to the checkout line or final click.
"Brand loyalty is really something that is, in fast-moving consumer goods, more of an aspiration than a reality," said Matt Kleinschmit, founder and CEO of Reach3. "As a result of that, modern marketers in the CPG world have latched on to this idea of trying to establish emotional connections with consumers.
"If there's an emotional connection, that will often trump functional benefits," he added. "Brands that can execute that in a smart way are winning."
An ad campaign Jif rolled out in August 2021 stars the rapper Ludacris as he adapts his fast-flowing style to that of modern "mumble rap," whose stars have been criticized by old-school fans. The concept was informed by a social listening insight that some up-and-comers are painted by rap's legacy gatekeepers as sounding like they have peanut butter on the roof of their mouths. In the "Lil Jif Project" spots, which seek to bridge the genre divide, there's nary a reference to anyone's mom, though one of Ludacris' daughters does make a cameo to offer the song a co-sign from the younger generation.
Jif for years was already putting less emphasis on its "Choosy moms" positioning, but made a more radical shift after parent J.M. Smucker tapped Publicis to freshen up the brand's portfolio in 2018. Starting in 2020, Jif began to seek out ways to intersect more with culture, including through a campaign that played on debates over the pronunciation of the Gif image format, heralding a new era for the peanut butter marketer's identity under the "That Jif'ing Good" platform.
"What CPG has done — and it's an important step — is walk away from thinking all of their ads need to be holding a mirror up to their audience: 'This is you cleaning the counter, this you making a cup of coffee.' That doesn't make you feel anything for the brand," said Erica Roberts, chief creative officer of Publicis New York and an architect of the Jif campaign. "You don't start to create any deeper connection points or memory structures for that matter."
Other CPGs are pursuing similar refreshes. Kraft Heinz's Oscar Mayer label in 2020 introduced a brand overhaul in the first major work from creative agency of record Johannes Leonardo. The "Keep It Oscar" campaign eschews traditional storytelling in favor of Dadaist absurdity, with videos that depict toddlers shooting lasers from their eyes and bacon taking on a life of its own.
On the media front, the 138-year-old purveyor of hot dogs and lunch meats is experimenting with formats, including GIFs and its first five-second TV ads, that recognize a more attention-strapped consumer economy that's attuned to a constant scroll of social media. Recent extensions speak to a larger eye on Gen Z and millennials as well: Oscar Mayer in 2021 partnered with Lyft to convert its signature Wienermobile into a ride-sharing vehicle and dropped a capsule collection of "Street Meat" streetwear that was sold through hot dog stands.
The pop-art creative plays come on the tails of sales windfall for Kraft Heinz, which benefited from the pandemic's bump in at-home cooking. Oscar Mayer previously had been something of an albatross for the company, meaning "Keep It Oscar" could serve as a key test of whether the more culture-oriented approach pays off in relation to the bottom line.
But CPGs don't typically foster the same amount of enthusiasm as other categories, like apparel or technology. It's harder for consumers to get worked up about oatmeal or deodorant to the degree they do a new iPhone drop. Still, drawing a clearer connection between a CPG brand and trending discussions — whether they be around a celebrity, major event or piece of pop culture — could become more significant for a population that's constantly plugged in.
"With fast-moving consumer goods, the thought is you use it and dispose of it. They don't necessarily have the same type of cache that some of these other brands maybe would," Kleinschmit said.
"I would actually argue that that's even more of the reason why a lot of these modern marketers that work for these large CPGs are trying to bring that idea of cultural relevance to the forefront," he said. "Without that cultural relevance, they're one of dozens of other products in an increasingly crowded virtual e-commerce shelf."
Another factor that could motivate CPGs' move toward more culture-centric marketing is the pressure to address a history of propping up normative domestic roles. Images of a housewife in an apron cooking and cleaning were woven into the fabric of U.S. consumer culture with the help of ads devised by largely male agencies and marketing teams of the "Mad Men" era.
"There's almost a sense of responsibility to redefine how we show up and to consciously refuse to perpetuate those stereotypes."
Chief creative officer, Publicis New York
Some brands have tried to tackle the touchy subject head-on. Budweiser in 2019 reimagined sexist ads from the '50s and '60s to be more empowering in honor of International Women's Day. While the direct approach isn't common, it might benefit the category to reassess where and how its products are portrayed.
"CPG probably has the most reason to kind of walk away from that narrow targeting to moms because they've been so responsible for perpetuating this antiquated division of labor," Publicis' Roberts said. "There's almost a sense of responsibility to redefine how we show up and to consciously refuse to perpetuate those stereotypes."
Many women today would rather be targeted based on their interests or hobbies rather than as parents, according to experts. That's especially true of younger groups like Gen Z and millennials that put a premium on social values. Disruptors from the DTC world and other categories have made dents in legacy businesses not only through more digitally savvy sales models, but also a clearer sense of brand purpose than their legacy peers.
"If you talk to a mom, there's this very responsible, functional message. You want to choose something good because you're buying it for your kid," said Jennifer Baldwin, executive vice president and strategic planning director at Publicis. "That as a point of difference can erode over time. That's happening, really, across all packaged goods. There are more entrants coming into the category as private label becomes more appealing."
That's not to say moms aren't part of the picture for CPGs. Women, generally, are still estimated to make between 70-80% of household purchases. A recent Kearney report adds further shades of nuance to the conversation. The consultancy's poll of 1,000 women found 60% valued a "female-focused approach" when being marketed to for household products, but 42% stated that women didn't have gender-specific needs. Nearly a third worried that female-focused products could create or reinforce stereotypes.
"If you really look at demographic data, parents are declining. There are fewer households with kids today. Year-over-year, that's going down," Baldwin said. "That meant that after this 50-plus year focus on parents, [Jif] was losing relevance with younger consumers."
Changing demographics create opportunities for CPGs to reach new and even unexpected audiences. Jif, for example, is trying to recognize decision-makers like college students who are buying their own groceries for the first time or fitness enthusiasts who value peanut butter as a protein source. That thinking is reflected in influencer partnerships and larger investments in emerging social media platforms.
"We continue to go back to TikTok because we've found such a diverse audience there and a diverse group of influencers," said Cadence Ely-Mooney, a senior account supervisor at MSL, another Publicis unit that works on the Smucker account. "Not only are we looking at diversification across platforms, but in terms of people we're partnering with ... This kind of expansion has allowed us to be considered more along the lines of a lifestyle brand."
Jif's audience in the 18 to 34 range is 67.25% female, according to an independent analysis Helixa conducted for Marketing Dive, and expresses a 3.68-times affinity toward Ludacris versus the 1.00 national average index. That suggests the "Lil Jif Project" campaign could resonate, even as it's distinctive from the brand's past marketing.
"If you talk to a mom, there's this very responsible, functional message ... That as a point of difference can erode over time."
EVP, strategic planning director, Publicis
In trying to thread the needle between ads that connect while not reading as tone-deaf, CPGs have more tools in their kit than before. An explosion of interest for connected TV and streaming during the pandemic — along with the continued movement of media dollars to digital and social as the ad market continues to rebound — is leading to an influx of solutions that open a greater degree of granularity than what linear media can offer. One takeaway is clear: broad, demographic-based targeting is out of vogue.
"It's a larger trend just in general, approaching marketing and messaging to people via interests," Roberts said. "Even the way we do our segmentation work is much more psychographic now and interest-based."
Marketing service providers similarly are trying to meet the cultural moment. Taco Bell, while not a CPG, named Cashmere its first culture agency of record in 2021 to deepen its connection to areas like sports, fashion, gaming and music. That's a tack CPGs could follow as they look to freshen up their image and engage younger consumers who are more skeptical than older cohorts and willing to call out brands that fail to pass the authenticity sniff test.
"Moving forward, not only is it going to be important from a cultural perspective to say what and who to align yourself to, it's going to be equally important for these brands to know what not to say," Kleinschmit said. "For brands and products that are sort of out of alignment … all of a sudden that brand turns into persona non grata.
"There's a whole host of these types of fickle pop culture preferences that brands need to continually be on top of," he added.
Article top image credit: Permission granted by Jif
PepsiCo's in-house content studio head on preserving brand trust as demand soars
Saying no to projects isn't out of the question as Louis Arbetter tries to maintain quality while building out new capabilities in areas like social listening.
By: Peter Adams• Published Dec. 20, 2021
Despite prior speculation that the pandemic could throw cold water on the agency in-housing trend, major marketers like PepsiCo have continued to ramp up their activities in the space. If anything, the food and beverage giant has had to adopt a more measured approach to projects to avoid getting swamped.
"When we scale, we're careful to bring folks on in a way that's going to set them up for success," said Louis Arbetter, vice president of content and production at PepsiCo Beverages North America and the head of the division's in-house Content Studio. "We're growing tremendously, but you don't want to grow too quickly."
Recent initiatives from the group include a Showtime documentary produced with Boardwalk Pictures and directed by Nadia Hallgren that took viewers behind-the-scenes of the Pepsi Super Bowl Halftime Show featuring The Weeknd. Arbetter previously helped spearhead the viral digital content series "Uncle Drew" that depicts NBA star Kyrie Irving as an old man whose skills on the court shock unwitting street players. The concept was spun into a feature film — the first to be based on a branded content series — in 2018, where Arbetter served as executive producer.
Below, Marketing Dive spoke with Arbetter about the challenges and opportunities of the pandemic's streaming and social video boom, how PepsiCo learns from external agency partners and in-housing's role in the metaverse.
Editor's note: This interview has been edited for clarity and brevity.
MARKETING DIVE: You just got back from a shoot. What has your project volume looked like in recent months compared to the rest of the pandemic or even pre-pandemic?
LOUIS ARBETTER: Volatility is something we all just need to be comfortable with, but that has had one impact on our business, which is growth. Necessity is the mother of invention. When you need to find new, innovative ways to do things, you're more open to changing it up a little bit. Having a thought partner in-house is a real advantage I think a lot of brands have now taken up, so our partnership with the brands has expanded in a major way — the number of projects, the number of strategic discussions even before you get to turning a camera on. We're much more involved upstream in defining what the common strategy should be and how that big idea should come to life across different channels. It's to the point where we balance being able to deliver everything with the team that we have, so we've had to say no to some things. You can't ask new folks to take on a million things at once.
When you say new folks, I imagine you've hired more?
ARBETTER: The team is constantly growing, but we try to limit the amount. It's not like we're going to double in a month, because that's a surefire way to start doing nothing. We don't have to do everything, but once we do agree, we have to over-deliver. Building trust with your brand partners is important, and you don't want to hurt that trust by dropping the ball.
In terms of the types of people you've been looking to add, are there new areas?
ARBETTER: Totally. So our strategy function within the studio — and it's really focused on comms strategy — is probably our most robust. In terms of bringing new folks, we built out a whole social listening capability. The way we used to look at social listening was quite reactive: How are folks reacting to what we put out there? Now, it's very much leveraging this capability to proactively understand what consumers are talking about, how they're feeling and then incorporating those insights into the brief. That shapes the creative that we're making.
We kind of look at our in-house capability a little differently than I think some other companies do. We're here to support our brands and our agency partners to help them succeed. I'll sit with our external agency partners and ask them what's working, what's not working. They haven't been shy of saying, sometimes those briefs are pretty s----y. So we have to improve what we're doing.
You say that is something PepsiCo does differently. In-house versus external agencies is often positioned as very competitive in the media. Do you think other companies have a one-track thinking when it comes to in-housing?
ARBETTER: The easiest way to justify building an in-house team is efficiency, and efficiency is often defined through a singular lens of, 'I can do X for less money.' But we can also save time. So if I help reduce the rounds of creative between a brand team and an external agency, that is gaining efficiency. That agency is spending less time working on the project, billing less hours. That's a different kind of efficiency that I think folks need to understand. There's lots of ways that we can speed up and save dollars. Sure, we definitely bring certain types of work in, but we're never going to want to bring everything in. That makes no sense.
Your past work has been really focused on product integration. There's so much programming at the moment, I imagine there's a lot of opportunity. How has your thinking changed?
ARBETTER: If I could add a word, it's volume of opportunity. We're constantly on the prowl for new ways to collaborate. The companies that will succeed and come out on top are those that are able to collaborate without ego, without pinning themselves to the way things have worked in the past. We have now had a lot of success with this. To come out and take what is an existing platform of the Super Bowl halftime show and then extend that equity through a documentary, which is partnering in a very different way with the NFL, with Roc Nation, with Nadia Hallgren, our director. Putting a documentary out on Showtime, that's innovative and just kind of the type of stuff we're going to be continuing to do.
The flip side is there's just so much content out there right now. Does that create challenges?
ARBETTER: You cannot view your competition and the work we're creating as content and commercial time. The work that I'm talking about is really any piece of content that any streaming platform, studio or what have you will put out. It's just got to be entertaining for entertaining's sake, period. The good news is, we are in a position to not hope that the stars align. We are in a position to reach up and really align the stars and call the partners and bring people to the table. A lot of brands are starting to realize that they cannot just create compelling content, but also even create compelling content with a purpose and advance certain conversations in a positive direction that otherwise we couldn't do. I do understand there are challenges, but we'll take that gauntlet with the opportunities that it provides.
You said you're excited to collaborate with partners who recognize things don't work the way they have in the past. Have your metrics for success changed?
ARBETTER: This is one where sometimes folks overcomplicate things. Before the project, we have to align on what our objectives are. People are always focused on, well, how are we going to measure stuff? In the case of the halftime show, we already get a lot of eyeballs on that. But if we want to extend the equity; if we want to extend the conversation about this platform; extend the linkage between the brand and the most exciting moment and culture, those are objectives that we can wrap our heads around and then figure out how to measure them through sentiment, views, engagement and the like. But each measurement starts with each project and the objective you want.
Are there areas in your strategy that you're excited about filling out going forward?
ARBETTER: Overall, we just want to make sure that each of the brands has a well-defined strategy. Then like any good strategy, we are truly making choices on where to invest their resources and not spreading the peanut butter too thin across the piece of toast. That's probably one of the surest ways to fail is making too many small little bets all over the place. We feel like some of the long-form work that we're doing is a great way to bring the brand story to life, to bring the brand's purpose to life. You can often tell these deeper, more meaningful stories. So we have a lot of work in the pipeline to do just that. And the brands can't get to the place where they're making those choices without a robust strategy, so we're helping a lot with that. Anything like social listening we can do to give them more data to help make decisions.
We’re helping beef up certain levers that they're already pulling, but maybe improving the precision of the lever. Influencer marketing is something that everybody's been doing for a long time, but has every brand done a great job of integrating that lever into their broader plans or is it in some cases an afterthought? Certain tools like influencer marketing, I think we could do an even better job.
There's a lot of technology, the pandemic really forced people to innovate. When you looked at NBA games and saw virtual fans in the stands, nobody really wanted to have to think of that. But, that's pretty cool. Why wouldn't you keep doing that?
The big buzzword is 'metaverse.' I don't know how much of that falls under your purview.
ARBETTER: We don't make a decision that all meta ideas are going to go to one place. We believe that great ideas can come from anywhere. So it's not an in-house or external whatever. Everybody recognizes that there are a lot of new cool ways to interact with our consumers like Nike did with Roblox. We're working on some things now we feel good about. You’ve just got to learn by doing to some extent. The same with the NFTs and all that. I don't think you could say, 'Oh, we're gonna hit a hole in one straight out of the gate.' You’ve got to get into it, roll up your sleeves and maybe you stumble a little bit trying something, but that's alright. A lot of folks get paralyzed by waiting for just the perfect thing. [Editor's Note: Pepsi released its first NFT collection with VaynerNFT in the days following this interview, though Arbetter's team was not directly involved with the project].
Operationally, what does your team setup look like at the moment? How do you see it looking in the months ahead?
ARBETTER: At this point, wherever the most talented qualified person is, I think we've proven that we can work together really well. So we have folks based all over: L.A., New York are certainly the hubs, but we got folks sprinkled across the country. We bring folks together for shoots as needed. And I look forward to a time when everybody can get together and have more fun. But right now, it's working really well.
Article top image credit: Courtesy of Pepsi
What's next for sustainability in marketing following a year of surprising resilience?
Corporate pledges are increasingly being complemented by more direct ad campaigns as companies like P&G and PepsiCo prioritize the issue.
By: Peter Adams• Published Oct. 14, 2021
Things did not look good for sustainability in marketing at the outset of the coronavirus pandemic. People were panic-buying and pantry-loading en masse, snapping up whatever products were left on the shelf. In the frenzy, loyalty started to slip, while a volatile economy put strains on consumers' wallets that may have impacted their willingness to pay a premium for environmentally conscious brands.
Yet, research indicates that the appetite for sustainability marketed products — a once niche sector that achieved greater mainstream recognition through the mid-to-late-2010s — has remained resilient despite the trials of COVID-19. Such goods outperformed their conventional counterparts across 36 categories in 2020, according to a report conducted between IRI and the NYU Stern Center for Sustainable Business. The vertical overall notched a 0.7 percentage-point increase to reach 16.8% of total purchases in a banner year for CPG sales.
"Sustainability marketed products not only held their own, but actually outgrew CPG as a total," said Randi Kronthal-Sacco, senior scholar of marketing and corporate outreach at the NYU Stern Center for Sustainable Business and an author of the report. "Sustainably marketed products did, in fact, survive the pandemic, and thrive in many instances."
Why is the sector so buoyant despite facing clear challenges? One way of understanding the trend is to break with conventional ways of thinking around CPG. Sustainability marketed products tend to be inelastic and less sensitive to price fluctuations than conventional fast-moving consumer goods, which are currently contending with rising inflation, according to Kronthal-Sacco. It's potentially more instructive to view sustainability labels as acting like luxury industries, where people are willing to shell out more and buy in lower volumes. That's especially true of millennial, upper-income, college-educated and urban cohorts when it comes to sustainability, the IRI and NYU Stern report found — although older age brackets, like baby boomers and Gen Xers, account for the "bulk of sustainable dollars spent."
"Sustainably marketed products did, in fact, survive the pandemic, and thrive in many instances."
Senior scholar of marketing and corporate outreach, NYU Stern Center for Sustainable Business
"Generational differences can be seen in sustainability definitions, attitudes and purchase behaviors," wrote Larry Levin, executive vice president of consumer and shopper marketing at IRI, in the research. "Brands and retailers must be able to optimize packaging, labeling, websites and messaging to reach sustainably focused audiences most effectively."
At the same time, demand for sustainable goods is climbing as consumers seek out everyday ways of lowering their impact on the environment. Summer months increasingly bring record heat waves, raging wildfires and intense flooding, making the disastrous effects of climate change harder to ignore. Brands, too, are feeling the pressure to take bigger steps to address the crisis — which is evident in the deluge of pledges to rethink everything from packaging design to agricultural practices — and could make their solutions a larger part of consumer-facing marketing as mandates specific to the pandemic continue to recede.
"People being impacted by climate personally and climate change in the broad sense has definitely risen to one of the top problems that individuals recognize," said Kronthal-Sacco. "For that reason, I believe that there has been a large uptick in interest by consumers and a large uptick in interest by manufacturers and retailers to deliver more sustainable supply chains and more sustainable products.
"If they don't, it's kind of adapt or perish," she added.
Educating the population
Marketers with a clear stake in the purpose arena have long made sustainability a part of their messaging to the public. Kronthal-Sacco pointed to Unilever as a continued leader in the CPG space. But the scale and number of initiatives have felt more voluminous in a grim period for climate forecasting.
"I do think [sustainability] is the next agenda choice for CPG and retailers," said Kronthal-Sacco.
"As we are preparing the 2022 report, we find an increasing number of new products incorporating sustainability claims, as sustainability becomes table stakes in a number of categories," she wrote in a follow-up email.
That's true of both product design and larger corporate strategies. Mars, in the fall of 2021, announced it would try to achieve net-zero greenhouse gas emissions across its value chain by 2050, a target derived from the goals of the Paris climate agreement. The Skittles marketer previously stated it would shoot for net-zero emissions in its direct operations by 2040. PepsiCo, a competitor, unveiled a wide-ranging pep+ initiative around the same time that includes pledges to reach net-zero emissions by 2040 and become net water positive by 2030, along with cutting use of virgin plastic in its portfolio.
Marketing is an increasingly important part of the formula. The pep+ announcement was complemented by a Pepsi campaign that enlisted NFL stars — the beverage is a league sponsor — to explain the benefits of recycling to football fans. The American Beverage Association, an industry group that represents The Coca-Cola Company, PepsiCo and Keurig Dr Pepper, is currently promoting an "Every Bottle Back" platform in conjunction with World Wildlife Fund, The Recycling Partnership and Closed Loop Partners that tries to educate the public on the value of recyclables with videos on platforms like Twitter.
"It's quite significant," Kronthal-Sacco said of the volume of such sustainability campaigns. "Particularly in social media, you're seeing what had been a dearth of communication become an abundance of communication around sustainability and how brands are incorporating a sustainable agenda into their offerings. I expect that to explode in the coming year."
Still, other marketers are hesitant to put sustainability front-and-center in their messaging, even as they adopt more sustainable practices in their operations. Kronthal-Sacco suggested the uncertainty could stem from a fear of alienating certain consumer groups — climate change remains a highly politicized issue — or due to near-term supply chain disruptions that have roiled planning.
"I think they are just trying to get product out," said Kronthal-Sacco. "I don't know what the conversation will be."
Looking past the short-term obstacles, it's harder to ignore the business case for sustainability. Valuable young demographics care more deeply about fighting climate change, and will reject brands they view as out of line with their social values. Nearly a third of Gen Zers and 28% of millennials have taken an action, like donating or volunteering, to tackle climate change, according to Pew Research.
"You have the younger users who are differentially concerned and will age and have greater purchasing power," Kronthal-Sacco said. "They're also, from a manufacturer and retailer standpoint, the future consumer.
"Both those dynamics happening, I think, will catalyze the sustainable agenda in CPG," Kronthal-Sacco added.
Sustainability-marketed products have also adapted well to channels that are climbing in significance for marketers. In 2020, the e-commerce share for sustainability-marketed products among CPGs grew 65% versus that of 2019, seven points higher than the gains notched by conventionally marketed counterparts, IRI and NYU Stern found. Online shopping presents opportunities to offer more detail on why a brand is sustainable as compared to the more limited space on physical packaging and shopper marketing placements around crowded store shelves.
"Even if you're not communicating it on a pack, there's so much real estate to communicate that in their description of the product," Kronthal-Sacco said.
Marketplaces are recognizing that more brands view sustainability as a key differentiator. Amazon, in the fall of 2020, launched a program where products that achieve one or more of 19 different sustainability certifications will receive a special label on their page. Sustainability-marketed products performed better online than in store in 75% of the categories examined by IRI and NYU Stern.
"Again, it's not just for consumers who are interested in ethical consumption, but also for the manufacturers and retailers," Kronthal-Sacco said of the sustainable agenda. "The retailers, in general, are quite concerned and have seen increased demand by consumers to help them pick a more sustainable choice."
Article top image credit: Retrieved from Tide on April 01, 2021
Once an afterthought, brand licensing reaps billions for CPGs hungry for growth
Hershey, Conagra and Post are a few companies using the strategy to expand their business, build equity and keep products relevant.
By: Christopher Doering• Published Feb. 22, 2022
Despite an enviable portfolio of iconic billion-dollar brands and widespread recognition, even a well-known company like Hershey sometimes needs a little help reaching consumers.
In early 2020, Hershey, the 128-year-old manufacturer behind brands such as Reese's and Kisses,identified a market opportunity for healthier chocolate milk as part of an effort to position itself as a bigger player in the burgeoning better-for-you space. What the snack and confections giant needed was a low-risk way to enter the segment. Hershey had the chocolate and Ernie Savo, its head of global licensing, thought New Zealand-based dairy company A2 could supply the milk.
Savo jumped on the phone with A2's U.S. CEO, Blake Waltrip, to gauge his interest in a brand licensing deal where Hershey would use the company's name and its proprietary milk, a product that has thrived in an otherwise struggling category by removing a protein known to cause stomach discomfort.
The initial pitch was met with some skepticism by A2 because the proposed co-branded product would be a deviation from the better-for-you, organic and plant-based section of the milk aisle where A2's products are typically found, formats that Hershey itself isn't instantly synonymous with, Savo said.
"At first blush the CEO felt I was crazy," Savo recalled.
Hershey soon came back armed with data showing how the premium milk would fill a consumer need while helping A2 expand its exposure in the store.
"You have a unique point of differentiation in the dairy space but don't really have a ton of brand awareness as to what A2 is, and I have this amazing chocolate that can make your chocolate milk taste a whole lot better and I need a point of difference in my chocolate portfolio," Savo told Waltrip at the time.
Eight months later the two sides hammered out a deal. The chocolate milk, which contains 8 grams of protein per serving and eschews artificial flavors, colors and preservatives, hit shelves in the U.S. last month.
From cookies to underwear
Once an afterthought for many multibillion-dollar food and beverage manufacturers, brand licensing deals are rapidly evolving into a lucrative source of revenue for CPGs aiming to grow their business, build equity and maintain or expand a product's relevancy in an industry beset by mounting competition and changing consumer tastes.
Global sales revenue generated by licensed merchandise and services in food and beverages has steadily climbed from $15.2 billion in 2015 to $16.5 billion in 2019, according to data tabulated by Licensing International. The industry was responsible for about 6% of the $292.8 billion in global sales revenue generated in 2019 across all sectors.
While the ongoing pandemic has upended business operations and made tabulating information since then more challenging, a report released last June by License Global ranked several food and beverage players among its truncated 2020 list of the top 75 companies by global retail sales of licensed and direct-to-consumer products.
Hershey was the top food company at No. 24 with licensed products using the company's brands generating $1.7 billion in sales in 2020. Keurig Dr Pepper was 33rd with $750 million, followed by Diageo, Anheuser-Busch and Jelly Belly.
"There is probably more excitement around the true value this creates more than ever," Savo said of licensing. "You can get a lot done with a little bit of resource, and therefore it becomes a really nice, a really profitable business."
In the typical licensing deal, one company agrees to follow certain conditions for the right to use another company's brand. The licensee then pays a royalty fee that is usually based on sales.
Licensing is divided into two distinct but equally important categories.
The first one expands a CPG's offerings into adjacent food or beverage categories through a new product. These partnerships tend to prioritize generating revenue for a longer period of time while helping to bring lapsed users back to the brand or connect it with new audiences.
In the second option, which tends to be for a shorter duration, companies link their brand to a cartoon, movie or another opportunity to create buzz, excitement and interest.
"They have two very different objectives but very important ones," said Leah Broeders, who oversees licensing at Post's consumer brands division. "The trick that we try to do is balance between the two, and how do we have that kind of steady drumbeat of those longer-term revenue drives but pulse in some of these fun and expected things in the right times and places?"
"Realistically, it's not a panacea. ... It takes time just like every other function of the business. But it can provide you access you're never going to get because you're never going to have an abundance of resources."
Vice president of strategic brand partnerships, Valen Group
While some deals garner immediate, short-term interest among consumers, licensing agreements can be more than just a quick marketing ploy. They can be an important tool to attract new consumers who might otherwise not get exposed to the brand, or to connect with a younger demographic who will play an essential role in maintaining sales and market relevancy into the future.
Amanda Cioletti, an event and content director for the Global Licensing Group at Informa Markets, said Fruity Pebbles-branded makeup is a way for Post to reach younger consumers who in the past would have been exposed to the cereal during their Saturday morning cartoons. Today, Gen Z consumers are more likely to connect with the brand at their favorite cosmetics store or while spending time on Facebook or YouTube. The makeup also can tug at the heartstrings of adult consumers who grew up with the Flintstones cartoon and the cereal, giving them a sense of nostalgia.
In the food space, few brands have as wide a reach when it comes to brand licensing as Hershey. The company's licensing portfolio has swelled to more than 150 agreements.
Its Hershey, Reese's, Kisses, Jolly Rancher and Heath brands are among those that can be found on food products ranging from cookies and muffins to frozen desserts and cereal. In general merchandise, Hershey brands adorn clothing, jewelry, ornaments, puzzles, home furnishings, body and cosmetic products and even underwear.
In some cases, Hershey has prioritized using licensing to own an entire experience. For example, with its chocolate bar associated with making s'mores, Hershey has partnered to broaden its reach with grilling tools used to make the gooey treat, wet wipes to clean up the mess and sandwich bags to hold ingredients preportioned for entertaining in today's COVID-19 world. It not only provides consumers with solutions, Savo said, but benefits retailers and the company through prominent store displays and higher basket sizes.
CPGs used to lump licensing revenue into their financial results, but now more companies are separating it out to show how much money they are generating and highlighting it to Wall Street analysts and investors during their quarterly earnings reports, said Cioletti. The financial windfall and success licensing provides in helping companies grow their brands is only serving as a catalyst for executives to seek out other partnerships.
"You're going to see more and more on the shelf at your local grocery store," Cioletti predicted. "Once [CPG companies] see sales increase, once they have the data to support expansion, they will."
In addition to creating revenue through product extensions, brand licensing can also provide a lift to core brands.
Post, which has licensed Pebbles for use in ice cream, protein powders, cake mixes and other products, has seen the increased visibility provide a tailwind for the 51-year-old cereal. Brand licensing deals signed by the company during the past few years contributedto the 6.7% increase in sales of Pebbles cereal in 2021, the company said.
Research conducted for Hershey by Numerator in 2019 found when consumers purchased one of the company's licensed brands like Reese's Puffed Cereal or a Hershey baking mix — both collaborations with General Mills — shoppers were on average four times more likely to also have purchased a Reese’s or Hershey’s confectionary item during the same shopping trip.
Overcoming product failure
Licensing plays an invaluable role in mitigating the risk that comes with launching a new product. In a CPG category where 85% of products typically fail within two years, according to Nielsen, companies are looking for any way to give themselves an advantage.
Brand licensing is typically faster and less costly than if a company decided to develop a product from scratch, while allowing each partner to piggyback on the benefits of the other — such as a brand name, experience making or marketing a certain product, understanding how to reach a specific consumer and industry connections.
A few years ago, the innovation team at Post noticed an opportunity for a coffee-flavored cereal after conducting research with consumers. But another launch was a risky endeavor after prior iterations created by the manufacturer failed.
The St. Louis company, which has also partnered with Mondelēz on cereals with Oreo, Chips Ahoy! and Honey Maid, determined it could increase its chance of success by "layering on a brand," said Broeders with Post. It eventually entered into a licensing deal with coffee giant Dunkin’ for Caramel Macchiato and Mocha Latte cereals launched in 2020.
"The Dunkin' piece of it gave us the reason to try another coffee cereal in the market," Broeders said, noting it has achieved "very broad acceptance among retailers" after its launch.
By adding another brand to the mix, a food or beverage item has a better chance to reach new customers and demographics or enter previously unexplored sections of the store. Licensing also can act as a point of differentiation by allowing a product to stand out from its competitors.
"Where we see the greatest successes is where you take a brand and you naturally extend it into a category where the consumer will nod their head and say 'Oh yeah, you've always been here, or I recognize this brand, even though the brand hasn't been there, ' " said Jeff Dotson, vice president of strategic brand licensing at the Valen Group.
With several brands competing for space in frozen food, restaurant chains Red Robin and TGI Fridays have managed to thrive on retail shelves through deals to market their appetizer lineups in the ready-to-bake category, Dotson said. (Conagra Brands, which originally held the Red Robin licenses, passed them on to Lamb Weston as part of its 2016 spinoff of frozen potato maker, while Kraft Heinz oversees much of TGI Friday's store products.)
In the case of Red Robin, Dotson said the chain's steak fries and onion rings "seamlessly translated to retail" and are viewed by shoppers as "authentic" as those they would purchase at the restaurant. Retail sales are now estimated to be more than $40 million annually, with both products leaders in their respective categories, he said.
Maintaining a copacetic relationship
While licensing deals can lead to lucrative payouts or broader appeal for a product, they can be difficult and time-consuming to put together and equally as hard to follow through. The business partners need to manage royalties generated from the product, make sure they are complying with the deal's requirements and approve all aspects of the product line, including packaging and marketing.
"Realistically, it's not a panacea. ... It takes time just like every other function of the business," Dotson said. "But it can provide you access you're never going to get because you're never going to have an abundance of resources."
Jel Sert, a manufacturer of Wyler's Light Drink Mixes and Fla-Vor-Ice freezer pops, has partnerships with industry heavyweights such as Coca-Cola, Mars Wrigley, Hershey and Sonic Drive-In to produce freezer bars and drink and dessert mixes.
"It really is a lot of work to care for the partnerships and we have all the compliance integrated into every department," said Nancy Samani, Jel Sert's vice president of licensing. "Everyone just understands how to manage a licensing relationship. It's a critical part of our marketing strategy, our growth strategy, the way we do business."
Brand licensing enables the 96-year-old Jel Sert to quickly enter a new or under-penetrated category and reach shoppers by taking advantage of a product that already has widespread recognition and consumer affinity. A licensed brand helps Jel Sertget immediate national distribution in big retailers such as Walmart, Dollar General and Walgreens, Samani said, giving it a similar heft to that of its larger and deeper-pocket CPG competitors.
In pitching a partnership, she said JelSert highlights its licensing experience and market-leading position in its categories, as well as the company's ability to get products to market faster due to its manufacturing facilities and in-house R&D department. Jel Sert comes armed with reams of data highlighting prior licensing deals it can use as a selling point — including potential royalties and the benefit to the core brand.
"Licensing is a big part of what we do in building our business," Samani said. "But I think we're also really important to our licensors because of the volume of sales we are able to achieve for their brand and the recognition that we can further [grow] their brands."
Finding the right partner
Even for companies that are licensing veterans, lining up a deal can be an arduous process.
When Conagra Brands uncovers an opportunity not being met by an existing product, the maker of Duncan Hines, P.F. Chang's frozen meals and Slim Jim will draft a rough outline of a potential solution's ideal attributes, packaging and even how it could be marketed. The roadmap helps executives determine if the company could create the product through one of its own brands, or if it would be better to partner with another CPG.
"Borrowing equity sometimes makes sense, especially if we are really trying to create a new flavor or get into a new aisle or really kind of take another brand and apply it to ours for reasons to make it more contemporary or cooler or more buzzworthy."
Senior director of predictive demand science, Conagra Brands
In finding a partner, Conagra combs through retail data to look at the household penetration of the prospective brands, their growth trajectory and whether bringing the two items together would make sense. The food manufacturer has struck a number of high-profile deals in recent years for some of its biggest brands, including with Coca-Cola for Snack Pack Fanta Gels and General Mills for Cocoa Puffs cereal that contains Conagra's Swiss Miss hot cocoa mix.
"Our charge is to really make sure that our brands, a lot of them being iconic, are fitting what consumers want today," said Ashley Lind, senior director of predictive demand science at Conagra. "Borrowing equity sometimes makes sense, especially if we are really trying to create a new flavor or get into a new aisle or really kind of take another brand and apply it to ours for reasons to make it more contemporary or cooler or more buzzworthy."
In 2019, Conagra's demand science team watched as at-home bakers, restaurants and foodservice establishments created over-the-top mashups such as rainbow cereal-infused cheesecake, bars, cookies and cakes. Even as web searches, Pinterest posts and other data showed this was gaining momentum, another trend was emerging too: Social media posts indicated people were often failing and their ideas didn't always turn out as planned. They needed help.
"We knew there was this opportunity, a problem that people were trying to solve," said Lanie Friedman, Conagra's senior director of brand communications.
After looking at the top 15 or so leading cereal brands, Conagra settled on Post's Fruity Pebbles with its bright colors, signature taste and strong category position. Pebbles has been an anomaly in an otherwise downtrodden cereal market, grabbing the most market share out of any cereal brand in 2021 and recording eight straight years of growth, according to data provided by Post.
Last summer, Conagra launched Duncan Hines Epic Baking Kits with Fruity Pebbles that featured the cereal as a batter mix-in, frosting flavoring and as a topping. The baking mix has posted a "solid" return since its debut, according to Conagra, with Epic Fruity Pebbles ranking as the top-selling new item in the baking category in 2021.
"Licensing is something we've definitely embraced because it's a way to drive news and another level to make our brands more contemporary and interesting," Friedman said. "We've got a really strong core and so we look at co-brand as extensions to incremental growth."
Pressure to succeed
For other CPGs, licensing can aid in refreshing an aging product or help it become associated with attributes popular with choosey consumers, such as sustainability or health benefits, further boosting the brand's credibility and reputation. For a brand in a stable, mature market, even a scant half a percent gain in market share can generate tens of millions of dollars in additional revenue.
"There's pressure around organizations, pressures in terms of cultural shifts, which are changing consumer expectations. This leaves many portfolios of products exposed ... in terms of the investment required, the skills required and the time required to adapt," said Lee Powney, a senior partner with Vivaldi, whose firm has worked with companies including Coca-Cola and AB InBev. "I see licensing playing a very interesting role in augmenting existing portfolios."
It's a big reason why Hershey has doubled down on bringing its signature chocolate brand into other food categories. Savo said chocolate is present in a lot of places beyond confections and if Hershey was absent in those spaces, it could end up hurting the brand.
"While we're still the leader as a chocolate bar, our leadership position has the ability to start to wane as consumers start to think of chocolate more genetically versus chocolate at Hershey," Savo said. "And so we do insert ourselves everywhere where chocolate is a big component of it."
Licensing is not without its risks. Companies that let another business use their brand naturally have to cede some control over how the items are produced, distributed and marketed — a struggle for executives who are accustomed to overseeing every aspect of the process. There also is the possibility of blowback if the new product is involved in a food safety recall or one of the partners gets embroiled in a scandal.
Companies “leave a lot on the table” when it comes to brand licensing, Valen Group's Dotson said. “There's a lot of things out there that I think strategically get passed on very early because people are managing risk in a way that isn't really about risk. It's about not making a mistake."
As licensing gains momentum, there is a possibility that companies overextend a brand's reach into too many areas, enter into deals so far removed from their core category or business that they sow confusion among consumers, or develop products that simply don't catch on.
Even as Post readies for more Pebbles licensing deals in 2022, Broeders said the company is carefully watching to ensure that any opportunities enhance brand equity rather than dilute it. Many product extension ideas for Pebbles never gain much traction at Post, including a brief discussion a few years ago about moving it into alcohol.
"Every time you turn around, it's like what's the next thing brands are partnering on? ... I think what becomes key in these situations is making sure that you're making smart decisions and not saying 'yes' to everything," said Broeders. "Sometimes saying 'no' might be the more strategic decision."
Article top image credit: Christopher doering/Marketing Dive
General Mills names chief brand and disruptive growth officer after sunsetting CMO role
By: Peter Adams• Published Dec. 17, 2021
General Mills named Doug Martin as chief brand and disruptive growth officer effective Jan. 3, 2022, according to an announcement. The news signals how legacy packaged goods companies are rethinking their marketing leadership as the category undergoes intense technological transformation spurred by the pandemic.
Martin's role, which reports to Chief Strategy and Growth Officer Dana McNabb, is an expansion of his prior work as disruptive growth officer overseeing General Mill's internal startup incubator, GWorks, and its external venture offering, 301Inc. The executive also served as interim chief marketing officer starting July 2021 and held various jobs at the company over a 15-year tenure. Previously, he acted as president of General Mills' North America Dairy operating unit.
Under the new title, Martin is tasked with leading global brand-building and emergent business innovation initiatives for General Mills.
General Mills is trying to place innovation first with the promotion of Martin, who has recently spearheaded key venture efforts for the marketer of Cheerios, Pillsbury and Häagen-Dazs. Packaged foods companies have been under pressure to invest more in digital as the COVID-19 crisis accelerates the adoption of e-commerce and direct-to-consumer offerings. Meanwhile, CPGs are contending with challenges around ad-targeting and measurement due to the deprecation of third-party cookies and other identifiers.
In a statement, McNabb said that more closely wedding brand operations with innovation would allow General Mills to increase relevance with existing customers and unlock new audiences. Adopting a startup mentality has grown more common in the category to stay on the ball with increasingly fast-moving trends. Procter & Gamble has enacted a strategy it calls "constructive disruption" that recognizes the need to quickly change course in a society under pressure, while also attempting to exert greater control over media and marketing.
For General Mills, the news marks another step to evolve marketing leadership. In May 2021, it parted ways with global CMO Ivan Pollard and announced it had no plans to seek a replacement. Martin's title prioritizes brand and growth versus general marketing, potentially pointing to a larger focus on performance-based and experience-driven channels. General Mills previously attributed the retooling to its Accelerate growth strategy that is built around four directives: boldly building brands, relentlessly innovating, unleashing scale and being a force for good at both the community and global levels.
"The pandemic showed us just how critical we are to our consumers," Martin said in a press statement around the promotion. "As we head into the future, we have the opportunity to become even more important in their lives, as we solve problems and deliver joy through our brands. We'll continue to learn, experiment and iterate with new brands and business models."
The CMO title has broadly become less common in recent years as marketing mandates expand to encompass more tech and data-driven functions, though some CPGs have reinstated the role after appearing to sunset it for good.
Article top image credit: Courtesy of General Mills
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