Growth MazeAs most legacy brands struggle to sustain or grow volume using traditional marketing and innovation activities, it is becoming more important to study those food businesses that are growing well. In doing so, food companies can learn a new strategic playbook. It is a playbook based on a key assumption: your portfolio of food and beverage must change. The edible experiences you are selling must change. 

Slow-build launches. Market-by-market distribution expansions. Incubations. Acquiring new brands (tomorrow’s cash cows) without cultural baggage. Transferring cash-cow profits to support expansion of smaller brands. Minority investments. Joint ventures to extend into new distribution spaces. 

These are just some of the emerging strategic plays for companies that desire to be built on organic, real internal growth (vs. cost cutting and mergers/consolidation). 

These emerging strategic moves all rest on an acceptance that not all legacy brands will be offering growth moving forward. Only a select percentage will. So, if a substantial part of a typical food and beverage company will not be experiencing real growth, its portfolio of food and brands must change with the times. 

We have validated the reliability of two primary portfolio strategies for the food and beverage company of tomorrow: 

  1. Shifting your portfolio toward the premium end of your category 
  2. Shifting your portfolio toward emerging foods/categories even in highly processed, non-premium forms 

The challenge is in understanding where the pockets of growth are in the specific categories you currently operate within and the categories that you should be extending or buying your way into over time. And the ability to act on these growth insights may require letting go of legacy brand bias and being willing to buy or invest in new brands more credible than most legacy brands are in promoting fast-growing premium food and beverage experiences.

For more thoughts on finding reliable sources of growth, please download our Hartbeat Exec on the state of the food industry, U.S. Packaged Food at a Crossroads.