Morning O’s
Morning O’s, Revisited
Three years ago, we wrote in this space about a TikTok that flipped through the front labels of 71 different “morning O’s” boxes.
In it, we suggested:
You might argue a TikTok showing 71 boxes of cereal is proof that the market is large enough to support yet another box that contains Better Value Os. Maybe.
It seems more likely, though, that the next wave of upstart CPG brands will follow less of the Bonobos/Warby Parker playbook—where value is the main driver—and more of the Parade/Topicals/OffLimits playbook—where being straight-up different, be it category, product, or brand, is the main driver.
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.
A slightly-better-for-you version of something at not-quite-a-premium price is how the traditional DTC brand could be described. You could also describe this as attempting to blur the lines between value and high end. And based on the IRI insight, it sounds like that approach may end up being an uphill battle.
Yesterday, we were reminded of this TikTok (and previous post), as Haven’s Kitchen founder Alison Cayne posted about a new Mintel report:
A few notable points:
Food and drink are an accessible and permissible avenue toward enjoying daily life in times of what feels like perpetual stress.
Affordable luxury purchases can have a positive psychological impact during stressful times – they can make you feel…better.
brands have opportunities to elevate at-home experiences…and innovate for affordable, meaningful solutions (that) maintain a sense of joy around consumption.
Simple approaches to both health and indulgence resonate most.
76% of US consumers agree that meat has gotten too expensive…That being said, premium food and drink products will still prove cheaper than other indulgences.
Positioning, as we’ve written recently, feels more important now than it has of late. Cayne’s post highlights this.