I like this @mmay3r.
1/ I’ve seen more ideas about how to disrupt CPG distribution over the past 12 months than any other time in my career.
1/ I’ve seen more ideas about how to disrupt CPG distribution over the past 12 months than any other time in my career.
2/ Let’s focus on offline distribution first. I think offline distribution in CPG is massively inefficient throughout the offline distribution landscape. Stale old industry, that doesn't use much technology, has a bunch of fat cats that don't innovate. It is ripe for disruption.
3/ Distributors like UNFI are ready to begging to be attacked.
4/ Large brokers add very little value. Brokers are ok when smaller, independent and the CEO hasn’t already made a ton of money.
Read: when your sales person is actually hungry it’s a good thing. There are a few we like (perhaps another Tweetstorm).
Read: when your sales person is actually hungry it’s a good thing. There are a few we like (perhaps another Tweetstorm).
5/ A core issue right now is the data throughout the distribution chain. Every member of this ecosystem (brand, broker/distributor, end retailer) all want data to find winners. To find innovation. There is none that a) is predictive of success, b) hasn’t been commoditized away.
6/ Thus all participants are relying on really bad data to find innovation to put on their “shelves”, decide who to work with, etc.
7/ With a vacuum of good data, they rely on relationships (“Hey Jimmy, great to see you again. We still on for golf tomorrow?” -said most distributors to most retailers) or they rely on taste (“this is the best chocolate bar I’ve ever tasted!")
8/ So…the retailers (end of the chain) then have bad data, people trying to convince them to take products based off their relationships/tastes. As a result, many fall into the pattern of just working with what they know: The stale large brands.
9/ This is more of a problem for large retailers because they are less willing to take chances on innovation than the small retailers.
10/ Consumers are bored with large brands and flock to channels/retailers that can give them innovation. That causes the large retailers to feel squeeze. There are some exceptions that are trying to lean heavy into data to find innovation- but not many.
11/ Some retailers are experimenting with other ways to drive value to the consumer- i.e. experiences, customer service etc. I think most effective long term way will still be to drive innovation through products. That requires data to identify the innovation.
12/ And some distributors are trying to get creative.....in old ways.
UNFI buying a customer (retailer) is fascinating. Puts even more pressure on other retailers. Now those retailers have a supplier (UNFI) that is also a competitor. Huh.
marketwatch.com/story/superval…
UNFI buying a customer (retailer) is fascinating. Puts even more pressure on other retailers. Now those retailers have a supplier (UNFI) that is also a competitor. Huh.
marketwatch.com/story/superval…
13/ Online to me is great for iterating on new products but d2c is horrible for scaling efficiently (which is why every major d2c brands has had to raise $X00m).
14/ If the question is what is CPG distribution innovation that will increase sales 2-3x. the answer is data.
Leverage non-commoditized data that can help them more effectively identify and foster innovation.
Leverage non-commoditized data that can help them more effectively identify and foster innovation.
