Food Companies Pursue the Elusive Digital Dollar

Food and beverage companies are wrestling with what should be their role in e-commerce.

By Dave Fusaro, Editor in Chief

2 of 3 1 | 2 | 3 View on one page

Do you know of any brand success stories?

“Considering online [grocery shopping] is still newer to most consumers, purchasing grocery items online direct from a manufacturer is just in its infancy,” Gundelach concludes. “Based on that, I would say it is too early to call anyone a ‘success,’ but there is lots of promising experimenting happening with brands right now.”

Such as…

Coca-Cola Co.

Coca-Cola’s e-commerce strategy “entails working with retail and restaurant customers to find ways to sell more beverages in more buying occasions,” the company says. “It includes building e-commerce capabilities across the company and its network of bottling partners – from digital marketing to supply chain – to grow in today’s technology-driven omni-shopping landscape.”

A Coca-Cola report on the subject noted “six ways Coca-Cola is embracing the e-commerce revolution”:

  • Partnering with Amazon Echo and other smart speakers to attach its beverages to voice-activated orders.
  • Making Coca-Cola brands “pop” on the digital shelf. “For years, Coke has used in-store merchandising to drive impulse purchases as shoppers approach the beverage aisle. The company is applying the same creative rigor online by using high-resolution photos, inspirational copy and targeted marketing to inspire clicks.”
  • Capitalizing on the food delivery occasion – partnering with restaurant delivery services like Uber Eats and DoorDash to find ways to add beverages to food orders, and with meal-kit delivery service Chef’d to curate Coke beverages with menu items.
  • Click-and-collect: Tacking beverages onto online grocery orders.
  • Direct-to-consumer: “For the first time in Coke’s more than 100-year history, bottlers are delivering select brands [products like Tab, Fresca and Mexican Coke] directly to consumers’ homes via a pilot called eFulfillment.”
  • Building emerging brands: The company’s Venturing & Emerging Brands incubator is looking into how e-commerce can build smaller brands online.

Hershey

“For Hershey, search is the new shelf,” CEO Michele Buck was quoted in a European journal. In a presentation to financial analysts in August, she emphasized, “We know in this space we need to win in search. Winning in search is everything.”

Hershey Power of SearchSince her ascension to the top job early last year and the two recent acquisitions in salty snacks (Skinny Pop and Pirate’s Booty), e-commerce, and “search” in particular, has become a top goal of the former candy-only company.

“There’s no difference between digital and physical retail,” Hershey says on its website. “Digital and physical retail are complementary components of a total commerce approach.”

Straton, whom we cited earlier, told those same financial analysts to expect sales from e-commerce to account for “mid-single-digits in the next five years or so.”

Hershey created a 15-page PDF, apparently aimed at its retail partners, titled “The Power of Search in a Shopper’s World.” The report “boldly frames the word ‘search’ in the context of modern retail and gives you ideas on how to build an engaging total commerce ecosystem,” it explains.

“Building a search and engagement strategy with these four components is critical to creating an experience ecosystem that puts consumers front and center and wins in a total commerce world,” it says. The four components: content, connections, community and conversion. In the booklet, Hershey introduces a nine-member digital team that names Straton first and includes Todd Tillemans, Hershey’s U.S. president.

Among the booklet’s aphorisms: “Digital is the first shelf and search is the new strike zone” – attributed to Straton. And “Community results when the stage is set for shoppers to create shareable moments that support their narratives. In these moments, the shoppers – not the stories or the products – become the heroes” – attributed to Suzanne Jones, vice president of The Hershey Experience (whatever that is – we searched for that term on Hershey’s website but couldn’t find it).

General Mills

Big G says its e-commerce business grew 50 percent in fiscal 2018 (which ended May 27), and growth is expected to continue into fiscal 2019. Now, a lot of that bump came with the addition of Blue Buffalo, which sold a lot of pet food online. Nevertheless, General Mills expects to generate $1 billion in sales from e-commerce by fiscal 2020.

General Mills tested geo-targeting technology for Haagen-Dazs ice cream delivery last month in London, using Facebook Messenger to allow customers to place an order while tracking their locations via mobile browser. “When orders are being prepared for delivery, product is placed in portable freezer bags for the delivery teams to take to the consumer, ensuring the ice cream arrives at its best,” Samuel Horner, Haagen-Dazs U.K. senior brand manager, told a European journal.

Danone North America

The Vega brand of athlete-quality bars was acquired along with last year’s purchase of WhiteWave Foods. The company reports it’s doing some direct-to-consumer e-commerce with that brand and looking at the results to consider doing direct sales for other products.

“The question for us at this point is how to best organize our selling and marketing teams to do so, and that is a work in progress,” says a source at the company.

2 of 3 1 | 2 | 3 View on one page
Show Comments
Hide Comments

Join the discussion

We welcome your thoughtful comments.
All comments will display your user name.

Want to participate in the discussion?

Register for free

Log in for complete access.

Comments

No one has commented on this page yet.

RSS feed for comments on this page | RSS feed for all comments