For the better part of the last century, America’s largest consumer packaged goods companies ran an undefeated business playbook. All of the iconic consumer brands of our lifetimes—Coca-Cola, Lay’s, Cheerios, Oreos, and more–-were built on a simple, three-part formula.
First, generate massive demand by placing huge national ad buys. Next, create ubiquity by stocking the brand across every conceivable grocery store shelf. Third, harvest as much profit as possible through the economies of scale created by giant production runs.
This model worked especially well in America because this country is huge, rich, and culturally homogeneous. National TV ad campaigns could shape popular tastes at scale so that, in turn, a single formulation of a cereal, snack, or soda could satisfy tens of millions.
But that world is now gone, and gone with it is the reliable engine of big CPG company growth. The culprit? Social media.
The truth is that consumers no longer look to television and mass-market media for guidance on what to buy at the supermarket. A recent International Food Information Council survey showed that half of respondents tried a new recipe based on information from social media. Another 42% tried a new product and nearly a third changed their eating habits entirely.
