The natural channel, innovation that focuses on real consumers

New healthy focused product innovation is the fuel that’s growing natural product sales. The natural channel is the R&D of the entire healthy better-for-you industry.  This is because natural brands and retailers have a close personal relationship with their core shoppers.

Thousands of new products are launched every year with most of them failing.  I’ve seen numbers as high as a 90% failure rate.  This is primarily because most innovation is not focused on meeting the needs of the end shopper – the real needs of the end shopper.  Let me explain.  Some brands use focus groups where a few select people are frequently paid to offer their opinion of a product.  This is not a good model because no two customers are alike.  

Natural brands are closer to the shoppers that buy and use their products.  This is the key. They have a personal relationship with real shoppers.  Their products are designed to meet those shopper’s specific needs and wants.  This produces a scalable model for success.  This is because the original core group of shoppers is driving the key trends you eventually see on mainstream retailers shelves.  

Consider this.  Similar to a small ripple on a pond, innovations in the natural channel make their initial splash with committed shoppers looking for solutions to their specific challenges like allergy free, gluten free, etc.  Those ripples grow and pick up frequency as more and more natural retailers put the products on their shelves.  By the time they end up on mainstream retailers shelves, the ripple is practically a tsunami.  Remember gluten free when it was a new trend in natural?  Look where it is today.  Most everyone has heard about it. 

Marketers don’t define innovation, consumers do. The shopper is always king!  I cannot say this enough. It never ceases to amaze me how so many brands and retailers continue to overlook this simple truth. Companies that focus on the consumer’s needs first, second, and last will always win in any economy and in any channel.  This is perhaps the greatest strength of natural product brands and retailers. Their relatively small size and their ability to remain closely connected to their core customers give them a substantial and sustainable competitive advantage. In contrast, their larger mainstream counterparts are typically very siloed and disconnected from the end consumer.

Another key difference in natural is that innovation includes an element of authenticity. True innovation does not include slapping a new label or product claim on a box or adding a different flavor to an item. This practice usually leads to consumer confusion and frustration. How many times have you gone to a mainstream store to purchase your favorite item only to find that it has been replaced with the new “flavor of the month”?  This causes shoppers to lose faith in the brand.  Shoppers don’t want to be sold.  They want to purchase what they want. 

Some mainstream brands spend so much time trying to “buy shelf space” through “new” product innovation that they lose sight of their core customer’s wants and needs. Imagine the effort required, not to mention the expense, of gaining distribution in every store across the country for each new item. Now compare that to the “grass roots” marketing, product R&D, and sales that are the backbone of the natural channel. Having real committed core shoppers tell you what they want and need in a product compared to a panel of paid random strangers – priceless.

Shoppers are happy to pay a premium for products that meet their needs and wants. The natural industry’s growth is proof that consumers will pay a premium for quality products that meet shopper’s needs.

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By |2018-07-31T22:03:47+00:00July 30th, 2018|Brand Engagement|

About the Author:

Daniel Lohman, CPSA is Strategic Advisor in the CPG and Organic Industry. His company, Category Management Solutions (CMS4CPG LLC), provides innovative ideas, actionable insights and strategic solutions for companies interested in gaining a significant competitive advantage. He assists companies in expanding their retail distribution and improving their merchandising. His extensive knowledge and expertise reaches far beyond traditional category management and has earned him recognition throughout the industry as an expert, speaker, trainer and thought leader. Daniel can be reached at Connect with me on LinkedIn.

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