Whether for mattresses, razor blades or ready-made soups – small innovative companies are competing with the well-known top dogs in more and more areas. However, this is not entirely without risk for consumers.
FSoups from Little Lunch instead of Erasco, razor blades from Mornin ‘Glory instead of Gillette, mattresses from Casper instead of Schlaraffia: More and more well-known consumer goods manufacturers have recently been exposed to attacks by start-ups who have come up with new ideas and skilful appearances on social media to contest the market.
“Sports, hobbies, eyewear, health, food: there is actually no industry where the trend towards more diversity in the range cannot be observed,” reports trade expert Martin Fassnacht from the WHU business school.
The reason is obvious to the marketing expert: “The diversity of customer needs has simply increased.” Many consumers want something that not everyone else has and are also willing to pay a little more for it. Fassnacht believes that there is scope for newcomers, especially in product categories that are dominated by one or two major manufacturers.
The diversity of customer needs has increased
One example is the spice market in Germany. Traditionally, the shelves in the supermarkets are dominated by the German spice king Fuchs from Dissen am Teutoburg Forest, who not only sells his spices under his own name but also under the Ostmann and Ubena brands. Its market share is estimated by the trade journal “Lebensmittel Zeitung” at 75 percent.
But more and more often, in addition to the inevitable Fuchs shelves, stands for the young competitors Just Spices or Ankerkraut can be found in grocery stores. Just Spices was founded in 2014 by three friends. Co-founder Béla Seebach recently explained the motivation as follows: “We found the range in the store totally boring and lacking in innovation.” In the meantime, the start-up is not only wooing customers with lots of exotic spices, but also with mixtures ranging from scrambled egg spices to vegetable spices. Spice for children.
The organic ready-made soup manufacturer Little Lunch, which first became known to the general public through the television program “Die Höhle der Löwen”, made it into the top 100 German brands in the “Lebensmittel Zeitung” brand ranking this year An indispensable part of many supermarkets. Other newcomers mainly sell their products on the Internet and thus manage to steal market share from established manufacturers. This is particularly noticeable with mattresses, where start-ups such as Casper or Bett1 are increasingly bothering the established manufacturers.
Microbrands with great growth opportunities
The management consultancy Oliver Wyman (OW) estimates the market share of the “microbrands” in the consumer goods market at four to five percent and sees enormous growth opportunities. Such newcomers could secure up to 25 percent of the market by 2025. “The trend towards small, innovative brands is only just beginning in Germany and will intensify over the next few years. There are already four and a half times as many such start-ups in the USA as in Germany. That shows where we’re headed, ”predicts OW retail expert Martin Schulte.
And an end to the development is not in sight. After all, digitalization makes brand building and sales much easier for start-ups. “The trend is towards the disposable brand. We will be inundated by new brands that come out of nowhere, look great and make us try them out, ”the industry expert is convinced.
However, this is not entirely without risk for consumers. “Many of the companies are quickly disappearing from the market. Then you have no guarantee or promise of repairs, “warns Schulte and adds:” Especially with the beauty start-ups, there were cases where consumers had health problems and skin irritations – that would never happen with an established brand. “