Who Are the CPG Icons of Digital Grocery?

Based on the results of a new consumer, retailer and manufacturer survey by Cadent Consulting Group in collaboration with WGB, this inaugural Digital Icons report identifies manufacturers of both national (the big players) and challenger brands (the up-and-comers) that have set a strong standard of performance as rated by consumers, their peer manufacturer competitors, and leading retail customers.

Originating from WGB’s and Cadent’s work to understand the rapidly growing omnichannel space, the Digital Icons survey looks at both the fundamentals of digital activity execution as well as superior performance. The report further acknowledges the critical role the consumer plays in the direct-digital purchase equation and is rooted in the belief that a combination of perspectives from the three constituents—manufacturers, retailers and consumers—represents the most authentic assessment of iconic digital performance.

The Digital Icons study further provides insights on the digital business drivers contributing to the strength of these manufacturers; examines why these business drivers are critical to success; considers manufacturer rankings (based on peer, retailer and consumer responses) on digital acumen across key business drivers; and targets action steps for manufacturers to ensure their digital capability is a growth driver.

“This study with Winsight Grocery Business is timely because it addresses who is performing well in digital at a time when manufacturers and retailers have been forced by the pandemic to adapt quickly to grow their businesses digitally,” says Richard Bode, managing partner, Cadent Consulting Group. “The combination of consumer, peer manufacturer and retailer feedback was critical because it acknowledges the role of the consumer in the purchase equation along with the collaboration required between manufacturers and retailers.”

For the study, consumers were asked to rate manufacturers across a variety of criteria, including digital advertising, social media/influencer marketing and user experience. Manufacturers rated their peers across key criteria including digital advertising, social media/influencer marketing and direct-to-consumer. And retailers were asked to rate their trading partners across performance in digital advertising, social media/influencer marketing and manufacturer collaboration on digital.

“Across all the respondent groups—consumers, manufacturers and retailers—consumers rated manufacturers most critically. Their expectations of the CPG industry have heightened as meeting consumers’ digital needs has become more critical to conducting business,” says Bode.

Over 1,000 consumers, manufacturer and retailer respondents provided input on the results by rating both national and challenger manufacturers in a survey fielded in August 2021. In addition to selecting their Top 2 manufacturers leading in digital performance, respondents also provided open-ended feedback to describe the reasons for their responses. For each manufacturer, the consumer and manufacturer scores were accorded the same weight (25% of composite, respectively) and the retailer scores were double weighted (50% of composite) to recognize the importance of the retailer influence in the purchase dynamic.

“This study is a brisk wake-up call and a confirmation that the practical side of digital execution is upon us,” says Ken Harris, managing partner, Cadent. “Leaders identified in this report have shown the way by combining the energy of creativity and pragmatic execution to reach consumers and their retailer partners in new and effective ways.”

Calibrating the Success Equation

COVID dramatically accelerated the pace of change in grocery, advancing e-commerce and digital capabilities by leaps and bounds. This advancement was driven by the consumer, who adopted new behaviors quickly and demanded change. Manufacturers, big and small, were forced to adapt in order to meet the evolving needs of both consumers and retailers.

Given the impact of the pandemic on shopping and marketing behaviors, WGB and Cadent sought to examine which CPGs are leading in digital grocery and why. Interestingly, the study revealed that when it comes to digital performance, newer, smaller and more disruptive challenger brands frequently have an advantage over established national brands.

“The results showed that challenger brands often set the standard in digital leadership because digital was part of their DNA from the start,” says Michael Faucher, senior business analyst for the Cadent Consulting Group in Wilton, Conn. “This finding provides support for how challenger brands have upended major categories and taken share by moving quickly to collaborate with retailers on digital execution.”

While there is no one formula for CPG success in the digital grocery space, Cadent found that the superior performing manufacturers identified in this study had four elements in common across the three respondent groups: collaboration, creativity, consistency and boldness. This equation was continually cited as the reason consumers, manufacturers and retailers selected the best-rated manufacturers.

Collaboration

It is easy to understand why a retailer would rank a manufacturer highly when they work closely together to solve problems and share opportunities, notes Cadent. The digital space is no exception. The leading manufacturers were consistently cited as bringing important and interesting insights to the retailers in pursuit of developing mutual business in the digital space. Challenger brands often set the standard in leadership in this field because they have more experience in direct-to-consumer, online transactions that provide a blueprint for the retailers.

“Collaboration with consumers is a bit harder to understand, but it very much aligns with retailer partnership,” notes Bode. “Consumers often cited that leading manufacturers better understood their needs and provided open and honest digital dialogue to address consumer perspectives. The high-touch format of direct-to-consumer provides leading manufacturers with an opportunity to talk directly with consumers and to use this input to impact product, promotion, and ultimately consumer satisfaction.”

Creativity

“Creativity was identified as a key differentiator for manufacturers,” says Elise Whitney, Cadent director of analytics. “To be more accurate, it is creativity with a purpose. It must be geared toward the ultimate transaction of selling product.”

In particular, retailer survey respondents commented that they respected the leading large and challenger brand manufacturers for their ability to use the digital communication vehicle as a platform for effective consumer engagement in pursuit of selling. They recognize that they too can benefit from this expertise by working closely with those leading manufacturers to achieve success for their own websites.

Consistency

Of all the elements, consistency was probably the most often cited as the reason for leadership success, notes Bode. Consistency specifically means consistent messaging across platforms, whether mobile, desktop, tablet or even analog technologies like TV and radio. It was clear from survey feedback that the ability to create one, uniform message that can be used in many media is integral to the ultimate performance success in the digital space. The leaders identified by Cadent through this study have been able to use this consistency to better position products to retail and ultimately to consumers.

Boldness

“Those manufacturers who made the decision to dive headlong into the digital world have reaped the benefits of early adoption,” says Bode. “All of the leading manufacturers in the Digital Icons study had well-developed digital platforms prior to COVID-19. The pandemic accelerated their development, and in many cases, had the leaders doubling down on the investment they made in digital communication.” Meanwhile, other manufacturers were left to either initiate action or to accelerate investment on digital communication without the benefit of time to prepare.

“However, the ‘X’ factor with the Digital Icon leaders was the almost universal acknowledgment that there is no perfect solution and that trying and failing fast are essential to digital performance,” says Whitney. “Rigidity is a surefire way to be left in the dust.”

Top 10 Manufacturer Ratings

When looking at the top 10 manufacturers for digital performance, it’s clear challenger brands are increasingly powerful competitors in the digital sphere. While Coca-Cola takes the No. 1 spot in overall digital acumen, challenger brand Bang Energy is a close second, followed by the oat milk makers at Oatly, the vitamin brand Olly, White Claw and Harry’s to make for a list dominated by challenger brands. PepsiCo is the No. 2 ranked large, national manufacturer.

Though challenger brands generally lack the scale or funding to drive nationwide marketing campaigns like the large manufacturers, says Faucher, the accessibility of digital channels (i.e., social media, influencer marketing, subscriptions, etc.) enables them to directly connect to consumers in new and critically important ways.

Based on the Digital Icon study, Coca-Cola is one national brand that gets the importance of digital and reaching consumers where they are—which is increasingly online.

“As our digital lead icon, it is clear that Coca-Cola is connecting company innovation, like their functionally enhanced Coca-Cola Energy beverages, for example, to their consumers,” notes Whitney. “Strategies such as these are likely why consumers have rated Coca-Cola the highest of all the brands and retailers have rated them as one of the Top 2 partners when it comes to digital acumen.

“Big companies like Coca-Cola are really doing a great job in the digital marketplace by using paid advertising,” said one survey respondent.

However, the study also shines a light on differing opinions with regard to how well certain brands are performing in digital. The study finds that while manufacturers give themselves high marks on digital advertising and social media, consumers are less impressed.

“From a user experience standpoint, manufactures and consumers are aligned in that there is room to improve,” says Bode, who adds that a key finding of the study is that retailers, overall, rated manufactures lowest on collaboration. “This is a critical need for retailers that manufacturers will have to address in order to grow,” he adds.

Top 10 Overall Manufacturer Ratings

Top 10 Manufacturers, Digital Advertising Performance

While a few challenger brands made the Top 10 for digital advertising performance, this is a category where national brands take the lead. KraftHeinz is No. 1, with the highest scores from retailer respondents. But while retailers praised the company’s digital advertising efforts, consumers gave KraftHeinz the lowest digital advertising score among the Top 10. This may indicate an opportunity, says Cadent, which points to the strong digital advertising performance of challenger brand White Claw. Respondents noted that when brands, like the hard seltzer maven, ensure its ads are all open ads spots—top and side banners, etc.—the strategic positioning drives conversion behavior.

Top 10 Manufacturers, Social Media/Influencer Marketing

While a few challenger brands made the Top 10 for digital advertising performance, this is a category where national brands take the lead. KraftHeinz is No. 1, with the highest scores from retailer respondents. But while retailers praised the company’s digital advertising efforts, consumers gave KraftHeinz the lowest digital advertising score among the Top 10. This may indicate an opportunity, says Cadent, which points to the strong digital advertising performance of challenger brand White Claw. Respondents noted that when brands, like the hard seltzer maven, ensure its ads are all open ads spots—top and side banners, etc.—the strategic positioning drives conversion behavior.

Top 10 Manufacturers, Large/National

For national manufacturers, beverage seems to be a key category for those doing well online, as four of the Top 10 manufacturers are major category players, including Coca-Cola, PepsiCo, Red Bull and Monster. In the Top 3, Blue Buffalo is unique as a pet food brand. It earned the highest marks from retailers, followed by manufacturers and consumers. “Blue Buffalo has done a great job capturing new pet owners. Their digital coupon and digital advertising is top notch,” said one retailer respondent. Beverage brands also scored high marks in the survey for their social media and influencer marketing. Within the Top 10 national manufacturers constituent, leaders included Coca-Cola, Red Bull, PepsiCo and Monster.

Top 10 Digital Advertising Performance

As previously mentioned, KraftHeinz performed well with retailers on digital advertising, but has an opportunity on consumer engagement. Unilever and L’Oreal performed well as rated by manufacturers indicating that they are held in high regards by their peer set. The overall preponderance of lower consumer scores shows that digital advertising is viewed by consumers with a critical eye, says Cadent.

Top 10 Manufacturers for User Experience

When it comes to user experience, the easier a website or app is to browse and the more traffic that a website or app obtains, the more likely that consumers will increase their basket size and purchase, reveals the Digital Icons study. The results of this survey question show that this is a metric in which challenger brands and large, national brands have a level of parity in scoring, with only a 7-point differential from the best user experience, grooming brand Harry’s Shaving, to the 10th best, Kellogg Company.

Top 10 Manufacturers, Direct-to-Consumer

Understandably, scrappier challenger brands trying to make a name for themselves with consumers, command the direct-to consumer channel. Here, Kodiak Cakes earns the top spot, with its strong purchase subscription model featured prominently on the company website. At No. 2, Harry’s, which pioneered the delivery of shaving razors directly to consumers’ doors, is considered by many as the barometer of success in DTC. “Harry’s Shaving was one of first to pioneer in DTC—a major disruptor. Harry’s took initiative before large CPGs. Now, I’m keeping a watchful eye on all new DTC startups for ‘clues’ to market success,” said a manufacturer respondent.

Top 10 Large, National Manufacturers, User Experience

Hershey is in the top spot for driving user experience with its websites and brand assets. On balance, the relatively lower scores earned in user experience performance indicate that consumers are rating these manufacturers against a larger consideration set of user experiences, says Faucher, who adds, “user experience represents a broad opportunity for the CPG industry, but Hershey has pushed ahead, with continued room to improve.”

Top 10 Large, National Manufacturers, Direct-to-Consumer

With household products and personal care leaders P&G and Unilever in the No. 1 and No. 2 spots, respectively, for DTC, the survey would seem to indicate that large, national manufacturers specializing in nonfoods possess a more effective direct-to-consumer experience for the consumer. Similarly, L’Oreal makes the list at No. 7 and pet food supplier Blue Buffalo comes in at No. 8.

Top 10 Large, National Manufacturers, Collaboration on Digital

For national manufacturers, beverage seems to be a key category for those doing well online, as for P&G, PepsiCo and Coca-Cola receive the highest marks for collaborating with retailers. “Scale can matter in collaboration and retailers value the efforts these companies have put forth,” notes Bode. Collaboration is critical in achieving success and the high marks for many companies bodes well for continued improvement, he adds. The results underscore how important it is for manufacturers to collaborate with retailers on digital strategy and tactics. These leaders bring ideas to retailers that impact product, promotion, price, and ultimately consumer satisfaction.