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Recipe to Retail Part 2: Cracking the Competition

April 4, 2017

by Birgit Blain, Birgit Blain and Associates

Thousands of packaged food products are launched annually in Canada. The success rate is remarkably low. According to Nielsen, a global consumer research firm, over 85% of new products survive less than a year. That includes national brands with immense market research, R&D and advertising budgets.

There is a lot more to launching a product than developing a recipe, packaging it and slapping on a label. To succeed in the crowded marketplace it is necessary to do thorough research, analysis and planning.

Identifying competitors

Understanding the competition is crucial to a brand’s success. To define the competitive field, much can be learned from visiting a grocery store. Competitors may be lurking in multiple categories. Applying a bird’s-eye view by walking the entire store can uncover unexpected products that satisfy the same consumer needs, thus exposing potential threats as well as opportunities.

Substitutability

A different perspective, “substitutability” factors in the consumer mindset. When faced with an endless array of options to feed their needs, it is easy for consumers to substitute products by switching to a different category. Looking at cereals for instance, growth has been cannibalized by multiple breakfast solutions. Consumers are migrating away from ready-to-eat cereal by substituting foods like yogurt, eggs and breakfast sandwiches.

Think outside the grocery store

Places to buy food are multiplying, from drug stores to gas stations and even Canadian Tire. Competitors lie in wait in any retail channel that satisfies the same eating occasions. In addition, food service establishments should not be overlooked, since they attract and feed the same consumers. To illustrate this point, when consumers are craving a snack, where can they buy it and what choices do they have? The possibilities and competitors are endless.

Dissecting the competition

Once potential competitors have been identified, a competitive analysis should be conducted to determine points of parity (similarity) and points of difference. This includes a deep dive into the four P’s of marketing – product, price, place and promotion.

Benchmarking, by conducting blind tastings comparing a product to primary competitors, measures product performance according to specified standards. The leading brands in the category should always be included. A good-better-best rating system is an effective way to categorize the results. Outcomes may indicate a need for modifications to meet performance standards and strengthen the point of difference.

It is advisable to engage the services of an independent packaged foods specialist to lead these exercises and analyze the data. An unbiased expert with a fresh perspective can provide guidance, valuable insights and more meaningful results.

Analyzing the competition is not a one-time task. It is important to remember that competitors are moving targets requiring constant vigilance. 

In summary, applying a bird’s-eye perspective to identify competitors, followed by in-depth analysis, provides insights to effectively position your brand in a highly competitive market.


© Birgit Blain

This article was published in Food in Canada magazine.

As a packaged foods consultant, Birgit Blain helps brands that struggle to get listings. Her experience includes 17 years with Loblaw and President’s Choice®. Contact her at [email protected] and subscribe to her Food Biz Blog for valuable advice http://bbandassoc.com/blog/