Funny, I was looking through the kitchen cupboards today and realized that, except for some razor blades, I haven’t bought any mainstream consumer packaged goods for a long time. I’m sure I can’t be alone. Even though profits remain healthy at the big CPG companies, it’s developing markets that are primarily driving growth.
Actually, there were a couple of bars of Green and Black’s organic chocolate, which is owned by Cadbury Schweppes, but they’ve been smart enough to keep that connection completely off the packaging so that people like me continue to buy it. You see it’s not that there aren’t brand-conscious goods in my cupboards; if anything they reveal that I’m a sucker for aesthetically pleasing packaging. I’m also not self-consciously searching for “authenticity”, although that ends up being part of it, particularly when it comes to food. Instead it’s that I’ve simply become disillusioned with big brands. Partly it’s a set of non-specific concerns about the ethics of their production, but mostly it’s that I’m weary of being marketed to, and the more that’s spent on telling me I ought to buy something, the more inclined I am to believe all the effort was invested in marketing the product rather than making it great.
Vancouver, partly because it’s a degree or two removed from the global centres of finance and commerce, has long been home to very genuine innovation, and product design that’s driven by passion and function first, branding and marketing second. When Adidas Salomon (Salomon has since been sold to Finland’s Amer Sports) purchased outdoor gear maker, Arc-teryx, back in 2002, they did so because the brand was built around a truly genuine affinity with its customers. It’s not that Arc-teryx’s customers weren’t concerned with design and aesthetics, rather that these qualities were (and still are — the products remain great) wrapped up in the substance of the product, not tacked on after the fact. And since then there have been quite likely hundreds if not thousands of mergers and acquisitions in which high quality niche brands have been snapped up by more mainstream giants.
The giant brands may in the end be quite safe because they’ve got relatively untapped markets in the developing world and a limitless supply of passionate people there and here creating new, authentic brands that can be acquired once the hard work of building a community of passionate customers has been done. But it’s interesting to think about the structural changes that will surely accompany this shift. It strikes me that it’s not just media that are fragmenting across more specialized channels, and in turn stimulating less generic and more targeted forms of advertising. In turn the next generation of brands are building highly profitable businesses which may only amount to $50MM or so in annual sales but nevertheless appeal to an influential and desirable audience. It’s likely that a good part of marketing’s role will become preserving the independence of these brands.
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