On 25th December 1986, 30.1 million people in the UK watched the Eastenders Christmas episode.
Some of you will remember it.
‘Dirty’ Den Watts served his wife, Angie, with divorce papers in the Queen Vic. He’d found out that Angie had lied about having a terminal illness to stop him from leaving her.
It was one of the most watched TV episodes in UK history.
Nearly half the population were watching. Peak terrestrial TV.
It’s fair to say times have changed. Now…
Eastenders averages about 3.5 million viewers per episode.
YouTube is the second most watched media service (BBC is still first.) Two thirds of British households subscribe to at least one streaming service. 19% subscribe to Netflix and Amazon Prime Video and Disney+. Instagram has 38 million active users in the UK. TikTok has over 30 million.
The viewing landscape has changed massively.
In 1986, over 30 million people sat down in the same place to watch the same show at the same time.
Now we watch what we want. Where we want. When we want.
Why are we talking about this?
The FMCG landscape is changing.
The channel landscape is changing. Need to get dinner for tonight? You can go out or stay in. You can get it from a supermarket, takeaway or restaurant. There is more choice than ever before.
The category landscape is changing. Need a snack? There are hundreds of options. Need a drink? Hundreds of options. Need a quick lunch? Hundreds of options. More choice than ever before.
The lines between channels are blurring. The lines between categories are blurring. The competitive set is wider than ever before.
This means that we need to look at categories in a different way.
The old way was to look narrow. Within your category. At your direct competition. This is limiting. It restricts your opportunities for growth.
The new way is to look broader. Outside your category. At the wider (direct and indirect) competition. This is expanding. It opens up your opportunities for growth.
So, how can you do this?
We think you need to answer a few key questions…
Who are you? It sounds deep but it’s very simple. Categories still matter. You can’t just say you’re a snack. You need to say what type of snack. You’re biscuits. You’re cereal bars. You’re a meat snack.
This is the category that you are trying to grow. It defines your direct competitive set. Importantly call yourself what you are. You’re a “condiment.” You’re not an “eating enhancer.”
To drive growth first you need to know what you are trying to grow.
What is in and out. It’s very easy to get lost in the category dictionary looking for the perfect definition. Think the Jaffa Cake biscuit or cake debate fifty times over.
You need to have some simple rules of thumb that enable you to easily say what type of products are in your category. Products in our category meet criteria A, B, C. This should work for current products. It should work for future products. Does it meet A, B, C? Yep. It’s in the category. No. It sits somewhere else.
Categories evolve. But they have to evolve around some defining characteristics.
What is your wider competitive set? This is where you go broader. If you’re a snack it could be all snacks. If you’re a drink it could be all drinks. If you’re a meal ingredient it could be all meal ingredients.
We’re now seeing new battle lines drawn up. For instance, alcohol brands used to be competing against other alcohol brands. Soft drink brands were competing with other soft drink brands. Now premium soft drinks are directly competing with low or no alcohol options.
This is an opportunity. You can eat their lunch. It’s also a threat. They can eat yours.
What is your potential for growth? Think about where you are now. Then think about where you could be. What are your core occasions – e.g. for cereal it’s breakfast. What are your extended occasions – e.g. for cereal this could be snacking.
Then use this to open up growth potential. For instance, tea and coffee used to be about hot drinks. But most drink occasions are cold. Hence coffee moving (and tea trying to move…) into cold occasions.
It’s no good winning the (e.g. hot drinks…) battle but losing the (e.g. total drinks…) war.
The FMCG landscape is changing quickly. Meaning the competitive set is changing.
The threat is bigger than ever before. So is the opportunity.
Are you going to be handing out the divorce papers or receiving them?
Feel free to forward. Have a great weekend. Speak to you in a fortnight.