'The new normal' for FMCG A-brands
23 april 2020 
in News

'The new normal' for FMCG A-brands

We hear it every day in the media and around us. 'The new normal'. Every specialist can tell us very well what this will look like, but I think it depends on one thing. A good vaccine.

A good vaccine for A brands would also not be unwise. Because A-brands have a hard time during recessions. The turnover of the Top 20 innovations from 2001 to the present has decreased by approximately 50%.

"Innovation power of Top-20 introductions has decreased by approx. 50% from 2001 to present"

Source: 2019 IRI shopper survey

But things aren't going bad for A-brands, are they? No definitely not. However, they have been getting more and more revenue from promo in recent years.

The new normal (whatever that will be) will put A-brands more on the rack. After all, we are going to end up in a recession and that is by definition not good for A brands, because the declining consumer confidence ensures that consumers keep their purse strings tight. In addition, downtrading takes place in many categories. Regular prices will come under pressure and if we continue to use the same promotional strategy as A brands, a cocktail for A brands will arise, which will have major consequences for LT growth of A brands.

Fortunately, there are A-brands that recognize the need for a 'new normal for innovation'. Large multinationals, but also national brands that dare to innovate in a different way. Innovation remains an important driver of brand growth and in my view is the most important vaccine for A-brands in relation to sustainable brand growth.

Perhaps the good times will dawn for FMCG marketers who want to make a difference in their field. Can they now make use of the need to really innovate differently within the 4 walls of the A-brand? As a former manager used to say to me:

"If you do what you did, you will get what you got"

About the author
Founder & Managing Director Bamboo Brands B.V.