Marketing Strategy projects can sometimes be seen as “Big Food” territory. Smaller companies with limited budgets often prefer to focus on tactical elements of their marketing (package design, social media, in-store elements) that seem like tangible ways to increase sales immediately. But while Strategy work may sometimes feel extraneous, it can be exactly what a brand of any size needs to ultimately deliver explosive growth.
As a case (study) in point, I will enumerate five ways that spending the time and effort on Marketing Strategy helped our local brand, Sara’s Tipsy Pies, double sales in one year.
- Situation Analysis Key Learning: Turnaround Situation
A new brand launch, a successful and growing business that wants to take it to the next level, or a declining brand that needs a turnaround are all different situations that may call for different types and depth of research and analysis work. When I joined Tipsy Pies as an equity partner and company officer in December of 2016, the overall business of Tipsy Pies was healthy but without any turns data we didn’t really know how the Retail business (packaged goods being sold in Grocery stores) was going. Talking to many people at the Distributor, Retail Buyer, Store and Aisle Manager and even Stockperson levels helped us to paint a qualitative picture. Then we got quantitative and started to read turns data on store shelf tags, and the picture wasn’t great. Tipsy Pies SKUs were turning in the bottom half of the frozen desserts category and it was clear that a turnaround was needed to keep the Retail business alive and growing.
Tipsy Pies, 2016-17
- Competitive Analysis Key Learning: Overpriced
An analysis of competitive pricing in the Frozen Desserts category revealed that Tipsy Pies was charging about four times as much per ounce as Sara Lee and Marie Calendar, the national competition. Tipsy Pies are a specialty, premium food item made with high quality ingredients so some price premium is expected. The analogy we used was Haagen Dazs and the price premium that premium brand drives versus mid-tier brands like Kemps and Edy’s. It turns out that Haagen Dazs is about 2.5 times more expensive per ounce than mid-tier brands, so we felt that we needed to get Tipsy Pies price per ounce premium down in that range as well.
- Cost Analysis Key Learning: Very Healthy Margins (Too Healthy?)
Taking a deep dive into costs and margins at the SKU level revealed that 3 of 4 Tipsy Pies products had relatively high margins, in fact they were unusually high for a small brand in the packaged food industry. This suggested that we had room to either reduce our price, or up-size our pies (and increase COGS) in order to provide a better value to the consumer. When reducing price there is always a risk that Retailers won’t reduce their price at the shelf, but rather just pocket the difference as increased margin. Therefore we chose to up-size the pies by nearly 50% because we would be assured of that added value getting through to the consumer. Consumers had also told us they wished the pies were a bit bigger, either to share with one other person or to get a few more bites when eating by themselves. Up-sizing was the right move, for both trade and consumer reasons.
- Flavor Segmentation Key Learning: Over-Apple’d
Tipsy Pies had a Salted Caramel Apple and an Irish Apple flavor, both of which were similar in flavor profile and in the same ‘Apple’ segment of the pie category. We were potentially splitting turns in that segment, while we were leaving the ‘Berry’ segment untouched. Meanwhile, Tipsy Pies best selling pie flavor at the Minnesota State Fair was ‘Boozy Blueberry Lemon’. We decided to eliminate our Irish Apple flavor and bring Blueberry Lemon to Retail. It worked on both fronts as turns of the remaining Apple SKU improved and Blueberry Lemon has been Tipsy Pies best-selling flavor!
- Brand Personality Key Learning: Move to Entertainer Archetype
With branding it’s not just important what you are saying, it’s almost equally as important to define how you are saying it. I’ll never forget when I asked our Founder, Sara Hayden, about the personality of Tipsy Pies. She summed it up perfectly when she said, “when I look at the packaging now I just see a grandmotherly pie lady. But I don’t want to be that kind of pie lady, I want to be the young and fun pie lady!” I like to use Brand Archetypes as a way to help define brand personality, and we decided what we were doing was going from a ‘Caregiver’ archetype to an ‘Entertainer’ archetype. We communicated that emphasis to our design agency, Red Lime, and hopefully you can see that they nailed the transition in the package design photo above.
Result: Doubled Volume, Dramatic Turns Improvement
We relaunched the Tipsy Pies brand on September of 2017 with our best effort to reflect this new Brand Strategy. In the next 12 months we doubled our sales volume on about 20% distribution growth, meaning that the majority of our growth came from same-store turns. Tipsy Pies went from having four SKUs in the bottom third of the frozen pies category to four SKUs in the top half of the category and two in the top quartile on a turns basis (Source: Store Shelf Tag Data)
The Tipsy Pies turnaround would never have happened had we not taken the time to dive deep into Strategy work. Once we had our Strategy together it made all the rest of our decision making very easy, and it made for better communication to Retailers as well. We were able to show them that we knew there was an issue, we had done our homework on how to solve it, and we were responding accordingly. That bought us time with the stores because they knew we were in the process of comprehensively changing things for the better, not just throwing some tactical things at the wall to see what sticks. We were able to avoid imminent Discontinuation and get the business back on firm footing.
Now that Tipsy Pies has a solid foundation and performance to build on, we are looking forward to launching new innovation and expanding our distribution geographically. All fun and happy things that would never have been possible without spending the time on Marketing Strategy.