In the CPG Industry, Small Brands Aren’t Just Competing With Giant Corporations, They’re Winning.

For years, I’ve been writing about video marketing effectiveness. About how the falling price of video production has enabled small to medium-size companies to compete with larger brands.

This week I came across even more proof—statistics about the Consumer Packaged Goods industry.

In the past 6 years, 90% of the top 100 CPG brands have lost market share to smaller competitors. More than $17 billion in sales has shifted from well-known brands to virtually unknown companies and startups.

How do you explain this? Some people blame Millennials (they get blamed for everything). Others say it’s just another consumer trend.

That may be true. But I also think it’s stong evidence of video marketing effectiveness.

Artisan bakeries are just one example of small CPG companies.

The Rise of Local Brands

Artisan bakeries are on the rise (no pun intended). Microbreweries. Craft spirits. So yes, consumer tastes may be shifting to smaller, local brands.

But there’s more to it than that. For years, the giant CPG companies were the top advertisers on daytime TV.

It’s why all those daytime TV dramas are called “soap operas.” In the early days of TV, P&G and other laundry detergent companies were the main sponsors.

And after decades of success, they were slow to change strategy. According to RetailWire, the large CPGs didn’t move quickly enough to address market trends. For example, to move into new product areas like coconut waters and whey protein bars. Smaller companies were able to ramp up video marketing and beat the large CPGs to the punch.

The Rise of Video

Then there’s another big trend—the rising popularity of YouTube and other sources of online video. In 2018, people watched an average of 1.5 hours of online video each day.

In 2020, that jumped to 2.5 hours a day—a huge spike in demand attributed mostly to the pandemic lockdowns.

At the same time, small and medium-size businesses are creating more video content than ever before.

According to Promo.com, 51% of small businesses post a video more than once a week, and 36% post videos more than 5 times a month.

The explosion of videos on YouTube and social media has had a playing-field-leveling effect, for CPG brands and other business sectors as well.

Brands of all size can produce videos and compete.

American Spirit Whiskey, or ASW, has always focused on customer experience in their marketing.

Video Marketing Effectiveness

Obviously, this wasn’t always the case. For decades, only large companies could afford to do TV advertising. The high costs of production and media effectively prevented smaller companies from competing.

Of course, that’s no longer the case. Today, 86% of businesses do video marketing.

And I believe it’s a big reason why CPG market share has shifted so much.

The fastest growing CPG segment, according to RetailWire, was “extra small” CPG brands, with growth of 4.9%. The larger players grew by only 0.6%.

Sounds to me like video marketing, done right, is the great equalizer.

ABOUT THE AUTHOR

Harry Hayes is the owner and executive producer at Content Puppy Productions. Before starting his business, he spent 20+ years as an advertising writer and creative director.

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