Farinaz: Mauro, thank you for taking the time to talk to me today. You and your team have a lot of experience in branding for the FMCG industry and have just recently received several awards for different projects in this industry. From your experience, and from a branding point of view, how does the FMCG market differ from other B2C markets such as Automotive?
Mauro: The first thing that pops into my head is pace. Fast Moving Consumer Goods (FMCG), as the name implies, is a very intense industry due to a variety of factors. First, there is immense competition. Imagine going to a supermarket: there are hundreds of different brands, hundreds of different products, all in the same category. In order to stay ahead, these brands have an immense output.
Pace not only plays a role for product development, but also with tasks such as packaging and communications. These processes require a lot of effort, such as intensive, continuous research, and painstaking work particularly for packaging design. In my experience, the implementation of these tasks is realized at much higher speed for FMCG brands. Another obvious difference is the dimension of the target audience, which is massive. FMCG brands are pretty much talking to everybody. Products in this industry are generally affordable and range from confectionery to basic goods that are needed in daily life.
FR: What would you say are the main differences between the FMCG industry in China compared to a Western European country?
MM: I think one of the big issues here in China is that branding sometimes seems to be more of an afterthought than a priority. Look at dairy products in China for example. I would say that there are maybe three or four brands which dominate the market here. And they tend to look very much alike in terms of corporate branding, packaging and even what is expressed through communications.
The other general issue we face in China, and I’m not sure if it is the same in the West, is that the work for packaging design is not particularly well compensated. So, the margins are really low, but the amount of work required by clients is still very considerable.
In terms of similarities, I would say they probably share the need to be fast paced. It may be that you have to be even faster in China than in the West, because companies here tend to go to market with new products at a relentless pace and competition is very fierce.
FR: Why do you think branding tends not to be a high priority for food companies? How do you, as a branding expert, approach clients with such a mindset?
MM: You just have to inspire them and show them there are different ways to do things. With companies that are used to a certain way of doing things, I think agencies have some responsibility to open their minds by showing them benchmarks and successful examples of how, within a certain industry, you can stand out and be different while still being successful. And in showing how by being different, you can enhance the possibility for your products of being more successful. It’s not always easy to find this type of receptiveness with clients in China, but I think this is changing. The more products are introduced into the market, the more companies will realize that strong branding is needed.
FR: What would you say are “do’s” and “don’ts” for food companies in China that want to stand out from the masses and develop a strong bond with their target audience?
MM: My first rule would be: Make an effort to differentiate. Not only in terms of branding, but also in terms of product innovation, packaging and communication. Do not get trapped in a sea of sameness.
My other “Do” is to know your consumers. In order to know your consumers, you need data. However, at least in China, I often see people relying a lot on data but I don’t necessarily see meaningful insights being extracted from such data in a way that actually provides value or help clients in their efforts to be more targeted, whether in branding, packaging or communication.
And this is why another “Do” for me is: Find the right partners to read through the huge amount of data available. Utilize the experience of reliable research and branding agencies who can conduct focus groups and quantitative research, and at the same time are able to guide you in extracting key, relevant insights.
On the other hand, in my opinion relying solely on consumer feedback and data insights is not enough. As a company, you must also have a point of view and a sense of what a consumer needs or may need in order to cover a gap in the market.
I always liked this quote from Steve Jobs, where he used to say: “People do not know what they want until you show it to them.”
FR:Do you have an example of a Chinese food brand that did it differently and were successful? What were the factors in their success?
MM: There is a big dairy group in China called Yili, currently the largest dairy group in the country in terms of revenue. They have a drink yogurt brand called Ambrosial (An Mu Xi), and Yili put a lot of effort into their product innovation and positioning, creating a whole world around their product, which was pretty unique when it was launched in China a few years ago. It was eventually imitated by other brands, but Ambrosial is still at the forefront and it has consistently broken record sales.
In my opinion, their first success factor was the product itself. It’s a good quality dairy product that filled a gap in the market. On top of this, they also found the right positioning and idea for their yoghurt based on insights into their target audience. They were surgical, addressing and attracting a younger crowd in a very clever way. Not only through communications, but also later when expanding their product line under the Ambrosial brand.
FR: Because of the strong bond that food companies create with their customers, you sometimes see rebranding projects go wrong. What would you say are three questions that every company in the food industry should ask themselves before jumping into a rebrand?
MM: A rebrand usually comes, or at least it should come, as the result of a new brand strategy which usually reflects a change in the business strategy.
So, the first question is: “Why are we doing this?”
Is it because we are completely reinventing the wheel of our business? Or because there’s been a crucial adjustment to our business scope and objectives? Answering this kind of questions will provide clarity about the purpose of the rebranding exercise and influence its type and scale.
The second question is: “How are we going to involve our people in this process?”
For a company, rebranding —unless it is done in a superficial way—actually goes very deep into an organization. For instance, when it comes to an FMCG product brand within a multinational company, you are talking about big business units and teams who are spread around the world. So, the big question is ‘How do we get all of our employees’ buy-in for this new rebranding proposition that we are willing to put out into the market?’
The third question is: “Who are we going to partner with?”
There are companies that have successfully managed to do a rebranding process in-house, but at the same time the majority of companies still need external help to guide C-level executives and the organization in this process. And when I say partners, I do not only mean branding, design, packaging or communication agencies. You must also consider research agencies and technology partners. Competent, experienced partners will help companies delve deeper into the organization, get them the right insights and identify the most suitable, and hopefully successful, solutions.
I think that if you can answer these questions, particularly the first one, then you are clear about what the purpose and objectives of the rebranding are. Which means you are already on the right track.
FR: You mentioned packaging quite a few times in our conversation. Would you say this is the main and most important touchpoint for food and beverage companies?
MM: I don’t think so. Surely, it is a very crucial touchpoint, of course. But branding agencies such as ours look at things in a more comprehensive way.
The word “packaging” itself tells you that what you are doing is ‘wrapping something into something’ to make it look nice and attractive. But in my opinion, at the end of the day, the most important thing is still the product itself, its quality, the actual benefits they bring to consumers. So, research and innovation are fundamental.
The other important thing is to stay abreast of the changing habits of consumer lifestyles and society at large. So, as a marketer, I would not only look at my target audience but also look beyond that. There is a very goo
d example with Ritter Sport. They successfully launched a completely new chocolate product line fully dedicated to vegans. They understood the need to put their ear to the ground, to open up and find inspiration for new business opportunities and fill a niche in the market and in their product line. As a result, they were able to offer a tasty product that has been very well received. Bingo.
Last but not least, I think companies need to build a proper story. You can have a good product, but if you are unable to tell the product’s story in an honest, real, distinctive and relevant way, you will be missing an opportunity at being successful. But such story must be built and told across visual identity, packaging, communication, store design etc. through creative excellence. In my opinion, creative excellence dramatically amplifies the opportunities to stand out in the market and be memorable.
FR: Let’s consider the current situation during the spread of Coronavirus. It has such a big impact on all consumer goods categories, with some impacted heavier than others. What do you think is the role of branding during these times? Especially for FMCG?
MM: Well, as much as I love branding, I think it is very difficult to determine how exactly branding can contribute in times like this. I like to look at it from a different perspective which is: How prepared are you as a brand to face situations like this? Eventually, it boiles down to the values of a company. Because, in times of crisis, the values of a company should make a difference. Being a branding agency, we help clients establishing company values that, in principle, should always be lived by from the top all the way through the bottom of the organization.
If, for instance, a company really conducts business and internal relationships around the values of ‘caring’ or ‘empathy’, there will be higher chances for them to build a strong company culture based on such values. These are the companies that in a time of crisis are more likely to take better care of their employees, partners and customers.
Additionally, in situations like the one we are living now, I think it’s also important to show how, as a company or a brand, you are connected to the community you operate in. Contributing to the community in forms, no matter how big or small, that help address certain problems, be it through financial or emotional support or by providing supplies etc., is something that responsible brands and companies in general could and should be doing during hard times. If this kind of thinking is ingrained in the corporate culture of a company, and I believe it should be, acting responsibly will come as a natural and authentic response.
As to another lesson that a brand can learn from this whole situation, I have a short answer: no matter how successful you think you are, never get too comfortable.
_Mauro Marescialli is Managing Director at MetaDesign Beijing
_Farinaz Rastgoo is Marketing Manager at MetaDesign Berlin