t’s start by talking about everyone’s favourite animal. Yep, the Green Anole Lizard.
They are a common species of lizard. Native to Florida and South Eastern USA. About 5-8 inches in length. Typically found on the lower branches and trunks of trees. You probably knew all that, right?
But what you might not know is that they are one of the fastest evolving species.
They evolved because they had to. Their cousins – Brown Anole Lizards – moved in. The Brown Anole Lizard lives on the ground or in low vegetation. And they like to prey on their smaller cousins.
In response the Green Anoles had to do something. So, they did. They abandoned their homes in the lower branches and moved to the treetops. Up there, the branches are thinner and smoother so the Green Anoles bodies had to adapt.
To better cling to the smaller branches, their toepads grew bigger and their scales got stickier. This happened in just 15 years over about 20 generations. If humans were evolving as fast as the Green Anoles, the height of the average American would increase from about 5ft 9 today to 6ft 4 within 20 generations.
As Darwin said “it is not the strongest of the species that survives. It is the one that is most adaptable to change”.
Green Anoles adapted. Quickly.
Why are we talking about this? The landscapes of many categories have changed a lot in recent years. Take Cereals. The category used to be pretty simple. You were sold in a rectangular cardboard box. You competed against other cereals in rectangular cardboard boxes.
Now, it is pretty complex. You are competing against bags of granola, porridge pots, breakfast biscuits and drinks. You are operating in a very different landscape with different rules of engagement.
A lot of categories have been on this journey. From traditional parts of the category (e.g. black tea, sliced bread, potato crisps) sold in a traditional way. Toward more modern parts of the category (cold tea & infusions, wraps, thins & pittas, vegetable based snacks) sold in a more modern way.
Many brands have been living quite comfortably in the traditional parts of the category. The low branches. But like the Green Anole lizard they need to adapt. They need to be able to move to the more modern parts of the category. The higher branches.
So, how can you do this? How do you develop a future fit portfolio?
Broaden Your View. First, you need to ask yourself “what type of category are we in?” It sounds a simple question. But how you answer it can make a big difference to how you view the world. For instance, if you think you are in the bread category you will spend most of your time thinking about bread. That limits you. In contrast, if you think you are in the wider baked goods category, you start thinking about bagels, wraps, pittas, thins, pockets etc. Warburtons are a good example of a company that has broadened their view.
You can take this a step further, by asking “what type of company are we?” For instance, if you think you are a carbonated soft drinks company you are going to sell…carbonated soft drinks. Your innovation pipeline will be…carbonated soft drinks. Coca Cola are a great example of a company who think broader. They see themselves as a drinks company. So, they have built a portfolio of drinks not carbonated soft drinks.
Drive the New. Identify the future opportunities in your (broad!) view of your category & portfolio. There are different ways of doing this. Let’s just talk about one. It’s a simple re-frame. Often companies look at where their products are currently used. Then look for adjacent opportunities from there. If you were a biscuit, can you be used in more complementary hot drink occasions?
The re-frame is to look at where you are NOT being used. So, if you were a biscuit, where are you not being used? By thinking in that way you end up with Breakfast Biscuits. Belvita launches. Others follow. You end up with a new subcategory and a big incremental opportunity.
Protect the Old. The traditional part of a category is still important. A lot of people drink black tea or eat regular potato crisps. You protect the old by focusing. This means being better where it matters. Having an advantage on the products that most people buy. The M&S “Best Ever” campaign is a great example of this. Be better on the prawn sandwich. Don’t perfect the goat’s cheese one.
It means focusing on a tight portfolio of products. Don’t have 10 variants when you could have 5. Don’t launch 5 new SKUs when you could launch 3. It means backing winning products. Maximising the distribution, availability and visibility of leading SKUs. Spend your time driving the stuff that sells not trying to keep hold of the stuff that doesn’t. As space rebalances from the old to the new, make sure you are using that space wisely.
The old normal = there was one part of a category. The new normal = there are two parts to many categories. Volume is still in the old. But growth is in the new.
To compete you need to be future fit.
The Green Anole lizard of your category.
Feel free to forward. Have a great weekend. Speak to you in a fortnight.
We are an FMCG strategy consultancy. We help companies win with shoppers & retailers in 4 main ways – Category Strategy, Channel Strategy, Shopper Marketing Strategy and Retailer Engagement.