No one doubts that food is fashionable. We see it every day on TV, in magazines, on social networks, and in books and other media. Consumption is rising and it seems that the economy is improving, but who is benefiting from this? Who is noticing and taking advantage of it?
One group that isn't doing so are big consumer brands. According to several studies focused on the US market, big brands are losing market share in 42 of the 54 categories that make up FMCG. In Spain, craft beer is the fastest growing area (7x in 4 years) in a category that has been stagnant for quite a while.
In specific categories in decline such as yogurt, brands like Pastoret are growing at double-digit rates. This company was invoicing over €6.3 million in 2010 and closed 2016 with over €16 million in sales, which is quite an impressive feat. Big brands, on the other hand, are losing the customer loyalty battle. These customers are looking for more authentic, less processed products with real and interesting stories that capture their attention and give their purchase meaning. They look for products with a more complete and purposeful experience.
"Small big brands" do a much better job of taking advantage of trends, largely because they do not suffer from the tyranny of having to fill manufacturing capacity. Their approach is generally fresher, as they are not thinking about how to complete ranges or regain share in a certain market segment. Instead, they believe in their product, pampering and coddling it, regardless of quotas and leadership.
The answer in many cases is to buy these small big brands. It is no coincidence that in the U.S., acquisitions in the FMCG sector reached $235 billion in 2015, almost twice as much as in the digital sector.
A clear case of this is Chobani in the US, a Greek yogurt brand that started with a small factory and now leads the category, challenging large corporations such as Danone or General Mills that have had to reorient their strategy to be able to face this small giant. Large companies are already positioning themselves to acquire the company. Last year, Hamdi Ulukaya, the company's founder, turned down an offer from Pepsico to take a minority stake.
