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Food & Beverage Brands Responding to the New Normal

CPG brands look for new ‘entry points’ in smaller sizes, affordable indulgences

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Cervecería 100montaditos restaurant chain features “small plates” and Montaditos sandwiches

Cervecería 100montaditos dubbed “a Spanish Starbucks for sandwiches” by Bloomberg Business Week, is a restaurant chain featuring a menu composed of “small plates”

Cervecería 100montaditos

I interviewed Ann Mack, Director of Trendspotting at JWT on some insights from their JWT's 100 Things to Watch in 2012. I wanted to go behind the scenes of their 10 Trends for 2012 Food Forecasts and in particular food trends for 2012.

JWT is the world's best-known marketing communications brand. Headquartered in New York. JWT's client roster includes major CPG and brands such as Bayer, Cadbury, Diageo, Kellogg's, Kimberly-Clark, Kraft and Nestlé.

The Small Bites Phenomenon

Cervecería 100montaditos dubbed "a Spanish Starbucks for sandwiches" by Bloomberg Business Week, is a restaurant chain featuring a menu composed of "small plates" which is similar to Tapas but in a fast food (QSR) format. For example their Montaditos are their "mini" small bites sandwiches based on their secret Spanish bread recipe and are priced from $1 to $2. This upscale fast food chain is relatively inexpensive, aligned with the small bite phenomena and appeals to time starved, budget minded consumers. They opened in Miami in 2011 and are planning more units in the USA in 2012.

I asked Ann... besides Starbucks Petites, who else in the Fast Food industry is focusing on new product launches based on the small bite phenomena? "I am not seeing it yet so there is a great deal of white-space in the QSR sector and a real opportunity for new product development that appeals to indulgence without the guilt." Starbucks Petites also represent the trend of Perpetual Snacking over 7 - 10 daily meal occasions.

Ann sees consumers navigating the "new normal" so I asked her to give me her observations from their research. "People are trading down, cutting back and clipping coupons. Food & Beverage brands are opening up more entry points for extremely cost sensitive consumers. These 'entry points' can be stripped down services, smaller sizes and affordable indulgences. A consumer might not indulge in the larger version of something...since the perception may be it is overly indulgent and the real issue of watching the budget".

Food Fairs - Urban Food Trends and Farmers Markets
Ann said that "This is a confluence of trends... the consumer's affinity for local, farmers markets, foodie-ism, green markets, mobile vendors (food trucks), bite sized, and small tastings... all laddering up to these food fairs. People embrace this since they can try things out without having to commit to the full dish... it really is the best of both worlds."

A driver that may not be apparent here is Generation Y (Millenials). Joy Blakeslee of Publicis recently told me in an interview on their Top 12 Food Trends 2012 Insights report . " Millenials are short on cash and employment and like to explore world food trends… which are affordable. Gen Y can't afford to travel but food is a way to travel vicariously through food." Food Fairs are but one way Millenials can "travel the world" through these unique eating experiences.

Since there are so many drivers to the Food Fair trend, how do CPG brands deal with this complexity? Ann said "With this local issue, CPG brands can play out their roots or potentially their local manufacturing plants where they operate. Today big is synonymous with bad and consumers are embracing small. For major brands, rather than playing up their bigness, they are repositioning their brands with local angles such as using the local farmers."

Chipotle Mexican Grill, in an effort to provide healthy fast food options is working on doubling the amount of local produce they buy.

"All of this is the larger trends of the rise of shared value. Corporations are re-thinking logistics, transportation and manufacturing. Shipping across the country is not the best way to run things..." according to Ann. Socially responsible management is striving for what is called 'the triple bottom line' which means balancing what people need, stewardship of our planet and corporate profits.

The most disruptive trends revealed are smaller sku's, screened dining, which is the connected, virtual table coming from our frequent use of tablets and smartphones. Ann adds insight to how Food & Beverage Brands are responding to the 'New Normal'.

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