Small is increasingly successful
"The ones that have been successful today are manufacturers that can pitch their brands, connect with their consumers and tap into these high growth products." IRI and BCG Growth Leaders Report
The Australian Financial Review often has interesting articles in its pages, about the food industry I suppose, and the economics of it all - and yesterday's post was derived from one of them. And so is today's. The article was entitled Small is the new big on shelves and the general thesis was that lots of small niche companies are increasing their profits and sales, whilst the big players are often struggling. Of the large companies that are doing well they cited l'Oréal which has launched a new product called La Roche-Posay for women with sensitive skin. I guess that's tapping in to the natural health thing - after all they did buy up The Body Shop.
I am heading this post with a picture of some of Beechworth Honey's products because apparently Beechworth made a whopping 80% increase in sales last year. The range of products the article cited was across the board from Carman muesli bars, Chobani yoghurts, Beerenberg preserves, Thank You nappies, Bhuja snacks and Mayver's peanut butter. All of them have increased their sales mightily.
And come to think of it I had noticed some of these new names in my travels through the supermarkets. In particular I noticed Chobani having a large presence in the yoghurt section, seemingly from nowhere and Carman's in the breakfast section - and yes I had also noticed the Bhuja snacks. They're all interesting and another time I will perhaps look at them individually.
But why are they all so suddenly successful?
According to the IRI and BCG Growth Leader's Report the reasons are all to do with those things we have talked about before - treading lightly on the earth, natural, Australian, hand-crafted and different.
"[Consumers are] seeking healthier options, they're seeking products that prevent illness, some are seeking products that are sourced and made locally, some are seeking products that have a story to tell, some are seeking experiential flavours and some are seeking products that deliver to their own personal values.
The ones that have been successful today are manufacturers that can pitch their brands, connect with their consumers and tap into these high growth pockets."
Some of them have been around for a while but have radically updated their approach - like Beechworth and Beerenberg. Some of them are relatively new.
And hand in hand with the rise of the small is the increasing distrust for the big guys. For their methods of production, exploitation of resources and people and pursuit of profit. Well that's the picture we generally get from the media. Whether it's true or not is not for me to say. I just do not have enough information.
Now another theme of mine is that all of these wonderfully natural, hand-crafted products are incredibly expensive and disregard the needs of the poor. And certainly, looking at some of the jams and preserves I would say that they are in the upper end of the market. And anyway you should all make your own - it's simple to do. Not sure about some of the others. As I say - I might look into a few of them from time to time. It's really very interesting looking into the companies and the people who produce the things we buy.
So what happens when small becomes big? Because, surely that is their aim. And will the upward trajectory continue anyway? Food for thought.
