Going it alone – successfully – in today’s increasingly competitive landscape and challenging economy is not a viable option for many CPG companies, large or small, which is why so many businesses are embracing collaboration.
Post-pandemic, partnerships are on the rise and range from classic strategic-startup combos (such as Mondelez’s SnackFuture Venture’s investment in Cellest Bio) to academia teaming with trade groups (like The Good Food Institute’s previous participation in the Smart Protein project or the Bezos Centre for sustainable Protein) to unexpected cross-industry interactions (think Liquid Death and the cosmetics brand e.l.f.) and cross-category collaborations (like Kellanova’s Pringles and Miller Lite Beer).
But teamwork doesn’t always make the dream work – sometimes it can be a nightmare. If expectations are not clearly defined, partners can feel as if they are putting in more than they are getting out or questions can crop up about who owns collaborative concepts and products once an arrangement ends.
Who benefits?
To ensure collaborations are mutually beneficial, potential partners should first consider “who is benefiting who,” advises Cale Nelson, the chief operating officer at Local Hive, a company committed to bottling honey straight from the source for more than 100 years.
“Collaborations can be structured in different ways depending on your goals. Is it more for a brand awareness play? Is it more for actually making money? Is the other player just buying your ingredient and using their brand? Or are you creating something new together?” he said.
Depending on the answer, companies might arrange for a percentage of sales or royalties or they might want to ensure clear co-branding, he said.
For example, two years ago Local Hive teamed with Denver Beer Co to create a traditional wheat beer with a touch of sweetness from Local Hive’s local Colorado honey. In promotions for the beer, cheekily named Backyard Buzz Honey Wheat, Denver Beer Co called out Local Hive as the source of sweetness. Denver Beer Co also gave away packets of wildflower seeds to customers who purchased a six pack of the beer at its taprooms – a promo that highlighted Local Hive’s dedication to pollinator awareness and protection and support for beekeepers nationwide.
How does a partnership expand a brand’s reach?
Nelson also advises companies to consider how collaborations can expand a product’s visibility by extending it to new aisles, audiences or usage occasions.
For example, he said, Local Hive has teamed with retailers for off-the-shelf promotions that showcase how its honey goes beyond sweetening tea or as a baking ingredient by featuring it on endcaps focused on grilling or as a key ingredient in cocktails and salad dressings.
Brands can improve their chances of securing special placement in stores without having to pay extra by offering retailers an exclusive for a limited time, added Nelson.
Circana also called out the effectiveness of this strategy in its recently published 13th annual CPG Growth Leaders report, in which it outlined a new framework for building market share and sales in today’s fast-evolving CPG landscape.
Circana Global Executive VP and Chief Advisor Sally Lyons Wyatt explains that offering retailers exclusive collectables, flavors or other benefits that can drive foot traffic can result in new placement and visibility on shelf for products.
Some of the most effective collaborations are also the most unexpected, said Lyons Wyatt in a recent episode of FoodNavigator-USA’s Soup-To-Nuts podcast.
She explained that a collaboration between the edgy beverage brand Liquid Death and the accessible cosmetics brand e.l.f. to offer a limited-edition makeup kit drove almost 14 million views on TikTok and resulted in the product selling out in 45 minutes.
This partnership also was effective because it put each brand in front of a consumer set that it did not already target or count among its fans, she said.
Authenticity is essential
Collaborations with celebrities can generate a quick spike in consumer engagement, but for sustained interest brands should team with an influencer or public figure who has an authentic tie to the product or shared valued with the business, advised better-for-you soda brand Zevia’s CEO Amy Taylor.
Zevia recently ran a campaign with musician Jelly Roll that parodies PepsiCo’s classic television ad featuring Cindy Crawford to deliver a powerful message that real men can “be conscious of what goes into their bodies.” The ad also declares Roll the “poster child of sweet authenticity” – a claim supported by his public weight loss journey and push to encourage others to join his run club.
“We are just having fun – finding our voice and using a lot of humor to invite people into a conversation about what does it mean to be authentic and what does it mean to reject artificiality,” said Taylor.
Much of the ‘modern soda’ space targets women or consumers on the coasts, but by teaming with Jelly Roll Zevia was able to talk to a consumer group and regions of the US often overlooked by marketing for the burgeoning modern soda set.
Learn from industry leaders
Industry leaders across categories will share additional tips for successfully leveraging collaborations at Future Food-Tech’s summit in Chicago in the panel discussion ‘Building Collaborative Success: Partnership Models Driving Breakthroughs in Food.’
Panel moderator Elizabeth Crawford, senior editor for FoodNavigator-USA, will enlist advice from:
- Richie Gray, VP & Global Head of Snackfutures Ventures, Mondelez International,
- Eric Weisser, Head of Open Innovation and Customer Innovation, Ingredion,
- Kara Leong, Executive Director, iCAMP, UC Davis, and
- Marianne O’Shea, Vice President – Global Nutrition Science, PepsiCo.
Talking points will include:
- How can corporates effectively integrate innovations like biotechnology and biomanufacturing into their business to drive product innovation and renovate their portfolios?
- What are some successful examples of partnerships within the food sector, and what learnings can be drawn?
- How do partnering companies navigate elements such as scaling, regulation and IP?
- Which stakeholders are essential to facilitate the continued acceleration of innovation in the food sector?
- What role do academic and research institutions play in fostering innovation through partnerships, and what institutions are leading the way with impactful collaborations?
Learn more about the panel and other engaging sessions and register to attend the event in Chicago June 2-3.