Knowledge Bank Blog, Category Strategy, Range & Portfolio

Blending The Old & The New

How many of you have heard the song “Amen Brother” by The Winstons?

You probably think you haven’t.  But, you probably have.  Well, at least a part of it.

In the Spring of 1969 The Winstons were stuck in the studio in need of a B-side to go with their new song “Colour Him Father”.  Eventually, they decided to record an instrumental, loosely based on an old gospel song called “Amen Brother”.

In the song there is a 6 second (4 bar) drum solo performed by G.C. Coleman.  The solo is called the “Amen Break”.

It is the most sampled piece of music in history.  At the last count it had been sampled 2,894 times (it has appeared in 2,894 different songs) – mostly in hip hop music.

Without the Amen Break you probably wouldn’t have had sampling.  And without sampling you wouldn’t have had hip hop music (that might have been a good thing for some of you…).  In hip hop you need the old to help you get to the new.  No Chic “Good Times”, no “Rappers Delight”.  This is true of any music.  No Beatles, no Oasis.

Right, hip hop lesson over…why are we talking about this?  Well, we think that in a lot of FMCG categories there is an older part of the category and a newer part.

The older, or more traditional, part of the category is typically where the majority of sales are.  It is the part that shoppers are very familiar with.  The part they often buy habitually.  The part they often think about less.  Think instant coffee, blocks of cheese, mainstream beer.

The newer, or more modern, part of the category is where there are less sales currently.  But it offers a lot of growth opportunity.  It is the part that shoppers are less familiar with.  The part they buy less habitually.  The part they think about a bit more.  Think coffee pods, speciality cheese, craft beer.

We find that when manufacturers think about category strategies they can place too much emphasis on one part of the category or the other (often depending on where the manufacturer plays).  This means you have a strategy that is biased toward the traditional part of the category = too focused on the present.  Or you have a strategy that is biased toward the modern part of the category = too focused on the future.

But, a great category strategy should do both.  Manage the old and build the new.

So, how can you do this?

Be clear on the growth objectives.  It is likely that you will need to drive different shopper behaviour in each part of the category.  For instance, in the traditional part, penetration is likely to be pretty high.  The growth opportunities often come from higher spend (average price paid).  First, you need to protect average price.  Don’t over promote – it reduces category value.  Second, you need to drive average price up.  Give shoppers reasons to pay more.

In the modern part of the category the growth opportunities are likely to come from new users (getting shoppers to buy into that part of the category) or new usage occasions (getting shoppers to buy products for different needs).

Importantly, the objectives in each part of the category should be complementary.  Together they should contribute to overall category growth.

Be clear on the mix of products required.  What shoppers are looking for in the two parts of the category will differ.  For instance, in the traditional part, they may be looking for larger pack sizes – these are products they buy regularly.  They are likely to be looking for products that deliver brilliantly on core benefits – e.g. fragrance in fabric conditioners.

In the modern part of the category, shoppers are often looking for products that are different.  It could be new formats – e.g. coffee pods.  Or occasion specific products – e.g. snacking.  Or products that meet an emerging need – e.g. cold brew in tea or body shaving in male grooming.  The right product mix keeps the category relevant to the needs of today and the needs of tomorrow.

Be clear on the way you need to sell. In the traditional part, range and space are likely to be slowly decreasing over time.  In the modern part, range and space are likely to be slowly increasing.  In the traditional part, shoppers require less product information.  In the modern part, they are likely to need more information – how to use the products, when to use them, where the products come from.

Products in the traditional part may be well suited to subscription models or auto replenishment – we are seeing this in razors and blades right now.  The more modern part is likely to be about more experiential selling, ideas and exploration – e.g. craft beer, skincare, meal kits.  Different types of products should be sold in different (relevant) ways.

In most categories it is not about getting shoppers to buy from one part of the category OR the other.  For a category to grow you often need them to buy from BOTH.  A great category strategy sets out how to drive both. It’s the blend of the old and the new.

Just like a great hip hop record.

Feel free to forward.  Have a great weekend and speak to you next week.