Contract Manufacturing That’s Powered By Celebrity
With margin being squeezed in every direction, something must give to satisfy Americans that have been drunk on low prices for decades. I believe that contract manufacturers are peering through a massive window of opportunity. The internet provides them with the ability to go direct-to-consumer and remove various intermediaries (or middlemen). This would essentially enable consumers to buy higher quality products at lower prices.
Consumer-to-Manufacturer (C2M) Model
Interactions between consumers and contract manufacturers are nothing new (and soon to be commonplace). Contract manufacturers have always collected consumer data to better gauge trends and leverage that information for new product development. Here’s the big difference…these product innovations wouldn’t be commercialized by the contract manufacturer and sold directly to consumers. Instead, it’s typically offered to current and potential CPG brand clients as a new capability.
So, why haven’t contract manufacturers servicing the various CPG product categories jumped headfirst into the consumer-to-manufacturer (C2M) model?
The C2M model is not without risk. Fact is, almost all contract manufacturers are not built for that advanced business model. This became super apparent when Amazon launched an “owned brands” private label accelerator program in Q4 of 2018. Though it wasn’t technically selling directly to customers, Amazon was not involved in the typical creative aspects of the private label manufacturing process. These approved contract manufacturers had to create the brand elements, products, and get sales traction on the most competitive marketplace in America. Most of these activities that the Amazon private label accelerator asked contract manufacturers to “own” were not core competencies.
Major C2M Lesson Learned
Most of these Amazon accelerator brands within the CPG product categories failed to meet market expectations. While that’s not ideal, it did give contract manufacturers a taste of something excitingly different and those learnings are feeding the future of the C2M model today.
You are now starting to see more contract manufacturers…
Evolving their business models to account for the brand development and commercialization value chain resources.
Partnering with CPG brands or third-party service providers that specialize in key “gap areas.”
C2M Powered By Celebrity
It’s our love and trust for famous people, combined with the ease in launching and marketing CPG products that has created a surplus of celebrity-backed brands. That being said, I truly believe that the right celebrity, used in the right way to promote the right product, can be a truly powerful brand asset in today’s CPG market.
So, what if we took the C2M model and tossed in the power of celebrities?
I believe the ability to readily articulate and aestheticize one’s defining personality traits is a skill that will become increasingly important by the day. Every celebrity is also a brand now, heck every human is a brand now even if they haven’t figured it out yet.
[Right Celebrity + Right Product] Concepts
Though you could do this on a smaller scale with nano-influencers, I’m talking about A-list celebrities, personalities, and top influencers that have a huge amount of today’s attention.
Justin Bieber has done several successful Tim Horton’s collabs and capitalized on his song ‘Peaches’ with a cannabis line, but did you know he’s obsessed with pasta? Move over Bertolli’s because Bieber could easily make a line of premium pasta and Italian food products.
The only thing bigger than the biceps on Dwyane “The Rock” Johnson would be the unit sales of his packaged beverage brands. I think it’s now time for a jump into the food space by him capitalizing on the buzz he creates with his epic cheat meals. These usually revolve around peanut butter French toast, which The Rock could easily put a protein-added spin on to better align with his fitness-focused personal brand.
Did you see the ‘Cooking with Paris Hilton’ episode that guest starred Kim Kardashian? I was actually quite surprised at how well she was able to handle herself inside the kitchen. It seems the reality star is now eating a mostly vegan diet, so why not create a center aisles premium plant-based packaged food brand?
Oprah Winfrey has had a truffle obsession ever since Lisa Marie Presley sent her a gift basket full of food items that included truffle salt in 2008. It’s time for one of the richest women in the world to turn being a truffle freak into a successful revenue stream, right?
Disney is an entertainment IP powerhouse, but it's the company’s popular Disney Eats YouTube Channel that could be a gold mine of CPG value. I would focus on packaging up the recipes seen in the YouTube videos into easy kits for children and parents to enjoy cooking/baking together.
Final Thoughts
Fortune favors the bold and, increasingly, the many celebrities who’ve made the leap into the CPG industry. The success stories are plentiful, so why not layer in a C2M model contract manufacturer to make it easier for celebrities to monetize themselves in across the CPG industry.