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Food & Beverage

Selling optimism and accessibility will drive growth
By Bill Chidley

As political and financial chaos seemingly become the status quo, leading food and beverage brands will seek growth and differentiation through the coming year by projecting a sense of optimism and purpose in mature markets while simultaneously focusing on gaining distribution in fast developing markets.

Optimism must be coupled with a sense of purpose
The notion of optimism in brand building is certainly not new. Take, for example, the slogan used by the UK’s Orange telecommunications to capture share in the 90s: “The future’s bright, the future’s Orange”. Today, pure optimism is not enough. This upbeat stance must include consumers in the dialog and ultimately allow them to participate in something fulfilling. Food and beverage brand marketers are betting that a sense of purpose will drive strong connections with existing loyalists and new users through social media and other earned media strategies. The creation of sharable content that ties back to a brand’s equity and assets – while demonstrating social responsibility – is a powerful and efficient way of building and managing a brand.

Perhaps the best example of this optimistic sense of purpose is the current Arctic Home campaign from Coca-Cola. The concept builds awareness around the loss of polar bear habitat through limited-time packaging design and in-store displays. These items drive consumers online to learn how to get involved and make a difference. Sharable digital content allows people to scale the story through Facebook and Twitter to build a movement. The cause is noble, relevant, and provides a plausible way to intervene on behalf of the endangered bears, all while linking to Coke’s historical association with polar bears as a seasonal brand campaign. The polar bear began as a way for the brand to entertain us, but now serves as both a visual asset of the Coca-Cola product, as well as an icon for the brand’s social responsibility efforts.

Fast developing markets will drive growth
While building social currency and starting movements are effective ways to address the business challenges of developed markets, the biggest growth for global food and beverage brands will continue to come from fast developing markets. PepsiCo’s CEO has stated that these markets will account for at least half of PepsiCo’s sales in the next five years. To that end, Pepsi is reinventing its bottling alliances in China to gain more distribution. Coke plans to invest $2 billion in India alone to expand its presence. Yum! Brands (the parent company of KFC, Pizza Hut, and Taco Bell, among others), is also seeing the majority of growth outside developed markets, having recently signed a deal with China’s Sinopec to open units in potentially thousands of gas stations. Yum! is also acquiring and inventing new restaurant concepts, specifically to meet the opportunities in China.

Innovative brand extensions create new opportunities
Sales for restaurant brands in mature markets should be propped up by lower fuel prices, which will free up more disposable income for dining out. The rising cost of commodities and consumer pressure for “value” pricing, however, will erode profit. As average transactions get lower, McDonald’s, Starbucks, and other major chains will continue to innovate by developing new reasons to visit. The successful rollout of McCafé gives McDonald’s the platform to deliver new beverage-driven occasions, but also creates the challenge of innovating appealing seasonal beverages and seasonally themed packaging to maintain momentum. Starbucks, having dropped “coffee” from its identity, will look to offer premium fruit beverages and more food choices to their loyalists in order to remain the category leader.

Lastly, this is an Olympic year and the London Games should prove to be a new high-water mark for integrated marketing and brand building. McDonald’s and Coke, both perennial World Olympic partners, can be expected to bring their brands to life in innovative, entertaining, and sharable ways to the world audience. A year from now, we should all be referencing these Olympic games as the year that finally brought the integration of global brand building and local brand activation, linked to incredible social media strategy.