Find opportunities in market segments in 2022
With access to so much information, consumers are always looking for more. They want to know more about products and understand how the product will meet their particular needs. We see so many different market segments. Some overlap and others can apply one week and not the next. A review of your category can present opportunities for your products if they appeal to specific segments of the market.
Between now and the end of 2021, we will share 10 SKUFood insights to help you make the most of 2022. We try to help you see the entire value chain and prepare your business to respond to changing customers and consumers. Each week we will share a different theme and some ideas and opportunities for you to consider.
Market segments are not always one way or the other
Some market segments are defined such as consumers who can only consume gluten free or lactose free products. Often this is a health issue, and they will be looking for these products specifically. Other segments are not as cut and dry. We see large sections devoted to plant-based protein, but we know the size of the 100% vegetarian or vegan market is not that big. Consumers buying these products might be looking to reduce their consumption of animal protein 1-2 days per week. They are not vegetarians, but they are shopping these sections. In our house our two daughters influence the choice of meals and the nights they pick the meal we often will be looking for plant-based protein.
The product itself is not the only consideration in the market segment you are selling to. We see more upcycled products in the market recently. These are items produced from other products that did not sell in their first chance. An example would be protein powder from Outcast Foods. Consumers are buying this because of how it is made, not specifically how they want to use it.
Market segments present opportunities
When you visit stores review the category and look for gaps in the offering. Are there products in the mix that appeal to all of the different market segments? If not, these could be opportunities for your business. As you explore items remember they still need to accomplish all of the pre-requisites:
- Sell off the shelf
- Deliver value
- Perform (Taste/effectiveness)
- Investment in trade and marketing spend
Just because you are gluten free does not mean they have to put you on the shelf. When you do look at the categories and they already have 1 gluten free or lactose free option they probably will not be looking for two.
As you research opportunities it is important to do your best estimate of the size of the market segment. This is an area where you might educate your customer and increase your chances of getting on the shelf. They might not appreciate the opportunity. You also might be surprised how small the segment is and determine it is not worth the effort.
Turn features into benefits into stories
As you offer products that appeal to different market segments the benefits and stories will be most effective to sell your great products. Often we see consumer packaged goods companies focused on features. Examples of features are:
b) Healthy ingredients
c) Plant based
d) Sustainable packaging
When you can help consumers and customers understand the benefits you have a much better chance of creating a relationship and selling your products. Examples of benefits are:
a) Locally produced can be fresher or unique taste.
b) You will feel better when you consume this product. You always need to make sure you can say what you want to say, given restrictions from regulators such as Health Canada.
c) Plant based products can be easier to digest and reduce the risk of heart disease.
d) With this new package XX tonnes of plastic will not be going to the landfill.
Once you determine the benefits you can tell your story and incorporate the benefits.
Make sure your packaging tells the story
It is a very crowded marketplace. Make sure your packaging tells the story! Be clear and use language the market segment will understand. Use colours that will differentiate you on the shelf and appeal to the segment of the market you are trying to reach. We see more certifications and third-party approval on packaging. Consumers respond to this and really do expect to see it.
The market appears to be more segmented than ever. It is tough to find products that have broad appeal. Consumers have access to so much information about products online and at the shelf. The two worlds collide when there is a QR code and consumers can access the online world right at the shelf.
If you have any questions or require help to figure out the market segments, you can always send me an email firstname.lastname@example.org or call me at (902) 489-2900.
As we approach a new calendar year, we will continue to share insights to help you position your business for increased success in 2022.
“Retailers need to find products that appeal to a rapidly changing market."
If you see things happening let us know so we can share them with our community. We also want to hear if you find this helpful and benefits your food and beverage business!
Prior to the pandemic my two daughters and I would go to the store and fill a shopping cart for our food bank here in N.S. Two weeks ago we were planning to do this prior to Christmas. Unfortunately, the situation here has changed for the worse so we decided it was better to stay home. We will make a donation to Feed N.S. from SKUFood on behalf of all of the people we have worked with in 2021.
We are fortunate to work in the food industry. There are so many examples of people in this industry who have gone above and beyond, especially in the last two years, to bring food to stores and consumers. It is a privilege to work with people every week who work so hard to produce and process food. We hope that what we do at SKUFood helps and allows them to be more successful.
From our family to yours we wish you all the best for the holidays and Happy New Year!