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I've started 2 consumer brands ( @kettleandfire and @perfectketones) that each have done $100mm+ in sales in less than 5 years.
If you’re starting a consumer brand, here are the 7 key areas to focus (thread):
If you’re starting a consumer brand, here are the 7 key areas to focus (thread):
1/ CHOOSE A TREND
Big CPG is incredible at optimizing the hell out of their existing products. They’ve got supply chain and manufacturing know-how for days.
Where they’re less incredible?
Innovation.
Big CPG is incredible at optimizing the hell out of their existing products. They’ve got supply chain and manufacturing know-how for days.
Where they’re less incredible?
Innovation.
Big CPG is often slower to jump on trends than you are, mr(s) scrappy consumer founder.
And this is where you can win -
identify a small (but fast-growing) trend, and create on-trend products.
And this is where you can win -
identify a small (but fast-growing) trend, and create on-trend products.
This is how both @kettleandfire and @perfectketones got to $10mm+ within 2 years of launch.
2/ START DTC
DTC is a tough channel to scale, but the best channel that’s ever existed to get feedback.
Launch DTC and learn from your customers how they like your:
- Product
- Positioning
- Pricing
- Branding
DTC is a tough channel to scale, but the best channel that’s ever existed to get feedback.
Launch DTC and learn from your customers how they like your:
- Product
- Positioning
- Pricing
- Branding
Use this direct feedback to iterate a whole lot faster than Big CPG.
Listen to your customers, and they’ll help you put the best product out there.
Listen to your customers, and they’ll help you put the best product out there.
3/ FOCUS ON COMMUNITY
Focus on a few small but intense tribes when you start. @kettleandfire focused early on the Paleo crowd, @perfectketones on the keto crowd, Quest on workout junkies.
Focus on a few small but intense tribes when you start. @kettleandfire focused early on the Paleo crowd, @perfectketones on the keto crowd, Quest on workout junkies.
Laser focusing on 1-2 communities will give you a strong base of core customers. You'll NEED this as your brand makes the leap into mass market.
It’s also a competitive advantage. Big CPG *has* to make products that appeal to the masses.
You don't. Leverage that.
It’s also a competitive advantage. Big CPG *has* to make products that appeal to the masses.
You don't. Leverage that.
Make the best damn Paleo protein bar in existence, and figure out how to expand your market later.
4/ PEOPLE BUY FUNCTION
People rarely buy a product because it’s pretty.
They’ll buy a product because it has functional benefits they’re not getting elsewhere.
This could be protein, no harmful ingredients, or something specific (pain relief, energy, de-stress)...
People rarely buy a product because it’s pretty.
They’ll buy a product because it has functional benefits they’re not getting elsewhere.
This could be protein, no harmful ingredients, or something specific (pain relief, energy, de-stress)...
Whatever it is, figure it out + sell that:
Vital Proteins sold the benefits of collagen
Four Sigmatic - mushrooms
Quest bar - protein
RX bar - clean protein
Oatly - vegan milk
Recess - chill in a can
Find the function your customer cares about, and hit on that.
Vital Proteins sold the benefits of collagen
Four Sigmatic - mushrooms
Quest bar - protein
RX bar - clean protein
Oatly - vegan milk
Recess - chill in a can
Find the function your customer cares about, and hit on that.
5/ PREMIUM IS OKAY
Once you’ve found the function you’re selling, charging a premium is totally okay.
We’re moving into a world of abundance. Consumers who care about what you’re doing will *really, really* care.
And they're' willing to pay for the best thing in a category.
Once you’ve found the function you’re selling, charging a premium is totally okay.
We’re moving into a world of abundance. Consumers who care about what you’re doing will *really, really* care.
And they're' willing to pay for the best thing in a category.
I think being the best + charging a premium for it is the right move for a brand just starting out.
As you grow, you can lower prices to reach the mass consumer. But in my experience, it's very hard to start there.
As you grow, you can lower prices to reach the mass consumer. But in my experience, it's very hard to start there.
We did this at @kettleandfire. The first product we sold (in our current sized cartons) was $11.99 online.
Then $9.99 at Whole Foods.
Now, you can buy a carton of @kettleandfire bone broth online or in stores for about $7.
40% less than what we charged when we launched.
Then $9.99 at Whole Foods.
Now, you can buy a carton of @kettleandfire bone broth online or in stores for about $7.
40% less than what we charged when we launched.
(for more on why consumers are willing to pay for the best, read this @Alex_Danco piece on the access economy) https://alexdanco.com/2015/12/17/taylor-swift-ios-and-the-access-economy-why-the-normal-distribution-is-vanishing/comment-page-1/
6/ DISTRIBUTION STRATEGY MATTERS
Your retail strategy really, really matters.
Start small in retailers where you know you can win (where your core customer shops).
Prove you can win in 50 Whole Foods before expanding to 500.
Your retail strategy really, really matters.
Start small in retailers where you know you can win (where your core customer shops).
Prove you can win in 50 Whole Foods before expanding to 500.
This applies to all channels. For @kettleandfire, we first proved the brand could succeed in 50 Whole Foods in 2016.
A year later, we went national with Whole Foods and Sprouts.
A year after that, we went national with Kroger. Then Safeway.
A year later, we went national with Whole Foods and Sprouts.
A year after that, we went national with Kroger. Then Safeway.
Now - 4 years after we began selling in retail - we’re in 10k+ stores.
But we only got there because we showed we could win in 50 stores to start.
But we only got there because we showed we could win in 50 stores to start.
7/ MAKE IT BETTER
The last (and hardest) piece of all this?
The product has to be materially, 10x better.
Not like “oh this is slightly better than what I used to buy”.
Like really, noticeably, tell-your-friends better.
Only then do you have a shot at crazy growth.
The last (and hardest) piece of all this?
The product has to be materially, 10x better.
Not like “oh this is slightly better than what I used to buy”.
Like really, noticeably, tell-your-friends better.
Only then do you have a shot at crazy growth.
This was @perfectketones. Our 1st product was $59 for (vs $79 for the competition).
It tasted better, was more effective, had better branding AND cost less.
We did $3mm+ in sales in year 1, on just that product.
It tasted better, was more effective, had better branding AND cost less.
We did $3mm+ in sales in year 1, on just that product.
8/ FINALLY
Between 2011 and 2015, $18 billion in market share shifted away from large CPG to smaller brands.
In 2015, 90 percent of the top 100 CPG brands lost market share, with 62 of them experiencing declining sales.
Between 2011 and 2015, $18 billion in market share shifted away from large CPG to smaller brands.
In 2015, 90 percent of the top 100 CPG brands lost market share, with 62 of them experiencing declining sales.
I suspect it will be a great decade for new consumer brands.
The Golden Age of consumer is only beginning.
The Golden Age of consumer is only beginning.
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