Expert Column: CPGs Must Think Small to Grow Big
By Ken Harris, managing partner/owner, Cadent Consulting Group and former chairman of Enjoy Life Foods
Ask any Big CPG company what their greatest challenge is today, and each one would likely give the same answer: Growth.
In the slow-growth environment in which we live, one or two points of topline increase is hard won. As a follow-on question, if you ask the companies what they lack the most in terms of achieving growth, they will answer: Focus.
It's not a coincidence that the companies that are growing today in the CPG world have intense focus on their goal. Often, focus is borne out of the ability (and necessity) to do a few things well. Those companies that achieve the level of focus required to grow have started small and then sustained their growth by staying focused.
Looking at some of the major CPG acquisitions in the past 24 months bears this out. Purchases include Annie's by General Mills; Evol by Boulder Brands; Big Heart Pet, Sahale and Enray Foods (Tru Roots) by J.M. Smucker, and Enjoy Life Foods by Mondelez. All of these companies were reasonably small, focused on a specific customer and retailer base that enabled them to grow in double and even triple digits. Why is that?
The reason small, focused companies can grow so rapidly is due to the democratization of media, the willingness of nontraditional retailers to cooperate, and the ability to reach customers through new channels including online. Add to this sophistication practiced marketers who are focusing their attention on these smaller organizations, and it creates a winning combination.
Mondelez Acquires Enjoy Life Foods
Enjoy Life Foods is a great example. The company grew 40 percent year-over-year for the past three years. It's focused on the free-from, allergy friendly space and it has curated a singular purpose: to address the unmet needs of those families who have multiple food intolerances. As important as the mission is the execution. Enjoy Life Foods’ go-to market strategy is a finely woven web of narrowcast media, online advocacy and close alignment with organizations who are supporters of the Enjoy Life cause. These organizations include FARE (Food Allergy Research Education), University Of Chicago Comer Children’s Hospital Coeliac foundation, and others. The daily tracking systems Enjoy Life has in place include dashboards on operational performance, social media and online interaction. The dashboards are distributed to everyone in the company to provide complete transparency and focus on business performance. It's this type of socialization of internal communication that makes performance monitoring transparent to the point where it's everyone's business.
Another example is Enray foods, which was purchased by the JM Smucker Co. Enray started cultivating quinoa before anyone knew what quinoa was in the broad marketplace. The founder, Esha Ray, was able to forge a relationship with retailers like Costco who supported the introduction and cultivated the brand. While some big CPG companies look at Costco as a difficult cost of doing business customer, smaller companies like Enray flourish with Costco support. This support enabled Enray to grow rapidly at Costco so it could eventually move into new channels including supermarkets and mass retailers.
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