How the CPG Category Can Survive Disruption: Imperfection and In-Market Learning

September 20, 2018

By Martin Roper

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If traditional CPG brands want to survive and thrive in an environment where disruption by new and innovative competitors is now the norm, they must understand and embrace the idea of going to market quickly with imperfect products and then refining those products via in-market learning.

Boston Beer learned that lesson well when it rolled out Angry Orchard at a time when the category had yet to catch fire with U.S. consumers. Throughout the previous two decades, several hard cider brands had risen, stalled, and fallen by the wayside. Indeed, the company had launched a cider in the '90s, but it didn't take off as expected. However, in late 2010, the health of the then-current market leader suggested that there was an opportunity in this segment if its secrets could be unlocked.

The goal was to develop a cider that was new, fresh and relevant to the market — and would beat the category leader in taste and brand appeal. However, to achieve a win in this emerging sector and overtake the competitor, who was being acquired by a large global cider producer, the company had to go-to-market quickly (and imperfectly) to take advantage of what was an incredible opportunity before the full power of the new ownership could consolidate its position.

The key in this situation was to quickly get close to the customer, and understand that in-market experience would outweigh the potential benefit of waiting for "perfection." Because other contenders were in the offing, the risk of being late was too great to warrant waiting. In other words, in-market learning would refine the new brand more effectively than more lab time.

For Boston Beer, launching Angry Orchard meant going to bars and talking to drinkers and bartenders, visiting retailers, intercepting shoppers, and proactively sampling the competition against the product's formulations across a broad range of demographics and occasions — whenever and wherever possible.


Get on the Ground

While it's often tempting to rely on focus groups or online research for the abundant amount of data they can provide, what's actually happening on the ground is a better indicator of current and future consumer behavior versus reviewing data while sitting from behind a desk. Additionally, it's no secret that a large portion of the population is underrepresented when it comes to traditional brand research tools.

The key is to conduct marketing field trips in all environments — urban, suburban, exurban, and rural — and across the whole country, not just major coastal cities. Non-urban consumers, who often can become your best customers, have significantly different opinions, habits, and preferences than people living in cities. In short, when it comes to marketing field trips, go wide.

On a parallel track, it's incredibly important to create semi-independent, agile teams that can incubate products outside the normal confines of the organization. The teams must be granted a clear mission of speed to market and permission to quickly try, learn, and adapt to product performance in different geographical locations. The permission to fail and learn will encourage the teams to take short-term risks because they'll understand that, if those decisions pay off, it will mean quick success, and if not, quick learning and adjustments can improve the chances of long-term success.

While the teams should have great freedom to make decisions and move quickly, they should also have access to the great resources and experience of the parent company to accelerate their speed and probability of success. By legitimately empowering these teams, and getting out of their way, you enable the brand to go-to-market faster and react to in-market learning without disrupting the normal business processes.

Did this approach work for Boston Beer? Absolutely! After its 2011 launch, Angry Orchard quickly overtook the market leader and by the end of 2014 sales had soared to more than a 55 percent market share — a share the brand has maintained to this day. Just as important, the commitment to and support of the brand helped the overall U.S. cider category to take off and grow, increasing the size of the prize.

While the company learned a lot from this experience, the major takeaway was that to "capture the flag" in this category, in-person interaction outside of urban areas, coupled with speed to market and in-market adjustment were the keys to success. In fact, the approach was so successful that the company applied it to the hard sparkling water category with similar results.

The bottom line is that today's established CPG brands have to pivot, reinvent, and adapt to their customers faster than ever. Lower barriers to entry have increased the pace of change and competitive innovation. Today's consumer wants different, new, and customized experiences in ways that are fragmenting segments and evolving them faster than ever. Simply put, only by being nimble and responding quickly and effectively in the real world can CPG brands win in an increasingly fluid consumer-market environment.


Martin Roper retired as president and CEO of Boston Beer in April following a 17-year tenure.


The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

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