4 WAYS SMALLER FMCG BRANDS ARE TAKING ON THE BIG BOYS

Maddie Cullen
3 October 2018

Big brands have traditionally dominated shelf space, with bigger budgets and strong relationships with supermarkets.

But right now, smaller start-ups are the ones to watch. Every week there’s a new article on what big brands can learn from them or an entirely new brand popping up.

We’ve broken down 4 ways that these smaller brands are coming up on top and pushing out the big boys.

Appeal

Trust in big brands is down year on year. Many consumers no longer look for familiar names for quality and instead opt for new and fresh products.

And innovation is what catches the eye. As globalisation widens our horizons, consumers are always looking for something original, unique or local and small FMCG brands usually fit this bill.

Millennials shopping             (Image: The Robin Report)

For most consumers aged 25-35, what they buy is a direct reflection of who they are, so finding cool, unknown brands is especially important. They want to be individual and feel as if they’ve ‘discovered’ something. This sentiment is very hard for big brands to replicate so challengers will likely win.

Agility

Smaller brands are much more nimble too. Unlike the lengthy product development process of bigger FMCG brands, start-ups can make quick decisions and changes.

Challengers can react to the latest trends and provide relevant products before bigger brands can even start the process.

And with this product development, start-ups will fill a niche that bigger brands might not even have noticed yet.

With the wellness movement, people switched up their diets before bigger brands could notice, but small start-ups filled in gaps they saw with nutritious and natural food. This meant that consumers were loyal to them before big brands even released their products.

Visibility

Supermarkets have wised up to the fact that many consumers actually want less choice. They’re paring back vast options on shelves and being much more selective. Historically this meant that big brands were likely to muscle through to the front. Bigger budgets meant they could buy the best shelf space.

Although, that could be changing. Supermarkets are now bringing in smaller brands to appease consumers looking for niche offerings. So start-ups that provide the right thing can actually sneak in. This is especially driven by the health and wellness trends as big brands often don’t fulfil the needs of the customer like start-ups do and supermarkets want happy customers! In fact 88% of new products added to shelves have been from small and medium brands.

Sainsburys online shelf space soup                (Image: Sainsburys)

As well as this, more people are shopping online. With unlimited ‘shelf’ space big and small brands have equal visibility. This means that it doesn’t matter how much money a big brand has, challengers can sit right next to things from Unilever, Procter and Gamble or L’Oréal.

Communication

One of the biggest ways’ challengers have been gaining consumers is their non-traditional communication.

Consumer are blasted with information and marketing on a daily basis, so it takes a lot more than it once did to reach them. And the biggest consumer group of young people want a new conversation.

Smaller brands go where the consumers are: social media. With the founders usually still present, challenger FMCG’s can build an authentic and interesting voice, unlike the big faceless brands.

 

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Thanks to everyone including @leandramcohen who caught the typo on one of our US packages where there is a to, too many. It would be a shame, however, if we felt compelled to go back to human copywriters because of this one simple mistake. The robots were writing such great copy for us, but they have a weakness in that they are unable to proofread backwards and therefore are incompetent when it comes to catching excessive to’s (that’s the wrong way to spell the plural of to, isn’t it?). The matter of course is under consideration, but a step backwards to using real humans is a sensitive issue for the robots and therefore not something that we will consider lightly, at least not as long as the robots are in charge.

A post shared by Oatly (@oatly) on

However, bigger brands are wising up. They can see what is working for challengers and are throwing their money and resources to replicating it. And it’s not just for their traditional products, the big players are launching their own versions of challenger brands. Unilever’s Love Beauty and Planet is a great example of this.

There are definitely pros and cons to starting up a small brand, but now seems like a great time. Although there’s increased competition from bigger brands replicating smaller ones, they can’t copy the same authenticity and individuality of start-ups. There are always risks, but challengers that stick to who they are can still beat big brands.

(Cover Image: Campaign)

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