As we stated in our February article, Values-Based Marketing: Reframing Your Direct-to-Consumer Strategy to Win Hearts and Minds, marketers are turning to values-based marketing to meet changing consumer expectations and position their businesses for long-term growth. In this, the second article in our series on values-based marketing, we will share examples of businesses and brands who have activated value-based strategies—those who have performed the investigative work, have memorialized their purpose, and are leveraging their value propositions to shape and build trusted relationships with consumers that extend beyond, and even entirely circumvent, marketplace dynamics.
You are reading this because you are prepared to shift your marketing from product-centric to consumer-centric. You are prepared to reframe your company’s branding, advertising and promotional messages to emphasize your values over features. You are driven to create a newfound alignment with your customers and potential customers, and for this we applaud you.
Across industries, this shift is occurring at an accelerated pace. Nowhere has this appeared more evident than through the commercials of Super Bowl LII. From Jeep and Dodge to Verizon and T-Mobile among them, these brands approached this colossal audience engagement opportunity with messages clearly conveying their values. The underlying purpose was to sell a product of course, but the manner in which it was done was distinctly values-based. These commercials were less concerned with product features as they were focused on purpose, on how one feels as an owner or a customer, on what one believes in or stands for, or asking you if or implying you are a member of a like-minded tribe. This is genuine, authentic, values-based marketing activation.
For the purposes of this article, we are going to focus on one industry in which values-based marketing is continually and consistently being activated from the supply chain to the shelf—food and beverage. Within this consumer packaged goods industry are value-oriented macro trends like mergers and acquisitions, transparency, sustainability and engagement, each and all of which are shaping the way brands not only market but make and package their products. And we as consumers—how we view, think about, shop for and consume food is at the epicenter of them all.
Mergers & Acquisitions
According to a December 2017 Bloomberg News article, big food companies from Kraft Heinz to Conagra are considered possible acquisition suitors as the industry giants struggle to generate growth. Faced with an array of challenges, like shifting consumer preferences and Amazon’s expansion into the grocery business with its acquisition of Whole Foods, tapping smaller, more consumer-centric, namely specialty foods brands, is not only a way for these companies to stimulate growth, but to conveniently adopt a meaningful set of values-based traits.
Where the value for companies on this scale has historically been defined as cost and communicated as savings, through mergers and acquisitions, or first macro trend, they can shift to embrace and promote the principles and ideals of the brands they have obtained. Albeit this is more expeditious than reframing a complex organization from bottom to top, inside and out, the authenticity of these newly integrated and professed values at the parent company level is and ultimately will be up to consumers to decide. If 2017’s $42 billion in acquisitions is any indication, big food companies are definitely hedging their investments on substantial gains in consumer confidence and loyalty.
From venerable industry sources like the Grocery Manufacturers Association, Food Business News and the Specialty Food Association, among others—mergers and acquisitions are frequent subject matter. For example, in February of this year, Nestlé acquired the majority stake in Ecuador-based Terrafertil, a producer of organic, plant-based foods and healthy snacks. Coincidently, consumer interest in and consumption of plant-based foods have been projected a 2018 food industry micro-trend to watch. According to Laurent Freixe, CEO of Nestlé Zone Americas, this acquisition “supports Nestlé’s purpose to enhance the quality of life and contribute to a healthier future.” Back in January, Tyson invested in Memphis Meats, a food tech company that produces lab-grown beef, chicken and duck. The move literally seats Tyson at the protein innovation table with co-investors Bill Gates and Richard Branson. It likewise enables them to adopt Memphis Meat’s values-based purpose, which “addresses today’s challenges for the environment, animal welfare and public health.”
Other notable consumer-driven mergers and acquisitions in recent years include Peet’s Coffee & Tea’s acquisition of Mighty Leaf Tea—a decision rooted in “shared core values;” J.M. Smucker’s acquisition of Sahale Snacks—to “connect Smuckers with new consumers in the on-trend snacking category…instantly adding non-GMO choices to the product portfolio;” Mondelez’s acquisition of Enjoy Life Foods—to “expand our portfolio into ‘better-for-you’ areas for consumers looking for healthy-lifestyle options;” and General Mills acquisition of Annie’s—which “brought consumer trust and appreciation of their purpose-driven culture to the marriage.”
All are proof that mergers and acquisitions are and should be viewed not only as pathways to, but also as definitive forms of values-based activation strategy.
Openness and honesty are becoming the currency of trust for consumers. As such, the topic of transparency, our second macro trend, is a key value proposition for brands. It is a broad subject that is as much about health and wellness benefits as it is a symbol of product quality. The rise in importance of transparency is being driven by cultural shifts which are being shaped by changing values.
Consumers have become and are increasingly becoming more conscious and deliberate about the foods they choose to eat and why. They want full transparency into the origins of ingredients, into processing, packaging, shipping and retailing, from seed and field to factory and label, or from the supply chain to the shelf. To put it simply, they value being able to make informed food and beverage decisions.
If, for example, you are a food brand weighing the pros and cons of transparency consider this, it “is no longer a ‘nice to have’ quality for food companies—it really is mandatory in the eyes of the consumer,” explains Katy Jones, chief marketing Officer for FoodlogiQ. “Building a culture of transparency-focused on safety and quality is critical for food companies.”
Campbell’s is a perfect case study on the subject of values-based activation. Its Real Food Philosophy is an operational principle and consumer engagement initiative shaped by its purpose, which is to provide food and drink that is good, honest, authentic, and flavorful—made from ingredients that are grown, prepared, cooked, or baked with care. And although its purpose was an inspirational guiding light for its workforce, its depth of meaning was mostly inaccessible to consumers. Because of this, Campbell’s set out to make visible that which it had unintentionally hidden from consumers for years—how it makes its food and drink. Today, Campbell’s is setting a new standard in transparency, and it is well on its way to becoming the most trusted food company in the world.
The consumer desire for transparency has been enabled by technology. In a culture in which information is readily available and reviews influence decisions, access is expected. Thanks to social media, consumers voices resonate and reverberate across digital time and space, translating into advocacy or opposition for brands. The requirements of transparency may sound like a burden, but if approached with the consumer’s best interest in mind, they also represent a powerful, values-based marketing opportunity. Food companies that can provide transparency will grow in consumer esteem and, ultimately, brand equity. It is critical, however, that what is promised and marketed is delivered. Nothing makes a customer lose faith in a company faster than false promises made to sell them a product.
Not unlike and often discussed in the same context as transparency, sustainability, our third macro trend, is yet another values-driven proof point in the eyes of consumers. The farm-to-table restaurant movement is a familiar topic equated with sustainability, however, it is a far more varied and complex subject matter than responsible farming exclusively. Within the consumer packaged goods industry, sustainability involves the complete lifecycle of food products—from agriculture, manufacturing, packaging, and distribution to use and disposal.
In terms of percentages, agricultural is the largest contributor to the lifecycle impact of food, typically 50 percent or more of the environmental footprint. Food processing, at 20 to 30 percent, is the next most significant contributor, a resource-intensive factor in the supply chain. Surprisingly packaging impact is limited in comparison, averaging around 10 percent, yet it can be as much as 20 percent due to the energy needed and used for production and packing. Retail and direct-to-consumer transportation equate to roughly 10 percent, and consumer use rounds out the lifecycle.
Taking a closer look at packaging, a number of brands have recently committed to overhauling their packaging, including the issue of tackling plastic waste. Evian and Coca-Cola among them, there is clearly a PR opportunity in play as concerns around the growing problems facing marine ecosystems are on the rise. But for consumers, it has to be about much more than PR. To gain their confidence, and moreover their trust, food companies must ensure sustainability is not a one-time stunt, but rather a long-term commitment.
To summarize, sustainability for food companies could be better defined as how they are consciously bringing food to the table, whether in a restaurant or at home, in environmentally-friendly ways. In a 2017 study conducted by Cone Communications, it was revealed that 92 percent of U.S. consumers have a more positive image of companies who support environmental issues, and that 87 percent are more likely to buy their products as a result. And according to a 2017 Edelman brand study report, 50 percent of global consumers are “belief-driven” buyers, willing to buy a brand, switch from it or boycott it completely based on its stances and practices.
Think about that—for every two consumers the world over, one will either choose or refuse your brand based on their values and whether or not yours are aligned. Sustainability is, therefore, a powerfully compelling and convincing values-based activation strategy.
And this brings us to our fourth and final macro trend—engagement. Consumers do not like to feel homogenized, clearly illustrating the need for food brands to understand the mindsets of people who are either currently buying their products or who could be. Engagement is about the personal experience that is both meaningful and relevant. So if consumers are seeking to be treated as individuals, then engagement driven by personalized experiences is an ideal values-based activation strategy.
With consumers becoming more purposeful in their consumption, with attention to issues like transparency and sustainability on the rise, and with increased concerns around health benefits and hindrances, conscious consumerism is and will for the foreseeable future continue to gain momentum. And although the gap between aspiration and action varies by individual, its cumulative presence makes for an undeniable argument for personalized experience engagement.
Whether it is individualized conversations on social media, sharing curated content or providing product recommendations, food companies must get to know the need states, behaviors, and in particular, the values of their consumers in order to personalize and influence their purchasing decisions. So how do you get to know them? You talk to them. You query them. You survey them. You give them access to tools which easily enable them to provide you with the information you seek and need. If your value proposition is articulated to them, genuinely and with transparency, and their values align with yours, they will shower you with personal information. It is what you then do with it that matters.
Do you have customer relationship software? Have you employed marketing automation technology? If not, get it. If you are not using it, start.
Are you actively segmenting your customers? Are you developing consumer profiles? Are you marketing to look-alike audiences? Are you delivering seamless omnichannel experiences? All of these as tools, practices and strategies enable personalization, and all are rooted in the motive of engagement.
The consumer expectation for personalized brand experiences is growing along with sampling digital shopping options, for example, which are driven by product curation, device synchronicity and home delivery. Consumers are certainly motivated to engage in opportunities to save time and money, but they likewise desire to be a part of something rewarding. If you can create a level of engagement that is both personally gratifying and values-based, then your reward is their devotion.
“If people believe they share values with a company, they will stay loyal to the brand.”
– Howard Schultz, Executive Chairman, Starbucks
Next month we will conclude our series on values-based marketing with an article focusing on content, from strategies to storytelling.