The power of purpose for FMCG
As a Marketing Communications Manager, I have worked in FMCG communications for several years. In early 2000, the trend was to focus was on “the single-minded proposition”. Drummed into my head was, what is the one thing that is going to get the average supermarket shopper to buy this product. For NIVEA = Care, Riva Coffee = The taste of Brazil; Weet Bix = Breakfast of Champions. Still to this day I stroll down shopping aisles and look at packaging and wonder what drove the brand manager to focus on that product feature.
Having long left the realms of advertising, and spent the next 10 years as a partnership manager for an NGO, it was clear FMCG’s were using cause related marketing to differentiate in the supermarket aisles. At first, I was excited and saw the great potential for me to pitch ideas like “buy this product and you’ll support thousands of children to access clean water.” And, it did work. Sales went up, FMCG brand managers were happy, and NGO’s were raising bucket loads.
The problem was that cause related marketing rarely lifts baseline sales and create loyalty, and fickle consumers tend to flick to the next shiny thing at the drop of a hat. Therefore, it would always be used purely for campaigns and unlikely to last long-term, unless the whole premise of your brand is based on a cause like Thank You.
The next generation of FMCG communications seems to be coming into the forefront, and sustainability is the focus, for example Unilever, Mondelēz, Johnson & Johnson and Thai Union Group of Thailand (who own John West). This also means, the way business is operating is changing and the power of purpose is winning the communications game.
Currently, at Business for Development we are developing an inclusive business for a multinational FMCG brand where over 100 widowed women farmers will double their income via improving yields. While we explain the vast number of activities on the ground and the impact it will have, it’s clear that this company is interested in the outcomes, but their marketing team were more excited about the brand story that could be told – women’s economic empowerment. For the marketing team, this was a way to engage consumers who are becoming more cynical and are increasingly buying into brands that stand for more than just product features and benefits. Having the ability to clearly communicate a company’s social good efforts in the value chain is more important than ever.
As inclusive business practitioners, when talking to an FMCG company, not only tout the impact for the community on the ground, the cost savings in supply chain etc., but also highlight what their consumers are thinking about sustainability and think how, by supporting this inclusive business strategy, the business is going to differentiate themselves. From there you have hit a marketer’s sweet spot.
The power of purpose is becoming a key driver in the decision making process for consumers. On pack, in advertising, on websites – marketers, especially in the FMCG space where decisions are made quickly, are looking to demonstrate that somehow as a purchaser you are making the world a better place by buying this as opposed to brand B. In the coming years we will see more communications on being:
- Using sustainable raw material production e.g. empowering farmers
- GMO free
- Packaging reduction
- Carbon footprint & water footprint
- Ecosystem quality
- Natural resources
- Human health etc.…
FMCG brands are clamouring to differentiate themselves and sustainability is the golden child. The thing with sustainability is, it is not easy to do because you must change your total value chain, so brands that make the change early in the market have a stronger first mover advantage on the supermarket shelves.
According to a Nielsen Report (2016), almost 75 percent of millennial respondents are willing to pay more for ‘sustainable offerings’. What’s more, brand trust and commitment to social value and community are becoming the biggest purchase influencers. Therefore, in the world of brand marketing offering a combination of hitting the nail on the head with sustainability, while producing a product that meets consumer market needs, a FMCG brand is creating a level of loyalty and willingness to pay premium prices. Research also indicates that 84 percent of consumers would actually switch their normal brand for one associated with sustainability (EY, 2016).
Sustainability, and communicating strategy and impact, will increasingly be an important aspect for not only FMCG brands, but all brands. Next time you are wandering down a supermarket aisle, start to take a look and notice the shift towards sustainability. It just might also give you some insight on how to engage these organisations with your next inclusive business concept.
Source of cartoon: https://marketoonist.com/2012/07/single-minded-proposition.html
This blog is a part of the March 2017 series on how businesses in the FMCG sector are including the BoP in their value chain. Read more here.