Welcome to the e-commerce marketing podcast, everyone. I am your host, Arlen Robinson. And today we have a very special guest, Dr. James Richardson, who is the founder of Premium Growth Solutions, a strategic planning consultancy for early-stage consumer-packaged goods brands. As a professionally trained cultural anthropologist turned business strategist, he has helped more than 75 CPG brands with their strategic planning, including brands owned by Coca-Cola Venturing, General Mills, Once Upon a Farm, Mother Kombucha, and many others.
Thanks for having me, Arlen. Great to be here. Yes, yeah.
Not a problem. And you know, I’m really excited to talk to you today because we oftentimes are dealing with a variety of different e-commerce marketing solutions. But I know a lot of our listeners are selling consumer goods, consumer packaged goods, rather. And so I think we’re going to kind of dig right into that. And you’re going to provide some great strategies for growing these types of brands, because that really is your bread and butter. But before we get into all of that, why don’t you tell us a little bit more about your background and specifically how you got into what you’re doing today.
All right. Well, the short version is that I in the 1990s, I was in a doctoral program in Wisconsin. I was training to become an anthropologist and I and I did OK, OK. I did my fieldwork in southern India. And in the last three years of the 90s, I missed most of Clinton’s second term and I missed all the fun I get to read about Monica in Tamil God. But so I learn Tamil.
I did my dissertation fieldwork. It was a great life changing experience, but it ended up not being a career, the academic career that is an anthropology that I was going to be able to continue for a lot of personal reasons not unrelated to the oversupply of doctoral candidates and very poor networking, which was a major life learning for me.
Although honestly, I’m so glad I left, I think that field would have killed me had I stayed in it. But the research was fascinating and so my passion for the research had not waned at all. And so I went into market research and I didn’t know what market research was, didn’t know the corporate market research was about. And I had to find a company that was deliberately trying to hire anthropologists to do highly complicated, in-depth interviewing, store research and nuanced analysis of natural organic food buyers.
So I joined that company and they were this was like 2003. And so they were at the cutting edge of the natural organic food beverage trend and had were regularly producing sort of canned syndicated reports, but also a lot of customer research for big companies like Unilever, Pepsi, Coca-Cola, those are our clients. But the first client I had was Whole Foods. It was really interesting because we I spent an inordinate amount of my personal time before I was married, just living at a hotel rooms and studying Whole Foods shoppers, talking to them in their home, studying their pantries.
So we were doing pretty invasive research that anthropologists were comfortable with it because, I mean, what I did in my for my dissertation was a thousand times more invasive. Right.
So where we have an aptitude for most people, just really they can’t handle, like poking around in people’s pantries and not freaking out and thinking that’s normal doesn’t come naturally.
It’s a professional skill and you have to make people comfortable with it. Like you have to crack jokes, people comfortable.
And as you root through there, yeah, I could imagine I mean, this definitely has got to have you have to develop a rapport before you start digging in people’s faces. Yes. Well, I mean, yeah.
And that’s a skill set that I developed in India, in the field cross culturally. And then I developed an American version of the Whole Foods. Consumers are actually great because they’re super, super paranoid, highly educated, neurotic, paranoid. Right, right, right. Well, so, like, if you can get in their house and like, develop rapport and half an hour, you have skills to guide you and their acting skills are aligned.
But anyway, so I but I took market research as far as I could after about five years and I, I got tired of.
You know, people with my kind of background where we have a a craving for learning that’s a bit abnormal and and so I was getting bored by intellectually literally falling asleep at my desk. So I had to find a new challenge. And I found that new challenge working with executives in business, which I didn’t see coming. I was kind of forced into it, actually, by the founder of our company because he thought I had some aptitude to interact with these folks.
And so I got into strategy consulting, strategic planning for big food beverage brands that were slowing down or suffering or wanted to launch a brand extension, but didn’t know what would be on trend and how to figure that out and how to connect with consumers. So I became morphed into this. I was a behavior expert in CBG and then I morphed into a business strategist how to grow large businesses once again.
What led to the book specifically?
That, you know, is why I’m sort of talking to you was the last five years of that consulting career. So that’s quite a journey.
You’ve had quite a shift. You really wanted to be in. The kind of consumer packaged goods feel coming from cultural anthropology is not something that you would kind of think somebody would it would take that path. But you definitely did. And like you said, even though they’re kind of worlds apart, there is a large part of that. The skill set that you had, being able to ask a lot of questions of total strangers and do research and develop a rapport.
You said there’s definitely things that have helped you through what you’re doing today. So that’s yeah. That’s awesome that you’re been able to kind of to keep those tools in your toolbox, so to speak, and apply it to your day to day.
Yeah, I think there’s a critical thinking tool shed that comes from social science that I use every day. What I don’t use is the geeking out theoretical hairsplitting. I said, yeah, I guess that’s a whole nother ball of wax. I guess so. As far as brands that are out there, whether they are a startup e commerce brand or their existing brand, the bottom line is today it’s we’re in a huge, super competitive space. The whole situation we’re in right now as far as e-commerce and the the numbers have only been exacerbated because of the covid-19 shutdowns and how everything has really just been shifted overnight onto online, where people are relying so much more heavily on online sales.
And so what typically do you see has been the primary problem with trying to grow a new consumer brand just too quickly? Because I think a lot of brands just get out there and run, hit the gate, flood all channels with all of these marketing channels with their ads and things, and just hit the ground running a million miles an hour. What’s the problem with doing that?
So I think the biggest problem in consumer packaged goods, which I declare to be sort of an oversupplied market, in other words, is more choices than you actually need the average consumer at almost all levels of quality. So it’s like the epitome of oversaturated, hyper competitive. The problem that that creates when you go too fast in that situation is that you have to get people going fast, Arlynn, or they think their products are done and they’re almost always wrong.
They think that the packaged symbolism is perfect, that the sensory profiles perfect, that yada, yada, yada, is all good. And the reason for that is that in in my field, in my industry, product development takes two to three years before you even start shipping physical goods to anybody. And so it’s a long journey. And so you basically have this enormous sonke, you know, psychologists call the sunk cost theory of cognitive bias where you just you really desperately want to believe that it’s done, don’t you?
I mean, you’re like shipping ten thousand cases, so you had to be done.
It’s just not done until tens of thousands of people have consumed it. And you’ve gotten some glimmer of feedback from them. You have no clue. That’s the biggest problem is the false belief that you’re finished with a product. And this is where my background has help people who tend to hire me. They’re the ones with really thorny marketing problems and those are symbolic positioning problems. And those are also actually physical like widget design problems, like what kind of food am I selling and why?
And that’s a cultural issue. You are feeding someone, the food becomes their body, literally their cellular matter. And you talk to any anthropologist, regardless of what they know, anything about business or my industry. And they’ll tell you the same thing, which is that food, because you eat, it goes in your body. It is central to multiple social identities that you hold dear, most of which you don’t even think about. There’s so powerful that are embedded in your unconscious.
In other words, your brain is decided. We’re not going to make. About that anymore, we know what that is. Those are the values. Those are the identities that are the most powerful in our lives, the ones we don’t consciously think about because they’re quietly driving massive amounts of behavioral decision making without us being aware of it. So social class, gender, age, to some extent, those are just against race and ethnicity, too. Those are all huge identities that are operating underneath the layer of the surface layer of consciousness.
People with my background are experts in decoding what is driving what in that unconscious world, because those are shared systems of meaning and symbols and stuff. So, for example, if you’re going to use I’ll use an extreme example.
If you’re going to use messaging or attributes in your widget and you are not aware that you live in an upper middle class like WASP bubble of people who are like geeks out on nutrition and you only hang out with those people, you’re going to put stuff on your package that’s going to reflect a whole bunch of identities and assumptions that you’re not even examining. It might work for like a geeky nutritional supplement because, like, the people who spend a lot happened to fit that profile.
But what if you’re doing like skinny pop, which is really not when it launched? It’s not very innovative at all, really. It’s like a classic mass market innovation. You don’t want to have a package that literally only talks to people at Whole Foods where it launched and it didn’t. It talks to a much broader audience. And that’s because they didn’t project the founders of Skinny Hope didn’t project their own narrow view of the universe from their social world onto the messaging and everything else.
And it’s very easy to do when you’re not a professional marketer.
Professionals are taught to at least check their assumptions and product development. They maybe do some research and stuff like that. My clients, they’re already in the market, so they need to they need to leverage their consumers to figure out, well, am I connecting with people? And oftentimes what I find is they’re talking to themselves. And that is never, never in my industry, not usually doesn’t usually end well, if that’s all you’re doing, because you end up burying yourself in a market niche that’s not scalable, you have to learn how to talk to a broader audience of people.
I mean, you would appreciate this, I think, Arlen, but it’s like whenever you’re crossing boundaries of especially cultural boundaries or ethnic boundaries, that’s a cross cultural conversation, whether you’re speaking English and sitting in Orlando. So if you’re not aware that that’s happening, you’re going to handle the conversation differently.
Yes, definitely badly.
So the problem I think a lot of the business owners have and I think it really kind of comes down to the fact that some of these brands are so kind of caught up in the fact that they’ve birthed something. It’s the classic syndrome where nobody thinks their baby is ugly. You know, the child is the most attractive, the most beautiful child of the world. But that is certainly the case, you know, because, you know, of course, beauty is that of the whole.
Everybody has a different perspective.
And so it’s worse than that. Ireland. See, this is where I slip into the crass social science perspective, and that’s why we’re dangerous people, is that beauty is actually totally objective and measurable for one. I mean, this has been proven. You can do psych experiments at scale and you can I mean, there’s a way to mathematically define like a face that’s beautiful and one that’s not in the one that’s really ugly. But that’s the crass reality of the way our brains work some of its culture.
I agree. But even when it’s cultural, you can measure that. So like you can actually measure whether or not your product is basically a total disaster or partially done. And that’s what I help train my clients to do before they work with me, hopefully, because then they’ll appreciate what we do. You have to develop that professional skepticism, I think. And that is obviously not what a mother worries about pushing her baby around in a stroller.
I think most brands over all these brands, they all want to get to the point where they have just exponential growth, where there’s growth on top of growth, and that continues year over year. That’s, I think, what everyone is striving for. So it’s kind of a buzz term. You hear all the time when dealing with marketing, with associated with consumer brands. What’s so special about this exponential growth? Why is it a big deal? There’s a couple of things.
One is that, generally speaking, if you cannot obtain it based purely largely on consumer growing consumer demand, whether online or in-store, both, it’s the first powerful signal that you have actually either stumbled upon or ingeniously created a truly innovative product in your respective category in an oversupplied market. People have very little incentive to change from their current roster of brands in any category that, like no one, said. So if you have something innovative enough and compelling enough, seductive in some cases enough to get them to switch to you and to have more and more people doing.
In other words, the acceleration of interested people is also happening. You have a magic design. That’s the first piece of magic that you have to get together. And that’s why I say you can’t launch thinking you’re done because you want to fine tune your thing. So you generate that effect and that could take five years. I’ve seen it take that long because you’ve got to give it time to soak in the market, get data, do research with your consumers, learn, optimize, tweak.
And it’s been done multiple times. I mean, I think that the problem with even some of the examples in my book is that they went out of the gate and they won almost too quickly, whereas there’s many exponential growth brands and consumer packaged goods that they literally spun their wheels and fiddled around for five, seven years before they took off. Now, everyone’s forgotten that part of the history, right?
Right. And so by doubling your business of a small base, Arlynn, you’re able to buy some time in the business where the scale and the operational scale is small enough that you can actually learn and listen and iterate. If you’re going out too fast. You’re now focused 100 percent on just operating and shipping or not learning and listening to the market. So that’s one thing.
The other thing is that by growing fast but off a very small base, you will sneak up on the incumbents because they’re going to disregard you as someone you’re just some annoying startup who’s never going to go anywhere. Right. The smart people in the industry that I used to consult for, they have access to big data sets that would allow them to say no. The startup mathematically is very different from the others. We better keep an eye on them. But the average person out there is just going to look at whatever.
That’s a great advantage because you want to be able to sneak up on people in an oversupplied industry.
If this is the problem. I have a lot of people go out in the media and they’re like getting Entrepreneur magazine in there, like they’ll hire a PR agency who will unfortunately get them into Inc magazine prematurely. And I always groan when I see that. And it’s like all this is doing is a now. This is like a really dumb way to announce your availability to retailers, because what you’re doing is announcing yourself to the entire known universe of potential investors, financiers, serial entrepreneurs and everyone who could come out in three months and rip you off in an oversupplied market.
You don’t prematurely declare victory one like with an article in ink because you’re just announcing yourself to people who are better positioned.
It’s a brutally hierarchical industry, unlike Web apps, which I could launch from my desk here, you know, I mean, there’s no ecosystem that can stop me.
But in my industry, there’s an old boys network. Still, it’s largely in control of all the major things like the shelving. And they’re happy to take your little startup idea and rip it off. Now, I think about that because I’m a huge fan of the show Shark Tank and I see these companies that come on there.
And I wonder that same question is that, like you said, a show like that that has a platform like that, a brand kind of coming out, announcing themselves to the world, you’ve got to wonder what their motives are there.
I know what they are, their motives, their PR. The problem is that the people who do well in my industry, they don’t need to go on Shark Tank to raise money because those deals are horribly talks of deals, any investment. Second, the only reason to go get PR is to raise money at that small scale. You will get a spike in sales like people who sell online or QVC or something like that.
They’ll get a huge spike off Shark Tank. I’ve seen it multiple client case studies that with people I’ve worked with, they’ll get a massive spike.
I had a client this summer who literally maxed out production and actually had to go. They basically had their day to see business shut down for two months. They couldn’t ship to the subscribers because the Shark Tank thing took off to a wall. So that’s like not good. And in their case, they were like a third mover. So it made sense to get PR because they needed to they needed to chase like people who are ahead of them.
But generally speaking, like it’s a bad idea because the people who watch Shark Tank, aside from weirdos like me, know it’s all private equity. People are it’s all people who are totally set up to rip off your idea.
I see. So really, I mean, the purpose would be get on there. Like you said, it’s a PR move, but you have to be mindful of the fact that you’re announcing everything to the world and people are playing. You’re showing your cards at the poker table. Yeah. Yeah. It’s not how you play poker.
I am a New Englanders and a little more paranoid than most, but I’m very much a proponent of being cagey in the beginning.
Yeah, that is true, especially in a hyper competitive market where people have access to so much now and to spin up ideas, rip them off, it doesn’t take much to do it. So yeah, I understand the paranoia.
Yeah, the barriers have come down to launching a food or beverage and so it’s easier to rip people off. And I see it all the time and I wish people would just focus less on shortcuts, which is what Shark Tank appears to be, and focus more on building the business authentically. Because if you have if you just focus on iterating and generating consumer passion, in every case I studied, that generally drives 80 percent of the growth.
Yeah, that’s really what it comes down to. Yeah. And then the other 20, 30 percent are the tactical playbook and everything else, which is important to get right. But it’s generally not the decisive factor. Or let me put it this way. You need more tactical brilliance with your marketing playbook if your thing is dull and on innovative.
For ten years in my old office, I had a sign and it’s a quote from the first guy to write a word of mouth marketing book, and I forget his name. I’m embarrassed. But anyways, and it’s a little quote from the book in a cartoon form and it says, you know, advertising is the cost of being boring. And I’ve seen it.
I like skinny pop spent nothing on marketing. They’d like no marketing expense at all. They went a hundred million dollars in four and a half years because the product was perfectly timed and designed to fill a burning gap. All right. That’s what they always say.
Those true brands that explode, they sell themselves so that they don’t require a whole lot of.
Yeah, and most people aren’t in that situation. Yes. So are the folks that work with you and work with me. Right. They need a little more tweaking and they need a nudge. But there’s no point. I mean, I the best agency people that I work with and refer clients to that they’ve seen it and their own roster, which is that the ones that are using the same techniques are the ones that outperform are the ones who had a truly compelling product with rabid fans.
And they were first to scale. So they didn’t have too much comment for that innovation. Yeah, yeah, that makes sense. But that’s kind of rare these days to wrap things up. You say in your book that weird just doesn’t sell so so it can weird. Eventually become cool. And, you know, are consumers really ready to try new brands, especially during this global pandemic. So weird can become cool, but, you know, there’s some limits on that.
That’s a symbolic transformation that fascinates me as an anthropologist. But it’s also the biggest thorny unsolved problem methodologically in marketing of consumer packaged goods is how do you take how do you deconstruct why kale chips has failed to scale, why no one drinks leaders of apple juice despite all the health properties, despite like 20 brands trying for 20 years to scale it, none of whom you’ve heard of because they’ve all failed. And whereas Greek yogurt takes off very quickly. So I’ve spent years deconstructing some of the rules behind product design.
That and some of them are in the book that explain how how something could be rare but doesn’t come off as a weird, weird. I pick that word because it’s pejorative. Right? You say something that’s weird is a negative state, so it’s an alienated, negative state of being. So if the product’s weird and there’s something symbolism is off-putting or maybe the flavors, the flavors seem weird or inscrutable. This happens a lot in food and beverage innovation as people get way to get out and do something really obscure and all they have is this widget full of weirdness.
It tastes weird. It feels weird going down the throat. And the symbolism doesn’t make a lot of sense to anything but a tiny group of people.
So one thing I do help some clients with is that transition from weird to cool, but I only actually don’t work with them if I know it’s hopeless. And sometimes, like, I’ll just say we’re not a good fit. I, I do that quite frequently.
In most cases. If a brand is in that category where they’re super weird, like you said, they kind of get out on doing something totally exotic most of the time. It’s hard to overcome that.
I guess it’s hard in the near term. And so I don’t want to charge my fees for people who aren’t. Or it might take five to seven years for the society to catch up with what they are doing. Most people don’t want to pay five figure fees and be told that, but it happens. I mean, Greek yogurt was absolutely weird before Chobani appeared.
It just happened that it had only been sold to weirdos like me who buy food at Whole Foods.
We weren’t the audience that was going to really understand the the actual potential.
So when Hamdi sold it at Shoprite in upper New York State to totally middle class, unsophisticated folks with not too much education, they discovered something that no one else had discovered because people like me looked at Greek yogurt and said, oh, Greece, yeah, I’m going to go there someday.
I’m going to rent an Airbnb because we’re snobs. We start going to like ethnic yogurt. But that wasn’t the frame that scales it. The frame that scaled it was wait a minute, this is super high in protein. If I have a cup of this, I’m done with breakfast. Like, I don’t even have to eat cereal.
The power of the innovation was actually much more mundane. And that’s what he figured out because he just got it in front of the right audience.
Not you got to. Yeah. And so he figured it out. But the issue with that is just a matter of time. And so brands can do it, they can do the transition, but they have to have the funds and the resources to keep things going while either they figure it out or the market figures it out of the action and ciggie.
Yeah, in the book I talk about CIG’s and that was the classic example of a brand that had a really long ramp up.
They were just too far ahead of the market. They just wildly too far ahead. People didn’t want to have, like European soccer style yogurt, it just wasn’t just it was disgusting. But eventually people got so interested in sugar in their diet that, you know, it became cool. It was no longer sour and weird. It was cool and not too sweet.
The market. Yeah, it caught up with it. That makes sense. And I can see that trend happening in a lot of, you know, a lot of different industries and. Yeah, as a matter of time. Well, that’s what’s awesome. James, I definitely appreciate you coming on to the e-commerce marketing podcast. I’ve definitely learned a lot. And as we see, there’s it’s quite an interesting space that we’re in right now. It’s definitely doable to grow a consumer packaged goods brand these days, but you definitely have to keep your ducks in order and see where you’re coming up against.
But the key thing, and I think that you have imparted is that you’ve got to do your research before anything and really make sure you’re going into the right markets. You’re exposing yourself to the right channels. And before you start investing the big bucks, I think that’s the kind of the bottom line.
You know, one of the things I always like to do to close things up, just to switch gears here, just so our audience can get to know you a little bit better if you don’t mind sharing one closing fun fact that you think our audience would be interested to know about you.
I’m a mountain bike ride a couple of times a week here in Arizona. OK, awesome.
Awesome mountain bike as well cross-country here in Orlando, Florida. I love doing it.
A lot of trails where I live. I’m kind of right outside of Orlando, some kind of o’carroll, a rural suburban area. And people don’t really realize how there’s another aspect of Florida that you don’t really think about. But yeah, there’s a lot of trails, a lot of scenic trees, forest areas. So, yeah, there’s a lot to offer. So I know you can experience the same type of thing is kind of different climate, of course, in Arizona, but you can really explore things pretty good on a mountain bike for sure.
Were great. Well thank you for sharing that. I appreciate it. And lastly, before I let you go, if any of our listeners want to get in touch with you and pick your brain any more about, you know, growing their own brands, what is the best way for them to get in contact with you?
I would encourage them to go to my site, Premium Growth Solutions dot com. And if that’s too much of a mouthful, they can type Dr. James Richardson into Google my is pretty good and go to the founder’s resources page. And there’s lots of stuff. There’s free webinars, tons of content.
I put out that I archive there. I would have folks start their first if they haven’t after they bought my book, of course. Gotcha. Gotcha. Well, that’s awesome.
Well, I definitely encourage people to check out your site, check out your book and, you know, just dig deep into that, because I know you have a lot to offer. And thank you once again, gentlemen, for joining us today on the e-commerce marketing podcast.
Awesome. Thank you.
Thank you for listening to the e-commerce marketing podcast.
Founder of Premium Growth Solutions