Simple, Real, Ingredients Isn’t Enough in the 2020s

I continue to meet founders who position their new food or beverage as something with real, simple, natural ingredients. As if that’s enough…

It’s 2021, folks.

If you don’t see the issue here, you are overdue to learn the Law of N+1, which I write about in my book. 

Let me share an example with some details switched to preserve the founder’s privacy.

I just got a lovely email from a fan who confessed the following: “We wanted to make something so clean and perfect.” This isn’t a bad motive; it’s just not going to lead you to a competitive strategy for exponential growth…in the 2020s.

What was more painful in his email was that he and his partner had invested time and money in their natural-only snack without doing their homework on competition in their home market. And they had failed to notice a 15-year-old $500M brand that had done the same thing, now owned by Campbell’s. Whoops. That’s way too late to build a Skate Ramp brand. 

With a natural-only innovation in your category, you may carve out some market share and get to $10-20M if the product is a sensory delight, but you need more to scale in this market. Most value-added CPG categories have a natural or organic brand already (like the founder above). Most ingredients have organic options. You need killer attributes to drive the kind of excitement and memorability that builds Skate Ramp brands. And ‘simple, real ingredients’ connects only to Purity, a consumer outcome that is only a powerful driver among a tiny subset of educated elites (and the severely allergic). The rest of us need something more compelling to pick you out of a crowd.

Purity is generally the cost of entry to the premium brand marketplace. Early consumers will expect this as a baseline, almost as a class imperative. But what’s driving their willingness to pay a premium AND become a heavy consumer is your modernization of a significant outcome they already care about. They want the new, cool way to do X. And they’ll pay for it. 

Remember, most CPG innovations today already eschew synthetic ingredients, except for some legacy downmarket brands that have never had many educated consumers at all. De-processing just isn’t that distinctive at all, even at Walmart. 

To sum it up: brands that start with ‘real, simple’ Purity-based strategies need to discover something more powerful or iterate their product mix to deliver an attribute-outcome signal with more oomph. 

Innovate bolder. Think smarter about growth. 

Dr. James Richardson

[email protected]