How to Scale Like an Upstart Startup

Posted on June 27, 2018

As the consumer goods landscape rapidly changes and commercial opportunities morph and multiply, intrinsic change for companies is not only called for, but rewarded with exponential growth. A recent report by business management consulting firm Bain & Co. outlined key approaches employed by ‘insurgent’ startups across the FMCG sector making massive gains. We detail their findings below, with local examples.

Gathering IRI data from 90+ FMCG categories, interviews with insurgent brand senior executives, and surveys of nearly 5,000 consumers across 10 categories and 57 brands in the USA; the results provide a clear indication of trends.

Across developed economies, relatively young companies are disrupting profit pools as they earn a disproportionate share of their sectors’ growth. These ‘insurgent’ upstart brands only account for 2% of the market share across the 45 categories that they’ve disrupted, for example; yet they have captured around 25% of the growth from 2012 to 2016.

To keep pace with up-and-coming heavy hitters, a clear vision, entrepreneurial mission and  commitment to deeply satisfying consumer needs is essential. In many cases, this powerful combination has built momentum to the tune of USD25-500 million in annual revenue and outpaced category growth rates by more than 10 times over the past five years. Here’s now, according to Bain & Co.:

  1. Select a compelling proposition backed by an authentic brand story

To stand out from bigger and more established competitors just takes a little extra empathy. Work to address real, unmet consumer needs and you are sure to outperform similar brands. This is especially true, according to their primary research, when it comes to emotional and life-changing aspects of products.

Dovetailing nicely with this, embody your brand’s mission. Customers are more likely to become advocates of a brand when the story of the brand speaks out about its ultimate cause and the foundations of its identity.

One such Australian brand, Jo & Co Foods, provides dietary intervention and prevention for families grappling with gut-health issues, the effects of which can be debilitating – as Founder Jo Hall knows too well. Beginning with her own journey healing her son’s autism through food, Jo’s mission is to change the lives of families across Australia and the world. “I want Jo & Co Foods to be synonymous with a food manufacturing company that everyone can implicitly trust,” she told us recently. “I want people to know that every single ingredient that goes into our products doesn’t harm their gut microbiome, which is incredibly important for the health of my child, and incredibly important to others feeding their families as well.”

Strong company missions have been shown to help to spur category growth by increasing either consumers, or price points; which can in turn support a positive growth story for your brand. Employees also rally behind strong missions, adding to that sense of authenticity at every touch point with consumers and generating not just revenue but meaningful experiences.

  1. Connect brand assets to consumers in innovative ways

According to the Ehrenberg-Bass Institute for Marketing Science, increasing penetration is the main route to becoming a big brand. Bain & Co. suggest that three key brand assets to strategise around here are memorability, shopper visibility and range productivity.

Make your presence felt at local events with targeted sampling to drive media exposure, while also consistently targeting your core demographic using digital marketing tools – and back your hero SKUs before expanding your range. This approach leverages low-cost options to generate brand memorability and visibility while generating a steady income from your most likely customers.  

We spoke with one of Morlife’s co-founders, Cheryl Stewart, at the last Fine Food Fair in Sydney, where Morlife exhibited its wares to potential buyers. Combining innovative communication methods (such as WeChat) with targeted sampling at the fair proved a powerful combination. She told us, “There are quality buyers here – major supermarket buyers and well-run networking events that have allowed me to connect with other like-minded businesses and international buyers. One of the things that has happened for us at this trade show is that one of our international buyers that we’ve been speaking to for a year finally did a commitment and we signed a deal, literally an hour ago, so our products will venture into China and Hong Kong through her, and she’s agreed to take 26 lines of the Morlife range. We’re really looking forward to processing that first order soon!”

While large brands have the resources to scale media campaigns, channel distribution and product portfolios, upstart startups have the ingenuity (by virtue of necessity) to think differently and grow faster because of it. 

  1. Grow nimble organizations with an owner mindset

In such a fluid commercial landscape, with changing consumer trends, and flexible relationships between brands and consumers; it has never been as important to be quick on your feet. From working processes, to talent, to mindset, upstart startups are faster at every point of production. Lean, cross-functional organisations with an ecosystem of partnerships are proven to be much more adaptable inmarket. Bain & Co. research also suggests that disruptor brands are on average three times faster than their larger competitors.  

For a small company like the superfood snack bar brand The Daily Bar, forming an ecosystem in which to flourish is first and foremost about building relationships. We chatted with Co-Founder Al Thursfield about the business-to-business matching session Export Connect had arranged for The Daily Bar with international buyers in May this year. Here is what she said: “We’re about talking to people and trying to learn as much as we can. It‘s such an honour to be in front of someone with such experience and expertise, so it also means picking the buyers’ brains and seeing if they have any suggestions for our brand. We’d love to one day see The Daily Bar go international – it’s just about having conversations and building relationships.”

Starting small but aiming with precision at high growth strategies often means that insurgent brands gain access to key talent with experience (without having to pass up younger talent with technical know-how seeking unconventional workplaces).

All these approaches flow from – and continually reinforce – an upstart mindset. Throughout the entire organization, employees that treat the business as though it was their own embody their conviction that together they can disrupt their industry to solve real, important needs. And in so doing, they scale, like an upstart startup should.

To scale your business through export, learn to select the right markets, connecting with pre-qualified buyers, and grow your export strategy. Contact us at service@exportconnect.com.au for further information.