The CPG industry is undergoing a period of remarkable change. Manufacturers and retailers are witnessing rapid growth across many packaged goods categories, and it’s happening faster than at any other point in CPG history. These days, it’s possible for a manufacturer to go from new entrant to game-changing brand in just two to five years.
It’s no secret that this growth is occurring thanks to the rise of CPG data. Our entire industry has become impressively data-focused in recent decades, and understanding it can determine the success of an entire brand. At Bedrock, we’ve watched small, agile companies leverage data to disrupt highly established channels and corner niche markets nobody knew existed. That’s truly an amazing thing to behold.
While data is clearly important, many CPG sales and marketing teams still aren’t familiar with the best ways to use it. Perhaps they don’t understand the complexities of data analysis, or they aren’t versed in the offerings of syndicated data providers. Well-established brands overcome this challenge by hiring data analysts and category management teams. Emerging brands, however, often struggle to make the best use of data available in today’s landscape.
Such complications often begin at the first step of CPG data analytics: choosing a syndicated data package. After talking with our customers and experts about the challenges they faced, I believe there are some key strategies to keep in mind during this crucial stage.
The best way to obtain CPG data is to purchase access from a syndicated data provider. Three providers currently exist across the United States, each specializing in at least one retail channel.
Nielsen offers a complete set of category and competitive channels along with conventional retail data. The real feather in its cap, however, is Whole Foods competitive data, which no other syndicated source can report on. While the Whole Foods portal can be accessed through a separate purchase, Nielsen includes this information as part of its full dataset. (Note: access to the Whole Foods portal alone is free to any brand that’s distributed there, but it only offers visibility to their specific brand and items, not to competitive categories and brands, which is what a Nielsen subscription provides.)
The downside is Nielsen doesn’t have access to the Kroger chain. That said, a Nielsen subscription covers a huge swath of the entire United States CPG market. They offer access to some e-commerce data as well.
IRI is in a similar competitive position as Nielsen, but with a flipped advantage: it has exclusive access to Kroger, but not Whole Foods. IRI also goes well beyond traditional CPG datasets with highly granular brand-specific insights and detailed consumer behavior analysis.
SPINS currently offers highly comprehensive syndicated data packages and sells them for reasonable prices. It can accomplish this by obtaining conventional CPG data directly from IRI thanks to a contract between the two organizations, also providing granular item attributes and natural products consumer behavior.
So to recap, three syndicated providers each offer most conventional data channels, but none of them cover 100% of the CPG market. Each provider can also lay claim to at least one exclusive data set that no other syndicator controls.
That means any manufacturer conducting a competitive analysis between Whole Foods, Kroger, and natural products must pay separate fees to access each data package. The vast majority of emerging CPG startups simply cannot absorb these costs. Instead, manufacturers must turn to one syndicated provider who offers the most relevant information for their specific category.
This is not always a straightforward choice. Retailers like Walmart, Kroger and Whole Foods frequently change the level of visibility on their data, creating a tug-of-war between retailers and data providers over access. Even worse, if you choose a provider for specific data channels (let’s say IRI for Kroger), and they drop that coverage, you’d be left with an expensive data package that doesn’t meet your needs.
The good news is that reasonably priced solutions do exist. As of writing this, SPINS is likely the best choice for most emerging brands that are focused on the natural channel. A portion of Bedrock’s new customers use SPINS for data from conventional, Kroger, and natural food channels, then license the Whole Foods portal to gain an overview of the entire United States CPG market. That’s a far more cost-effective deal than buying similar data packages from three individual syndicators. Nielsen is starting to make some inroads with emerging brands but is still formulating a package that is cost-effective.
In today’s CPG climate, many emerging brands that leverage data effectively quickly come into their own. Naturally, after seeing what even basic data analysis can do, they want expanded access that will sustain their rapid growth. At this point, many brands turn to Nielsen or IRI for new datasets, but that’s not always the most cost-effective option.
Let’s assume you work for a CPG manufacturing startup that’s created a unique natural foods product. You’ve signed on with SPINS for its access to natural channels, granting you data that helps you position your item. Eventually, your brand goes national, and it starts expanding into non-natural categories that require more granular datasets.
Almost immediately, this expansion is going to face some challenges. Aggregating data between Nielsen, IRI, and SPINS simultaneously is a time-consuming, onerous task that requires a level of specialized knowledge. Most high-tier manufacturers will deploy entire category management teams to analyze these channels in a timely manner. That requires overhead and salary costs that scale with your operations. Growing brands will need to carefully consider their strategies to obtain the resources that generate actionable data.
But once again, the times are changing. Years ago, successful CPG companies needed to spend over $200,000 on data packages before addressing overhead and salaries. Today, agile competitors can leverage digital platforms and services to generate actionable data insights at a fraction of the cost. In 2019, it’s become quite common for brands to maintain their growth with SPINS alone by arming their sales teams with third-party data analytics. That’s where Bedrock comes in.
For years, emerging brands faced frustration and high costs when obtaining crucial data from providers. Today, the CPG industry has shifted towards data openness, but manufacturers still require actionable insights. Startups might be able to access data on a national scale, but often seek guidance on trends or visualizations.
These are the exact issues Bedrock Analytics was founded to solve. We understand that CPG data can be confusing, but we also understand the datasphere and can help you move forward. Our analytics platform offers the insights that will save your company money and make your product more effective. Whatever data package you choose, these are essential resources to have on hand.
If you haven’t purchased data yet, please fill out this form — we can guide you through the process. A little known fact is that a significant percentage of new syndicated data buys are coming via both our Bedrock customers and our large number of prospects. With our guidance, you can keep your costs affordable, and your data impactful. We know which product hierarchies, markets, periods and measures are necessary for the analyses that retail buyers are expecting from you. We can also set you up with a demo of Bedrock Core to see Bedrock’s analytical capabilities in action.