The Hyper-Unit Growth Playbook

by Editor | Nov 8, 2024

The Hyper-Unit Growth Playbook

Rise of Unit Performance

In today’s inflationary environment, dollar growth is no longer king, with brands increasing price to keep up with costs. Instead, Unit Growth reigns supreme today.

Manufacturers care more about unit economics than ever before, equity research analysts are tracking it and, most importantly, leading retailers are now using unit growth and velocities to inform assortment, promotion and category decisions. Unit growth has become a leading indicator for brands that seek durable, resilient growth, beyond their revenue management playbook.

Hyper-Unit Growth Brands

To understand how brands are driving unit growth, we identified the brands that are exploding with double-digit unit growth and represent a significant business (>$150Mil in Revenue).

We narrowed our list to what we’re calling our Top 10 Hyper-Unit Growth Brands that are representative across categories, tenure and company types. We analyzed these brands to understand HOW they’re performing at such a high level with consumers in today’s environment.

We’ve translated our learning into a model with concrete principles that can apply broadly across categories regardless of brand size, category and age!

Hyper-Unit Growth brands prioritize strategies to drive habitual consumption by understanding how to integrate your brand into consumers’ daily, weekly, or monthly rituals- make it a necessity and easy to buy, use and replenish. Driving habit formation has been a staple of successful digital platforms which place consumption at the tips of your fingers: big platforms like Amazon with Subscribe & Save or subscription-based health services like Whoop and Oura.

Brands that rely not only on external triggers, such as subscription notification, but also internal triggers, which come from a deep need for the product, cement habits to the point where purchase is automatic rather than something that needs to be justified. Rinse and repeat services, products, and brands are becoming essential to consumers’ everyday lives.

Unlock habitual consumption with three principles:

1. Build a superior value equation
2. Inspire multiple occasions
3. Be easily accessible

These come together to create our hyper unit growth engine and altogether drive habitual usage.

Build a Superior Value Equation

A superior value equation comes to life when a brand strives to define its market position with no competition – with instead a core goal of serving the crucial, relevant consumer needs with valued benefits, along with the best ways to deliver on them.

International Delight brings fun and nostalgic flavors to consumers at a price that delights just the same. Brand licensing with other well known products and flavors boosts their flavor profile with favorites like Hershey, Cocoa Pebbles, and Cinnabon. While partnering with pop culture phenomenons boost the brand’s profile- collaborations with the recent Mean Girls movie, and TV shows like the newest season of Bridgerton. The combination of nostalgia, pop culture references, and variety makes International Delight accessible to more consumers than being just a coffee creamer.

A standout for its strong brand ethos and premium ingredients, Kodiak is all about delivering tasty and nutritious food in a protein-packed, convenient way. From on-the-go professionals to parents juggling busy schedules, Kodiak makes breakfast quick, easy, and nutritious for all with its oatmeal and flapjack cups, while simplifying at-home baking with its squeezable flapjack mix.

Sumo Citrus has made a name for itself in the world of citrus- consumers are delighted by the better benefits Sumos offer them vs. their regular mandarin or orange: They’re bigger, easier to peel, have no seeds, and taste that much sweeter! Paying the premium price for this mandarin is worth it to consumers – who flock to social media to rave about how Sumo makes their favorite fruit that much sweeter!

Vital Farms brings “ethical food to the table” through their responsibly produced eggs and butter. Their farmer’s market-inspired packaging conveys not only aesthetic appeal but the brand’s ethos, with egg cartons that proudly state, “tended by hand on small family farms” and “made with fresh air and sunshine.” For those willing to pay a little extra, Vital Farms is the perfect way to show they care about their health, the environment, and happy chickens

Be Easily Accessible

Accessibility – ensuring your brand is easy to find, buy, and use – is one of the core drivers of habitual brand usage. One click accessibility right at the fingertips of shoppers is crucial to keep people coming back – and prevent them from straying elsewhere! In today’s world, this means outsized shelf presence, multiple points of interruption in store, and showing up digitally. Brands need to always be only one arm’s length, or one click, away.

Rao’s Homemade has expanded into soups, pastas, and frozen entrées. From the brand’s inception, consumers have enthusiastically paid a premium for their sauce, drawn to the clean, high-quality ingredients and the brand’s ability to communicate craftsmanship and authenticity. Their premium packaging and brand block turns retail into their #1 medium to drive sales- supported by retailers that realize the boost to their category performance when Rao’s converts more consumers into the brand.

The search is on for fun and novel ways to caffeinate, and Alani Nu attracts Gen Z
shoppers looking for a buzz. Colorful packaging and nostalgic flavors like Hawaiian Shaved Ice bring a playful and fresh twist to the category – and remind people of their favorite childhood treats! The brand’s success is propelled by its strong instore presence, with endcaps, presence in the cooler, and special displays keeping it top-of-mind and encourage consumers to grab a few as they shop around!

In a crowded snack aisle, Nature’s Bakery stands out as the go-to for parents wanting healthier treats that kids love, while also catering to various dietary needs. Nature’s Bakery provides an engaging online experience that educates and turns one-time visitors into loyal fans. Engaging social content draws in consumers, while features like Subscribe & Save and a slew of rewards programs keep people coming back!

Inspire Multiple Occasions

This lever is all about giving consumers more ways to use your product or view your brand outside of its core offering. Being able to use one product for a diverse range of occasions sparks consumer interest, and encourages them to buy more so they can use it for all the moments they want to!

Lifeway Foods has elevated kefir and farmer’s cheese from dull dairy staples into trendy must-haves. Their Instagram serves as a hub for discovering new ways to mix their products into everyday recipes, and consumers turn to TikTok by the millions to whip up their own unique takes on these healthy but tasty innovations. While kefir is often associated with breakfast, Lifeway products can be used to elevate any meal.

Liquid IV’s hydration powders can be used by anyone, anywhere, and the brand’s fun and fresh flavors attract athletes and non-athletes alike. With benefits across energy, immunity, gut health, and sleep, there’s no shortage of moments to grab a packet of their electrolytes—whether it be following a workout, the morning after a social evening, on an airplane, or daily use to put your wellness shield on.

In a category once dominated by heavy gym goers and lackluster products, Premier Protein is shaking things up with tasty but nutritious protein solutions for shoppers of any sort. The brand celebrates the many possibilities for ready-to-drink enjoyment through its socials which offer inspiration for DIY indulgence. The versatility resonates with consumers, who are eager to share creations like “profee” (protein coffee), guilt-free “nice cream” spun in their Ninja Creamis, or even pudding!

Hyper-Unit Growth Playbook

Superior Value Equation: Be consumer need centric

Constantly improving upon the value equation, by prioritizing needs vs wants that fit into consumers’ day to day life is crucial to driving habitual usage. Brands need to understand both the core consumer needs at the heart of their decision making and the broader frame of reference in which people make decisions – and what they’re comparing your brand to – to grasp the context. A superior value equation is essential to bring in new households and drive repeat purchase.

Inspire Multiple Occasions: Understand your demand spaces

Understanding the demand spaces in which your brand can play in is critical to spurring incremental consumer usage and regimen. Consumers are motivated by underlying needs, many of which ladder up to internal triggers that can prompt instinctual repurchase. Once brands understand where to play, they can pinpoint how to best meet consumers’ needs in these spaces with priority demand plan elements.

Be Easily Accessible: Online to offline (O2O) execution

Bringing people in – and slotting into their busy lives – requires meeting consumers where they are and making it as convenient and obvious as possible that this product is a great fit for their needs. Starting point is using channels to take control of the consumer relationship both physically and digitally . Understanding the consumer role each channel fulfills, and what will delight consumers across each of these channels, will be the key to pulling on the right levers to achieve growth. In a decidedly omni channel environment, brands need to both stand out in-store as well as online with search and media to be “above the fold” and consistently show up organically for shoppers.

Let’s get in touch, we have more insights to share on each of the trends above! Reach out to us at [email protected] to discuss winning, growth boosting strategies.

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Price is What You Pay, Value is What You Get

by Editor | Oct 9, 2024

Price is What You Pay, Value is What You Get

A Roadmap to Driving Consumer Choice

Tide and Ice-T might seem like an unlikely duo, but they teamed up for a memorable reason: cold calls. The Tide campaign called upon (no pun intended) the likes of celebrities from Annie Murphy to Mark Messier to amplify its broader #TurnToCold effort. In the commercials, Ice-T and WWE wrestler “Stone Cold” Steve Austin ring up their high-profile friends to inform them that Tide Pods clean clothes better in cold water than its cheaper competitor does in hot. The campaign’s purpose is two-fold; in emphasizing the high performance of Tide detergent in cold water, consumers can expect cleaner clothes while saving money on their energy bill and feeling better about their carbon footprint.

While the #TurnToCold commercial appears lighthearted and humorous, we also see a smart marketing strategy. Rather than competing with bargain brands on price, Tide asked a different question: how can we demonstrate the value of choosing Tide over the bargain brand? #TurnToCold is Tide’s answer, and it focuses on the benefit side of the value equation over price comparisons. This is a concept with broad application beyond the world of washers and dryers. At Seurat, we think it’s of critical importance to maintain a pulse on consumer decision making, and now more than ever brands must understand how Americans are defining value as they make product choices.

A glance at Wall Street headlines tells one story; major indices rally to heights not seen since 2022, inflation steadily moderates, and U.S. GDP shows promising growth.

However, this is just one side of the story. To understand the entire economic picture, we must also consider Main Street, where the average American works, shops, and lives. A closer look reveals that household debt is at an all-time high and real average income has declined by nearly five percent since 2019. The government stimulus and COVID lockdown savings that once padded Americans’ bank accounts and boosted discretionary spending are now depleted, and sticky inflation across major household spending areas like food and housing continues to eat away at consumers’ sense of financial stability.

Amid economic turbulence, Americans are finding it hard to maintain optimism.

The average American has experienced one too many ups and downs in recent years to maintain hope in a stabilizing economy. The Consumer Confidence Index has trended down over the past three years, with many Americans planning to reduce spending in key categories such as Sports & Outdoor, Home Furnishing, and Housing. These feelings of uncertainty have compelled consumers to change where and how they shop. More consumers are turning to value-oriented retailers in search of deals and selecting value brands or private label at the shelf. Amazon’s recent record-setting $14.2 billion earned during Prime Day underscores just how many consumers are feeling financially squeezed. Even higher-income households are feeling the effects, with 35% of those earning over $150k annually expressing concerns about meeting their financial needs and intending to cut back on spending in areas like entertainment and dining out.

Even as Americans tighten their purse strings, brands still have valuable opportunities to connect with and delight consumers.

Americans express a willingness to spend more for products that make them feel good about themselves and about the world around them. As emphasized by Warren Buffet, separating value from price reveals that the cheapest option isn’t always the most valuable one. Shoppers consider the price but also weigh the intangible costs and benefits that a brand offers, and achieving success through economic cycles means staying attuned to these values and how they might be shifting. Winning brands are the ones that are able to maximize their consumers’ value equations through changing times.

Across a variety of categories and products, we’ve identified five macro drivers of value beyond price that brands can use to be the preferred choice among consumers:

Driver #1: Convenience

As people return to the office and are increasingly mobile, demand is rising for convenient meal, snack and beverage options. Consumers are willing to pay more for food products and services that complement their on-the-go lifestyles.

Driver #2: Functional Benefits

Consumers are increasingly focusing on health and the ability of specific foods and beverages to help support physical and mental well-being. It therefore comes as no surprise that 78% of consumers are willing to pay more for all-natural labels, which is evidenced by sales of products touting functional benefits growing in share. For example, in the past four years, functional beverage sales have surged by 54%, outpacing the market by 11%. Consumers often believe paying more for functional products is worth the perceived increase in benefits.

Driver #3: Customization

As consumers seek more meaningful and tailored experiences, personalization has become a key driver of success for some brands. Shoppers appreciate the creative and bespoke touch that customized products offer. From buying hair care products formulated to your needs to enjoying music blends curated specifically for your taste, demand for unique products is transforming purchasing behavior and showcasing how deeply consumers value individualization.

Driver #4: Sustainable Choices

As focus on environmental and social issues grows, shoppers are increasingly looking to make an impact with their dollars. For example, 67% of shoppers are willing to pay more for Fairtrade products, with an average willingness to spend 9.7% more for sustainability. This trend reflects a strong alignment between personal values and buying decisions, with many consumers choosing to support companies that reflect their beliefs, albeit at a higher cost. Brands that prioritize eco-friendly practices, fair labor, and ethical sourcing demonstrate that business success and sustainability can indeed go hand in hand.

Driver #5: Packaging

Innovating package architecture provides opportunities to capture new consumers and expand a products’ use-cases. Offering hummus in squeezable to-go packs allows consumers to use it as a spread while bypassing soggy bread or the hassle of bringing a tub of hummus to the office. Cylindrical tissue boxes designed for cupholders circumvent cluttered glove boxes and attract consumers looking to have tissues readily available in their car. No matter the product, with the right packaging strategy brands can create new consumption occasions and drive incremental purchases.

To leverage these value drivers, it’s critically important to start with a deep understanding of the consumer decision process to unpack valued (or missing) benefits within the category along with the best ways to deliver on them. We’re confident that with the right insights and strategic approach, brands can not only align with evolving consumer values but also grow their impact and profitability regardless of the economic climate.

If you’re interested in learning how to maximize your brand value through a deeper dive into insights or value strategy, we’d love to continue the conversation. Please reach out at [email protected].

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