The Packaged Goods Dilemma

Does anyone care about brands anymore?

Certainly, the Wheat Thins Brand Manager cares deeply about Wheat Thins. The rest of us? Not so much. It’s just another cracker on the supermarket shelf, one choice among more acceptable options than I even care to think about.

I do care about my electronics (Apple), my car (Prius), a few retail chains (Peet’s Coffee, Trader Joe’s), my Titleist golf balls, and perhaps Nike running shoes. But very little else. What brands do you care about? I would wager there aren’t many grocery store products on your list.

My marketing career started with a focus on packaged goods, where classic brands, each with their own loyal, dug-in, life-long, “I know better than you do” followers, battled it out on an epic scale: Coke vs. Pepsi, Crest vs. Colgate, Miller vs. Bud, Maxwell House vs. Folgers and on and on.

Now, who cares? My favorite brand of toothpaste is whatever is on sale at Costco. Coke or Pepsi? Neither. Gave ‘em up, not good for you. My favorite beer is whatever version of IPA, amber lager or other tasty variety is on tap at my neighborhood gastropub at the moment. In fact, if I were still a Miller or Bud guy I’d be out of luck. Drive up and down Ventura Boulevard here in the San Fernando Valley and you won’t even be able to find one in any of the restaurants or omnipresent gastropubs.

Brand apathy has struck packaged brands especially hard, particularly the processed food companies. We just have different priorities and bigger things to think about than our brand of cereal. Moreover, what used to be touted as “wholesome” is now perceived as “junk.” The perimeter of the supermarket, where all the fresh food is sold, now matters far more than the aisles in the middle where all the cans, bottles, packages and jars are found. Middle of the store items – cereal, snacks, shelf stable ingredients, prepared meals, canned goods, etc. – find themselves struggling for relevance and often fending off accusations of villainy for being “fake,” “processed,” “chemical” or genetically modified.

While the causes of this decline could be the subject of a doctoral dissertation, many are obvious and of the marketers’ own making.

As companies shifted the majority of marketing budgets to short-term promotional spending (deals) from long-term image building (advertising campaigns), they trained consumers to buy on deal, essentially communicating that the price was more important than brand.

The advance of technology has hurt packaged goods as much as it has helped in one sense. The big, deep-pocketed companies had a huge advantage decades ago, when their dedicated teams of scientists produced proprietary breakthroughs like laundry detergent that could truly “get your whites whiter and your brights brighter.” The quality of name brands was demonstrably superior to the “off-brand” back then, but that’s no longer the case. Those now taste just as good or work just as well as the name brands now.

I haven’t bought a brand name pain reliever or any other over-the-counter remedy in years. The trade off for nostalgia just isn’t worth the premium to be paid. Nor should be there any doubt about the safety of Walgreen’s acetaminophen vs. Tylenol. (Actually, it was Tylenol, the name brand, that faced a string of recalls from 2009-2013).

The packaged goods companies made another critical decision that seems to have come back to haunt them. Reasoning that it is less costly to spin off line extensions than create entirely new brands, shelves are now lined with bloated, superfluous product lines that often daze and confuse. Moreover, this compulsion to line-extend seems too have seriously eroded brand image in many cases.

Can a single brand name stand for indulgence and health at the same time, as Cheerios attempts with its original product in the yellow box (the goodness of oats!) along with Chocolate, Peanut Butter, Dulce de Leche and Fruity Cheerios?

Can a single brand of toothpaste have versions that stand for sensitivity, whitening, fresh breath, enamel protection, cavity protection and gum health all at the same time? Don’t they all do everything nowadays anyway? Please – I only have a Masters degree – please explain to me the why I should buy Crest 3D White Glamorous White Toothpaste instead of Crest 3D White Advanced Vivid Stain Protection Toothpaste? Or maybe Crest Pro-Health Whitening Gel Toothpaste is the right one for me. Anyone?

Bruce Springsteen detoured from his usual emotional, heartfelt songs full of yearning in his cynical 1992 effort about the rise of cable and satellite TV, “57 Channels And Nothing On.” An amusing screed on the uniquely American mantra of quantity over quality, the song still evokes parallels with fast food, YouTube, celebrity trivia video games and so many other sources of empty calories, literally and figuratively. And I can’t help but think of this song when I stare at exponentially more versions of fewer brands – cynical attempts at building share by shortcut.

The problem is exacerbated because companies are line-extending old, established – and mostly boring – brands. Another version of Cheerios? Really? Can the Cherry Cobbler and Salted Caramel Cheerios varieties be far behind?

That evokes another song for me, coincidentally from 1992 as well. (It seems to have been a very good year for songs about marketing.) “Teen Angst,” by the indie rock band Cracker, poses the following observation:

What the world needs now
Is another folk singer
Like I need a hole in my head.

Abundance of choice is a wonderful thing in theory, but in practice, it doesn’t always raise the bar. According to the Food Marketing Institute (FMI), the number of products in the average supermarket swelled from an average of 8,948 to almost 44,000 today.

44,000 items and nothing to eat? Well, not quite. Objectively speaking, there is still a lot of good stuff to be found in those middle aisles. And of course the real elephant in the room is that companies don’t simply line extend with consumers in mind. Shelf space at Wal-Mart is precious. Consolidating a product line so it makes more sense to consumers may be a great idea, but consumers be damned. Kellogg’s certainly won’t be doing this any time soon if it means ceding retail slots to General Mills.

Still, to consumers, the overwhelming majority of brands simply lack relevance. There needs to be a bigger reason-for-being than “Mountain Grown” or “a warm, wholesome, fulfilling snack in minutes,” something more than an empty slogan or a generic, pedestrian claim.

A can of peas or a frozen snack is unlikely to generate the passion of an iPhone. But the age of the tangible, benefit driven, Unique Selling Proposition has been dead and gone for quite some time. Package goods brands need to unleash their inner passion. Tinkering at the margins won’t work anymore and rational claims don’t mean a thing if they are not leveraged in an emotional context.

There are simply too many irrelevant brands in supermarkets today. And many are starting to go away as a result. P&G is actively shedding brands, and industry consolidation such as the Heinz acquisition of Kraft will hasten this trend.

Still want to be around five or ten years from now? Start thinking bigger. Much bigger. Innovate and reinvent.

We always aspire to tell our clients “something they don’t already know,” and for them, in turn, to tell their consumers something new and relevant. Granted, you’ve heard “think bigger” many times. But do you truly feel the urgency?