Opinion: Grocers face new threat as FMCG brands strike out from shelf-lives

‘Berry au Lait’, ‘The Chai Line’, ‘Berry me in Green Tea’ – a few menu items from the newly-opened Kellogg’s NYC, a venue that’s already making waves for an unusual combination of flavours and ingredients.

Unlike some of its Broadway neighbours, however, it’s no cocktail bar or fusion restaurant.

Instead, its menu showcases the finest dishes that Kellogg’s breakfast cereals have to offer. Everything from Special K to Froot Loops are paired with fresh and quirky ingredients or turned into sundaes, for which diners spend around $10 a meal.

The café has already garnered a significant following and some upbeat reviews, even if it’s not boosting the brand’s quarterly profit just yet.

Earlier this year, PepsiCo also announced their aspirations to look beyond traditional product distribution channels, and revealed plans for a ‘hospitality venture’ in New York’s Meatpacking District.

London calling

Closer to home, anybody who wanders through central London this summer can treat themselves to some ice-cold indulgence at Magnum’s Pleasure Store.

These examples indicate a trend among FMCG brands in particular. Not content with just being a box on a shelf, we’re seeing brands taking to retail on their own terms and embracing the experience economy, moving away from providing goods and services to hosting memorable events.

In the UK, supermarket shopping is not an experience that many can claim to love.

Sure enough, the steady increase in ecommerce grocery sales underscores the fact that people are less inclined to visit these stores than ever before, seeking more convenience in online shopping when the bricks-and-mortar experience lacks engagement and participation.

Staging richer brand experiences could arguably be more difficult for supermarket chains than individual brands.

However, we can’t afford to let a trend of bland retail continue – responding to and embracing the forces of change that are impacting consumer behaviours will be crucial to slow down and ultimately move away from the culture of discount tactics.

So what’s the answer? By looking at some of these early forays, we can get an insight into the experiences that shoppers are really looking for, and how the leading brands are trying to meet them.

Make it playful, but relevant

Magnum saw an opportunity for customers to engage more meaningfully with their brand through play.

Personalisation and experimentation sit at the heart of its Pleasure Store, resulting in customers sharing countless snaps of chocolate-laden creations and coming back for more.

It’s an experience that supports and gives meaning to its ‘indulgence’ brand positioning.

Widen the ecosystem

Kellogg’s NYC gets away with those $10 cereal servings by adding something special to it.

Fancy toppings or sundaes aside, the brand has created an experience that we haven’t seen before, yet still aligns with the Kellogg’s we know.

For instance, Kellogg’s NYC has upgraded the beloved cereal box toy to new prizes when you pick up your bowl – from concert tickets to Uber gift cards.

Springboard to strong storytelling

PepsiCo’s hospitality play has been dubbed Kola House – not a nineties-style misspelling, but a reference to the theme of the venue: an homage to the humble Kola nut.

Pepsi is using a core part of its product to drive a bigger narrative – one of originality, authenticity and craft – which would simply not come across on a supermarket shelf.

This final point is the most crucial one. Ultimately, brands are looking to stand out from their cluttered marketplaces, and have landed on bricks and mortar as the perfect medium to do so.

Resonant physical experiences are not just a nice to have, they tie directly to performance metrics – both positive and negative.

Retailers with the strongest experience ratings will be those who excel when it comes to unaided brand awareness, creating emotional connections with customers and building overall loyalty.

• Dominique Bonnafoux is a senior strategist at retail and brand consultancy Fitch