Industry News

Trend vs. Fad: Food marketers should think more like venture capitalists

New report recommends using entrepreneurial markers to launch

Food marketers often fixate on whether certain consumer behaviors represent long-term trends or passing fads: This is with good reason, since understanding when to invest in signals from the marketplace can spell the difference between success and expensive failure. The fixation on distinguishing between trend or fad derives from what in our experience are two major causes: a) the packaged food industry’s very high failure rate in product innovation (which has created a deep, unconscious concern with over-investing in any short-term play) and b) the slow-speed-to-market averages in CPG new product development, which make the risk of arriving at the shelf just as a fad is fading into obscurity (or into a niche opportunity) terrifying for managers.

Because of their failure rate with new products and slow-to-market processes, food companies fear jumping aboard short-term phenomena ("fads") too late — ironically, making them overly cautious and typically causing them to miss major opportunities. In The Hartman Group’s latest Hartbeat Exec report, “Trend or Fad?,” we describe results from a representative search of hundreds of innovations in the packaged food industry over the past three decades. We find that the food industry does not have a track record of getting involved in fads — in part because of a fixation on forecasting and “predicting.” The report helps distinguish between trends and fads, and suggests food marketers let go of forecasting and think more like venture capitalists.

We find that marketers often use the word “fad” pejoratively, with no clear definition. In this report we defined fad as an innovation with one to five years of rapid growth followed by a rapid decline. Fads tend to be lower-order innovations, such as flavor, format, and nutritional and ingredient plays, and they sometimes recycle. Trends, by contrast, are demand-led market forces that drive sales growth for a decade or more.

With these and a host of other markers, The Hartman Group’s research finds that:

  • Trends can spawn category-level fads. For example, some companies are pushing gluten-free and protein into their categories. Sometimes such tactics work; other times they overreach, and how well they worked often determines whether the marketer considers a phenomenon to be a fad or a trend.
  • Trends can accelerate suddenly. From 2011 to 2012, there was an almost 50% spike in retail bacon sales following several years of intense bacon love among urban restaurateurs. It might appear to be a fad, but the strength and length make it a trend.
  • There are steady-burn and long-arc trends. Steady-burn trends last decades and are often recession-proof — for example, natural and organic. Long-arc trends eventually peak and slowly decline — for example, fat-free, which has given way now that food culture has shifted to bringing fat back in vogue.

Marketers should understand that in today’s consumer-led era, change that eventually reshapes categories and whole markets happens when small-scale micro-innovations, the raw noise of innovation, spread through the market through the effect of key cultural influencers (people, products and institutions in the food marketplace). There is a finite number of high-level demand spaces that trends (and fads) can connect to in order to propel themselves forward and to which marketers have to connect in order to truly generate strong trial and repeat performance.

Forecasting which trajectory a leading-edge innovation will take is especially tricky and not recommended. In order to capitalize on trends and fads, marketers should instead begin to let go of forecasting and predicting and think more like venture capitalists. This is much more important in the end than worrying about whether a growing ‘trend’ is a fad or not.

Obtain a free copy of "Trend or Fad?" at: www.hartmanstrategy.com/hartbeat-exec

As CEO, Laurie Demeritt provides strategic and operational leadership for The Hartman Group’s research and consulting teams. The Hartman Group is recognized for its ability to blend qualitative, quantitative and trends research to help clients develop successful marketing strategies. Its analysts understand the subtle complexities of how consumers live, shop and eat, and how to apply that understanding in ways that lead to purchase. For more information about The Hartman Group, visit www.hartman-group.com or contact Blaine Becker, Senior Director of Marketing at: blaine@hartman-group.com.

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