Why It’s Hip to Be a Small Food Brand in a Big Market

Back in the day — not long ago, actually — big brand names carried a lot of cachet. Being an unknown was such a disadvantage that smaller brands would go out of their way to imitate the big guys, down to look, feel and even name.

Now it’s an underdog’s market. It’s trendy to be small and unknown. Even the bigger brands are breaking off their smaller products and hiding them behind independent-sounding names in order to compete.

So, what’s the deal? Why the change, and why now? Here are our thoughts on why big brands are facing a reckoning.

CPG Food Brands Industry Crisis Startups Vs. Big Companies

Market Fragmentation

Milk. Bread. Eggs. The basics, right? Options weren’t always as sprawling as they are currently. Now you’ve got soy milk, gluten-free bread, cage-free eggs. Pretty much anything a consumer would want in a product is now available in some form. The food market has fragmented in unprecedented ways. It’s tough for a big brand to expand its umbrella enough to cover it all. Smaller brands have rushed in to fill the gaps, and the demand is such that these small, fragmented markets are surprisingly sustainable.

Niche Food Categories

Along those same lines, niche markets have emerged. Meat-and-potato diets are a thing of the past, at least on a large scale. Now, consumers can tailor their diets however they choose. Foods that once seemed quirky or even weird — such as probiotic beverages or dehydrated seaweed snacks — are finding homes. As such, smaller brands are more comfortable experimenting with new food categories without turning off the broader consumer base.

The Appeal of Startups

Much of the downfall of big brands has to do with perception. It’s hip to discover a new food product and introduce it to your friends. Today’s consumers also get a sense of satisfaction when they know they’re helping a startup brand make inroads in a market previously dominated by big brands. The same phenomenon that is propping up the “farm-to-table” model is helping smaller brands find an audience eager to cut out the middle man.

Ecommerce Grocery Shopping Food Industry Competition Startups

The E-Commerce Explosion

Of course, all of this is possible because consumers have the means to get their hands on what they want. They’re taking their shopping online, and that helps the smaller brands. If big brands benefited from the limited shelf space of the traditional grocery store, smaller brands find it much easier to muscle into an online market where the playing field is level. Consumers are far bolder in their shopping when they can seek out virtually any food product they can dream of.

PacMoore — Your Go-To for Specialty Food Manufacturing

PacMoore has a long history assisting big and small brands alike. We have helped our customers reach audiences across the spectrum by offering crucial support in specialty food production. Our deep knowledge in this space helps our customers break into new markets with innovative solutions. Contact our team today to learn more about our specialty food offerings, and find out what we can do for you.

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–> Check out this blog by the CEO and Co-Founder of TeaSquares: “To Manufacture or Co-Manufacture?”

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