Why Is Big Food Touting its Brands with Pop-Up Stores? - Integrated Research Analyst
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Why Is Big Food Touting its Brands with Pop-Up Stores?

By Dale Buss
Kellogg, Pure Leaf and Chobani are among a number of CPG companies that have been sprouting “pop-up” stores that tell their brand stories. As well as fashioning “stores within a store” in larger retailers, CPG brands are putting these pop-ups into semi-permanent locations on street fronts in New York City and other heavily populated locales.
The reason: CPG brands see grocery retailing undergoing unprecedented competitive pressures that stress store chains to promote themselves and store brands, a development that could make it harder for brands to promote themselves in supermarket aisles.
What’s more, pop-ups create a new prong in experiential marketing that seems to appeal especially to millennials in search of the next great encounter with food that they can photograph and post to Instagram and other social media. Pop-ups also are a way for brands that have been around a while to demonstrate some of the same sort of street ambition that has helped start-up companies upend the established order in CPG.
“You can’t do this in a grocery store,” Pure Leaf senior marketing director Laraine Miller told the Wall Street Journal, speaking of the PepsiCo-owned brand’s elaborate tea house in New York that incorporates museum-style installations featuring the history and uses of tea.
In other words, as John Grace, president of BrandTaxi, and a leading branding consultant, put it, “What many tactics [in retail stores] can’t successfully communicate is the underlying meaning and essence of a brand – what it stands for and why it is different from its competitors. One of the challenges of our times is how to create consumer ‘brand experiences’ in a digital world,” Grace said. “Pop-up stores are one ingredient in the mix, particularly in high-population markets and cities. If done correctly, word gets out very fast.”
Top CPG consultant Ken Harris summarized the appeal of pop-up stores for brands. “They’re trying to disintermediate the retail-store experience and add a sense of ubiquity in the mind of the consumer,” said the managing director of Cadent. “And usually because a pop-up store has some sort of promotional aspect to it, they’re trying to expose consumers to their products in places that they wouldn’t necessarily expect to find them – and allow them to try things that they ordinary wouldn’t expect from the company serving it to them.”
For example, Kellogg operates Kellogg’s NYC, a cereal café in Times Square where bowls of the morning favorite are served all day in a wide range of unusual preparations. Among other things, the pop-up allows Kellogg to test out-of-the-box flavor and texture combinations, such as Corn Pops paired with lemon zest, Pop-Tart milkshakes, and Eggo sandwiches with toasted marshmallows and chocolate.
There also are mind-bending twists in which a hot-dog sausage is made out of Cocoa Krispies, crushed vanilla latte-flavored Pop-Tarts, and marshmallow, then tucked into a bowtie doughnut bun and topped with vanilla-flavored yellow frosting that looks like mustard and green apple-flavored gummy bears that look like relish.
As Grace told CPGmatters, Kellogg “can extend not only recipe ideas, but also play into trends about how cereal is consumed an all day parts. Through style, design and attitude, they have the chance to elevate the brand beyond their more limited perceptions today.”
And Harris explained, “Chefs and R&D folks get access to consumers and ideally delight them in ways they weren’t expecting. It allows brands to extend their reach beyond their grasp, because they wouldn’t normally have the opportunity to interact with consumers in various day parts, venues and situations where they aren’t normally expected to be found.”
Chobani has made pop-up stores part of an ambitious experiential-marketing push over the last several years that has helped the brand rocket to the top of the $8-billion yogurt category.
First came its Chobani Cup Trucks, sampling vehicles that have distributed more than one million Chobani yogurt cups per year for six years as they’ve traversed America, stopping at events and venues where there are lots of people.
And then in 2012, the brand opened the Chobani SoHo Café in New York City, a Mediterranean-yogurt bar that showcased the brand. Chobani also has created a pop-up café at the Sundance Film Festival and showed off its culinary creativity for the chic Hollywood crowd.
Since then, Chobani has opened a small Chobani Café inside a Target store in the Tribeca neighborhood of Manhattan and in a Walmart in Texas.
“We treat the cafes as a test-and-learn proposition, for marketing, and they’re highly experiential,” Chobani Chief Marketing Officer Peter McGuinness told CPGmatters. “They are inspiration and incubation and innovation centers where we use our plain yogurt as personal canvas and make a lot of creations and focus people’s minds and imaginations on all the different ways that they can consume yogurt.”
Those include putting Chobani in baked goods, soups, salad dressings, and rice pudding. Some of the Chobani Café creations, McGuinness said, ended up serving as inspirations for Flips, the new Chobani line which keeps yogurt and mix-ins separate until the consumer “flips” the lid of the yogurt container and combines them for a fresh kind of taste and texture sensation than completely pre-packaged yogurt with add-ins.
Flips are growing at 50 percent a year, McGuinness said, and Chobani introduced thee new SKUs in July.
“Consumers come in and love what we’re doing in the cafes,” McGuinness said. “That’s’ why they’re some of the most Instagramed restaurants in the country.”
As Grace said, “Chobani can more broadly define their brand and brand experience and move away from functional product comparisons. Chobani stands apart in terms of their philosophy, and they need even more than advertising to accomplish those perceptions.”
For such reasons, Harris said, “pop-up” stores for brands have become “the real estate version of ‘for a limited time only.’” But, he cautioned, brands can be expected to explore this new territory judiciously, because there are risks. For one thing, CPG brands aren’t likely to come to count on pop-up stores to move any kind of significant product volume, but rather to serve as product and brand theater as long as they’ve got the right “performers.”
“It’s a balancing act,” Harris said. “It could quickly become a bridge too far: It could become a store that you shouldn’t be in or a location you shouldn’t be in, or the people you’re hiring aren’t up to the quality you need to make that right consumer experience.
“So more brands will be trying poking, prodding and extending, and a few will figure out this is a business they want to be in and will go past Version 1.0 experiments,” he said. “Others will casually get into it and realize before long they are into a business they don’t want to get into. Still others will simply get out, not as successful as they’d hoped.”
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