With everyone in grocery being called on to do their bit, will the coronavirus crisis put an end to ‘touchy-feely’ brands with purpose? Or will it make those who make commitments to sustainability and fair pay more important than ever before?
Crisis reveals character. As the world is plunged into turmoil thanks to coronavirus, companies across the grocery sector are being called upon to do their bit. Whether it’s ramping up manufacturing capacity to keep shelves stocked, switching production lines to produce hand sanitiser, providing essential supplies to those in self-isolation or key jobs, or offering much-needed employment opportunities to workers laid off as the economy grinds to a halt, there is plenty of opportunity right now for fmcg brands to demonstrate that ‘purpose’ can mean more than marketing fluff.
But the Covid-19 crisis could also create big challenges for purpose-led brands. Previous commitments around sustainability and sourcing ethics may prove less affordable as disposable incomes fall and consumption habits change. Meanwhile, high-profile pledges on fair pay and generous employee benefits could clash with the need to make tough decisions about staffing levels to keep businesses afloat.
So how should brands navigate this new environment? How is the coronavirus outbreak likely to change what consumers expect from brands with purpose? And what does this year’s Britain’s Biggest Brands data tell us about how big an impact purpose has on sales anyway?
“Over the next few weeks and months, purpose for some companies and brands will be tested as never before,” says Rob Metcalfe, chairman of Richmond & Towers, in a recent blog. “When it’s a fight for survival in a chaotic market, it must be easy for all those touchy-feely principles to seem like a nice-to-have rather than a must-have.”
Purpose at heart
Under those circumstances, brands with genuine purpose embedded at the heart of their organisation will win out, Metcalfe believes. “They will treat their employees with respect and dignity – even in the most difficult of circumstances – and as they emerge from the other side of the crisis, they will retain, and even build on, the loyalty of their customers and suppliers.”
Brands that hold on to their purpose stand to benefit in other ways, too. Clear purpose has long allowed companies to be more focused, streamlined and efficient – and make better decisions under pressure. “Alignment between the short-term decisions and long-term direction help to ensure that tactics and strategy work hand-in-hand,” says Linda Ellett, UK head of consumer markets at KPMG. “Never has that been clearer than during the current Covid-19 situation, where brands are actively seeking out and expressing the contribution they can make to the way their consumers handle the hurdles ahead.”
“Brands with purpose will retain, and even build on, the loyalty of their customers and suppliers”
Still, the coronavirus crisis will inevitably change how consumers view purpose, believes Eleanor O’Leary, founder of The Better Brand Consultant. “We might start to see the concept of purpose shift towards real, embodied responsibility,” she says.
Instead of company-specific purpose, the notion of a common purpose and working together towards the greater good could become more important. An early example of this in action is Rubies in the Rubble, the sustainable food brand that makes condiments from surplus food, says O’Leary. “They have gone beyond their immediate purpose around food waste to using their social channels to also share positive news stories as well as information on how to support small businesses during the crisis.”
In the short term, at least, brands might want to talk less about their core purpose and more about how they are doing their bit to support the wider community and others in their industry, suggests O’Leary. “While being ‘purpose-led’ won’t necessarily go out of fashion, I think what we will see is an expectation for businesses to use their influence to behave responsibly over the coming weeks and see us through to the other side.”
Questions about how brand purpose will evolve over the coming weeks and months come at a time when there are already plenty of unresolved questions about the commercial value of purpose – and how much of a difference it makes to a brand’s commercial performance.
While the prevailing narrative is that consumers increasingly expect grocery brands to not just make good products but do good for society and the planet – especially as they face growing pressure from purpose-led challenger brands – the figures paint a more inconclusive picture.
In this year’s Britain’s Biggest Brands ranking, some brands with big purpose-focused campaigns, such as Cadbury, have indeed done well – but so have many brands that wouldn’t be considered overtly purpose-driven.
A minority concern
This is partly because though the number of consumers who care about purpose is increasing, they still represent a minority, says Elio Leoni Sceti, former CEO of Iglo Group and co-founder of investment house The Craftory. He puts the split at roughly 25:75, while a recent YouGov survey for The Grocer suggested just 6% of shoppers bought products primarily because of ethics.
Even at Tony’s Chocolonely, the Dutch chocolate brand that’s become the poster child for purpose-led grocery brands, just 11% of customers buy the brand because of its purpose, says UK country manager Ben Greensmith, with the remaining 89% buying because they like the product or the brand.
“For the majority right now, the usual market economy wins,” says Leoni Sceti. “They might like to see a bit of purpose on the back label, but it’s not their primary reason for buying. But over time, the share of those who buy because of purpose and who want to see purpose on the front label will progressively increase.”
False sense of security
That’s why brands shouldn’t be lulled into a false sense of security by today’s sales figures. “The point of purpose is that it’s about the longevity of your business,” says Victoria Page, founder of VP Comms. “What will people expect from your brand in the future?”
“The point of purpose is that it’s about the longevity of your business”
Greensmith agrees. “I think there are still lots of successful, big brands out there that are very much focused on shareholder value,” he says. “At the moment companies can still get by, but most will need to have a higher purpose in tomorrow’s world. In a world that is moving towards more openness and more transparency, it is going to be harder for those businesses to hide the bad stuff they’re doing.”
Gauging the true value of purpose today is further complicated by the fact there’s lots of disagreement over what purpose means – and, therefore, which brands should be considered purpose-led. Attempts at defining purpose have a tendency towards extremes: the criteria are either so ambitious that only a handful of purpose-led challenger brands qualify (think Tony’s Chocolonely) or so vague that anyone who’s ever run a workshop on ‘finding your why’ fits the bill
“Purpose is notoriously difficult to define,” says James Morgon, MD for Europe at the Milken Institute. “No one yet has a complete definition of purpose, but in the broadest sense it’s companies doing good.”
Despite such definitional difficulties, many brands are clear in saying purpose already makes a measurable difference to their performance.
One such brand is Cadbury, which has grown sales by a whopping 6.6% over the past year. It says purpose-focused campaigns such as Dairy Milk’s ‘Donate Your Words’ in partnership with Age UK made a big contribution to its performance. “A strong brand purpose at the heart of Cadbury has laid the foundations for a successful year,” says Susan Nash, trade communications manager at Mondelez International. “All our marketing activity is consistently aligned with the brand’s DNA: bringing out the ‘open-heartedness and generosity’ inside us all, helping us connect and feel we belong.”
Warburtons, which increased sales by £21.4m (3.4%), also says purpose is a big part of its success. “Our family values are the drivers for how we behave,” says corporate and consumer affairs manager Tearmh Taylor. “We believe we must minimise our impact on the environment, while at the same time make a positive impact to the society we are part of. We are committed to building a business that positively contributes to our family and yours, both now and in the future.”
Others are reaping the rewards of using purpose as a tool to improve internal decision-making, as described by Ellett at KPMG. For example, Birds Eye (up 1.1%) defines its purpose as ‘helping the nation eat a little more goodness every day’, though it doesn’t communicate that to consumers at the moment. Instead, its purpose is used to guide strategic choices and investment decisions, says UK general manager Steve Challouma.
“It helps us decide which segments of the portfolio we back, what products we develop, what kinds of partnerships we make, which have all contributed to the modernisation and revitalisation of our brand,” he adds, citing investment in Steamfresh and the launch of meat-free range Green Cuisine as recent decisions informed by Birds Eye’s purpose.
It’s a similar story at Walkers. Its purpose to ‘inspire moments of enjoyment every day for everyone, one pack at a time’ underpins every decision that’s made without ever being communicated overtly, says Fernando Kahane, marketing director for Walkers Snacks at PepsiCo. “It simply guides how be behave and what we do, so there is commonality at every touchpoint with Walkers for consumers.”
With the coronavirus crisis putting brands’ behaviour in the spotlight as never before, the need for that guide on how to behave – that moral compass – is only going to increase.
Purpose may not be what separates winners from losers among Britain’s Biggest Brands this year, but it will only become more important in the coming weeks, months and years – and tomorrow’s winners are already working on making sure their purpose is aligned with everything they do.
How to dodge social media push-back
“Can I suggest before the marketers at Cadbury lecture consumers about ‘reawakening their generous spirit’, they have a word with their own finance team first and align things?”
So wrote marketing guru Mark Ritson in a LinkedIn post in March, which quickly garnered 270 comments and more than 3,700 likes.
The cause of Ritson’s ire was a purpose-driven Easter campaign, which encourages consumer generosity. Hypocritical in light of brand owner Mondelez’s well-publicised UK tax policy, argued Ritson.
Cadbury is, of course, far from the only fmcg brand to catch the occasional bit of heat on social media (and it points out it complies with “all applicable tax legislation as directed by HMRC and the government”). Yorkshire Tea suffered a Twitter pile-on earlier this year, after Chancellor Rishi Sunak photobombed the brand.
"You can’t release a tear-jerker ad celebrating gender equality if you haven’t got any women on your board"
As more brands take purposeful positions, the risk of a social media backlash is only going to increase – so how can they protect themselves?
It starts with avoiding silos, says Victoria Page, founder of VP Communications. “You can’t release a tear-jerker ad celebrating gender equality if you haven’t got any women on your board.”
Bringing in an outsider’s perspective is also critical, adds Eleanor O’Leary, founder of The Better Brand Consultant, arguing decision-makers need “experience and permission” to tackle certain issues.
In the end, push-back on social media simply shows that brands cannot talk about purpose without expecting a reply. “We know our campaigns must be backed by action,” says Susan Nash, trade communications manager at Cadbury owner Mondelez, highlighting Cadbury’s donations to Age UK and awareness-raising about loneliness among the elderly.
Page concludes: “What social has done is it’s empowered people to raise their voice. It’s not that brands weren’t doing this kind of stuff 20 years ago. It’s that consumers didn’t have a way to respond to it in a public forum – and now we do.”