Brand purpose is not what many consumer packaged goods (CPG) companies think it is. It is not just about sustainability, and it is not a mission statement or marketing slogan. It encompasses the end-to-end business, from operations to product design. It also represents the full suite of attributes people choose from when considering a brand—is it fun, is it inclusive, is it environmentally sensitive? Increasingly, people pick brands that embody their values.
of consumers strongly consider values-driven attributes in their decision making.1
more is what consumers are willing to pay for products that embody values.2
What consumers value most may surprise you
CPGs must shift their focus to align with what consumers care about, and this isn’t easy as people often define their values in counterintuitive ways. For instance, in the past year, people (85%) considered small indulgences as the most important health and wellness factor—more important than dieting and nutrition. In terms of promoting positive societal impact, 66% of people said animal ethics were the most important factor. And while personalized products are known for elevating brand experiences, more than half of people (54%) said nostalgia was the most important experience factor.
Industry value is moving to purposeful brands
Purposeful brands that are defined by human desires—entertainment, indulgence, health or other—are disrupting entire CPG categories. Venture capital activity toward purpose-led investments has more than doubled globally since 2016, suggesting opportunities for disruption. Brands that advocate for health and wellness saw the highest total investment versus other purpose-led attribute areas, receiving $12.7B in funding between 2016 – 2020.
CPGs will need to adopt a category-by-category approach to determine which consumer needs should be addressed in each category to help differentiate the brand.
Think bigger, do better
The call to action for CPG brands is clear: Commit to a clear and compelling purpose, align every brand experience to that purpose and then evolve the brand portfolio strategy to play strongly on purpose attributes.
These are some ways to begin the journey:
Commit to purpose from the inside out
Winning brands understand the values that matter to consumers and commit to an authentic purpose that supports these values. This commitment is more than a statement of intention; instead, it requires the brand to align the entire offering and operating model around that purpose - from products to production to the people who work on the brand.
Deliver end-to-end brand experiences that drive relevance
Brand experiences are not one-size-fits all, so why do so many of them feel the same? Alternative brands have been successful because they often focused on engagements that conventional brands ignored - for example, providing a personal touch. Personalized product recommendations account for 26% of ecommerce conversion. Winning brands increasingly engage consumers directly in carrying their message and brand purpose to market.
Shape the portfolio to center on brand values
Evolve the portfolio strategy over time to look for opportunities to play strongly on purpose attributes. Each brand within a portfolio has a unique role and purpose. And as those brand purposes are more clearly defined and consumers understand them, the business then can explore how to expand its offerings to further support key values-based attributes.
For instance, the mission of Nestlé Health Science is 'empowering healthier lives through nutrition.' Nestlé Health Science has regularly added to its portfolio of health-driven offerings through a targeted acquisition program. In recent years, the company acquired brands as varied as Aimmune (allergy therapeutics), Persona (personalized vitamins) and Vital Proteins (collagen brand and lifestyle and wellness platform) - diverse businesses which all consistently serve its core purpose.