Challenger brands, which set themselves apart with an intent to bring change to an industry, are driving massive change across the fast-moving consumer goods (FMCG) industry. From 2008 to 2018, more than 4,000 small consumer goods companies received $9.8 billion of venture capital funding, changing dynamics in categories as diverse as deodorant, protein bars and pet food. At the same time, in order to grow their sales these brands are bridging the gap between selling exclusively online and building an in-store presence.
Many of these nimble brands began online, offering their niche products directly to passionate consumers. But a few years into this phenomenon, many challenger brands are beginning to expand into brick-and-mortar retail. And retailers are eager to welcome them, as they themselves are transitioning to be expert curators of differentiated brands that appeal to their unique shoppers. This transition has the potential to be a win-win for everyone, but it must be managed carefully. Packaging and merchandising displays play a critical role.