How we buy is changing what we buy

One of the of the most overused—yet true—phrases in football was coined by Hall of Fame coach Bill Parcells.

A curmudgeon of the nth degree, Parcells is credited for quipping that “the best ability is availability.”

It’s a phrase that applies to plenty of areas outside football, including CPG. And we’ve all been thinking about availability of late.

Since the first essential goods rush in March 2020, we’ve dealt with availability challenges throughout the ecosystem:

  • Inventory

  • Advertising

  • Production

  • Shipping

The list goes on.

For CPG, physical availability (the type that Parcells harped on) is as important as mental availability (a brand’s ability to be in a consumer’s consideration set when they’re ready to make a purchase)—and both of them are governed, in part, by accessibility.

There are many ways to solve this puzzle.

Of late, one of the solutions that optimized for availability has been the rise of on-demand delivery: GoPuff, FastAF, the new Kroger-Instacart partnership.

This week, a Financial Times column questioned the cost this level of convenience has, and two strong voices—Michael Miraflor and Web Smith—used the piece to point to the bifurcation of classes in our economy.

As the three (physical availability, mental availability and accessibility) are often intertwined, these are worthwhile reads that consider the whole socio-economic picture. Perhaps closer to home for our newsletter is the implications of that.

As we’ve previously discussed, price points, too, are bifurcating.

While pricing has arguable been an optimization lever for accessibility, it may be worth questioning whether it now has a greater influence on availability.

Who you aim to sell to—and in which category you aim to position—will greatly influence these decisions.

From Morning O’s:

In its 2020 CPG Growth Leaders report released earlier this month, IRI noted that while CPG growth accelerated to 10% YoY in 2020, there’s a strong bifurcation at play: “Large CPG innovation and hyper-targeted small CPGs” are increasing premiums at the top-end of the market, while more value brands and private labels are capturing more of the rest of the market.

On its face, this appears to be a win for DTC brands as more develop retail strategies. But in a highly competitive market (like breakfast cereal, for example) there’s also a dangerous dynamic at play: If the market is truly bifurcating, brands following the traditional DTC playbook risk getting stuck in the middle.

In that newsletter, we also wrote that many brands who have started DTC have attempted to blur the lines between value and high end. Based on the IRI insight, it sounds like that approach may end up being an uphill battle—and not just in terms of accessibility.

The natural extension of this is that, as more of our economy ends up on one side of the “algorithm” or the other, retail, too, will optimize for this. A place in the middle won’t exist as much, and that means less availability for those brands who aim to live there.