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1、Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Elements of Value is a registered trademark of Bain&Company,Inc.Founders Mentality is a registered trademark of Bain&Company,Inc.Copyright 2022 Bain&Company,Inc.All rights reserved.AuthorsEric Melloul,Managing Director,Verl

2、investBen Black,Director,VerlinvestJean-Charles van den Branden,Partner,Bain&CompanyMagali Deryckere,Associate Partner,Bain&Company1Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.Executive Summary The consumer products market does not account

3、 for hidden external costs,such as the$11.9 trillion in costs that outweigh the food industrys$10 trillion value.A new generation of insurgent companies focused on environmental,social,and corporate governance(ESG)are addressing this challenge for people and the planet by offering products that have

4、 fewer hidden costs,while at the same time building new growth models.These purpose-led brands,as we refer to them,are rapidly gaining traction.Insurgent brands scoring highest on sustainability have as much as 10 times higher revenue growth than traditional brands.A Bain consumer survey also showed

5、 that more than 70%of consumers are willing to pay a reasonable premium(approximately 10%25%)for sustainability.Purpose-led brands typically gain traction by creating issue awareness.This drives consumer interest in their products,spurs retailer demand,and attracts and motivates high-quality employe

6、es.All of these factors lead to better growth and,in turn,higher interest from investors.Between 2019 and 2020,the number of new companies espousing an ESG mission more than doubled.Now,35%of all new consumer products start-ups have a clear ESG mission,a tenfold increase since 2005.Purpose-led brand

7、s are also becoming more successful at scaling,with 7%reaching more than 50 million in revenue vs.4%for consumer packaged goods overall.Successfully scaling a purpose-led start-up poses challenges:Growing the business to mainstream success,and maintaining the commitment to purpose and remaining lase

8、r focused on that purpose once the company reaches significant scale.Of founders surveyed,71%mentioned barriers related to consumers and distribution as the leading challenges to scale,while 62%mentioned supply chain and 24%mentioned organization.Successful purpose-led brands do three things well:Th

9、ey provide a mainstream value proposition accessible at mass-market price points,they build sustainable supply chains,and they maintain an uncompromising sense of purpose to team members and consumers.At the same time,existing market incumbents can learn lessons from these brands by adopting a Found

10、ers Mentality,embedding sustainability in the front line,and transforming their supply chains at scale to ensure positive societal and environmental impacts.2Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.The worlds food system creates$10 tri

11、llion in value and feeds billions of people,but it also faces big challenges.Food and its production have unintended consequences,including pollution.The system overfeeds some and undernourishes others.These consequences generate hidden external costs,such as health issues,environmental damage,and e

12、conomic losses.Thats just a sampling of hidden costs that are unaccounted for in the broader consumer products market.And those costs add up.In the food industry,for example,the total$11.9 trillion of hidden costs exceeds the value of the industry itself(see Figure 1).Yet this problem also creates a

13、n opportunity for consumer goods brands.As consumers,retailers,and investors alike grow more aware of these issues,that awareness is translating into increased demand for more sustainable goods.Purpose-driven brands:Positive change,fewer hidden costsA new generation of purpose-driven brands is takin

14、g up this challenge and opportunity.An increasing number of companies are making it the mission of their brand to solve a specific environmental,social,or governance(ESG)issue.These ESG-focused,or purpose-led,brands make that missionwhether solving an environmental issue such as pollution or a socia

15、l issue such as forced laborthe focus of every part of their business,from supply chain to final product.Figure 1:The cost of obesity,greenhouse gas emissions,rural welfare,and other unintended consequences of the food production system totals$11.9 trillionSource:Food and Land Use Coalition,“Growing

16、 Better:Ten critical transitions to transform food and land use,”2019Market value ofglobal food system10.0HealthObesity2.7Undernutrition1.8Pollution and pesticides 2.16.6EnvironmentGreenhouse gas emissions 1.5Natural capital costs1.73.1Food system valuenet of hidden costs1.9Hidden costs of global fo

17、od and land use systems(2018 prices in trillions of US dollars)Economic and socialRural welfare 0.8Food waste andfertilizer leakage 1.32.13Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.Purpose-led brands create a simple,compelling message to

18、 educate consumers about the issue at the heart of their mission,and they often use one clear data point to anchor the message(see Figure 2).For example,Dove brands advocate a positive relationship with beauty and cite data about how typical beauty imagery harms the self-esteem of women and girls.Be

19、yond Meat cites data about the emissions and land use costs of beef and argues for“a better way to feed our future.”Each of these brands illustrates how clarity of purpose can change consumer behavior while creating category growth.And as these brands find footholds in the mainstream market,their su

20、ccess has a cumulative effect on their industry and the wider world.As their scale grows,so does their impact.One surveyed founder noted,“Being specific on what you are trying to solve is really key.”For example,Tonys Chocolonely focuses on eliminating child labor and improving farmer livelihood,whi

21、ch has a powerful effect on reducing hidden costs in the chocolate industry(see Figure 3).Beyond their sustainability goals,purpose-led brands also strive to deliver great taste/performance and attractive packaging at an accessible price point to ensure mass-market appeal.To provide true value,their

22、 products offer both positive changes in the world and high quality.According to Richard Reed,cofounder of climate-conscious drink brand Innocent,this is a hallmark of successful ESG-conscious goods.“Dont ever expect consumers to buy your product because it is ethical at the expense of taste and per

23、formance,”says Reed.Figure 2:Purpose-led brands focus on one key issue for their industry in which they want to have a maximal positive impactSources:Brand websites;Bain&Company and Verlinvest analysisBrandMissionData-ledinsightConsumermessageMake it easy forpeople to eat betterand live healthier li

24、veswithout recklesslytaxing the planetsresourcesSwitching from dairy tooat milk reducesemissions by 73%Its like milk,but madefor humansEnsure everyone hasaccess to clean waterand a toilet withinour lifetimeTwo billion people do not have accessto a toilet todayToilet paper thatbuilds toiletsEnsure th

25、at the nextgeneration grows upenjoying a positiverelationship with theway they lookOnly 2%of womenaround the world woulddescribe themselvesas beautifulCampaign for Real BeautyDove Self-Esteem ProjectCreate nutritious plant-based meats that tastedelicious and deliver aconsumer experienceindistinguish

26、able fromthat provided by animal-based meatsThe Beyond burgergenerates 90%less greenhouse emissions,requires 46%less energy,has a 99%lower impact on water resources and 93%less land use thana pound of US beefWe believe theres abetter way to feedour futureMake slave-freechocolate the normMore than 1.

27、5 millionchild laborers areworking in cocoa todayTogether well makechocolate 100%slave-free4Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.Bains research confirms Reeds assertion.Our global survey of 60 brands across eight consumer goods cate

28、gories found that the most successful companies address consumer demand for both quality and sustainability.Bain&Companys Elements of Value research,which aims to reveal what consumers perceive as valuable about a brand,identifies 30 fundamental Elements of Value that fall into four categories:funct

29、ional,emotional,life-changing,and impact.In the global impact category,we recently added three sustainability-related Elements of Value:cares for the earth,ethical,and invests in well-being.“Creating a purpose-led product doesnt mean making compromises with the brands taste and visual aspects.”Purpo

30、se-led brand investorPurpose-led brands score highest on those sustainability-focused Elements of Value,while also offering three times as many Elements of Value,such as design,sensory appeal,or“premiumness,”than incumbent brands(see Figures 4a and 4b).Figure 3:Tonys Chocolonely aims to eliminate sl

31、ave labor from its chocolate productionSources:True Price;Bain analysisHidden costs of chocolate before and after Tonys Chocolonelys actions(in euros per kilogram)Tonys Chocolonely reduction of impactHidden costs of chocolatebefore Tonys actionEnvironmentEconomic and socialHealthLess impacton enviro

32、nmentLess impact oneconomic and socialHidden costs of chocolateafter Tonys actionNearly 90%reductionon economic/socialhidden costsNearly 55%overall reductionNearly 40%reductionon environmentalhidden costs5Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Co

33、mpany,Inc.Figure 4a:Purpose-led brands tend to score highest on sustainability-focused Elements of Value Self-transcendenceProvideshopeSelf-actualizationMotivationAffiliationand belongingHeirloomIndulgenceReducesanxietyNostalgiaDesign/aestheticsBadgevalueWellnessTherapeutic valueAttractivenessFun/en

34、tertainmentPremiumAuthenticitySaves timeSimplifiesNaturalSimpleformulationSensoryappealReduces effortAvoids hasslesReduces costQualityVarietyProvideshopeSelf-actualizationMotivationAffiliationand belongingHeirloomIndulgenceReducesanxietyNostalgiaDesign/aestheticsBadgevalueWellnessTherapeutic valueAt

35、tractivenessFun/entertainmentPremiumAuthenticitySaves timeSimplifiesNaturalSimpleformulationSensoryappealReduces effortAvoids hasslesReduces costQualityVarietySelf-transcendenceCares for the earthEthicalInvests in well-beingNotes:Brand considered to deliver on an element if 35%or more of respondents

36、 rated it 8 or higher on a scale of zero to 10;Elements of Value is a registeredtrademark of Bain&Company,Inc.;2022 Bain&Company,Inc.Sources:Bain Elements of Value consumer surveyUK,France,and Netherlands,June 2021(n=8,303);NielsenOutwardly focused valueInwardly focused valueImpactLife-changingEmoti

37、onalFunctionalFigure 4b:Brands that score well on sustainability Elements of Value outgrow competitorsNotes:Brand considered to deliver on an element if 35%or more of respondents rated it 8 or higher on a scale of zero to 10Sources:Bain Elements of Value consumer surveyUK,France,and Netherlands,June

38、 2021(n=8,303);Nielsen3x5x2xRevenue growthfrom incumbentbrands scoringhighest onsustainabilityElementsof ValueRevenue growthfrom brandsscoring higheston sustainabilityElementsof Value10 xRevenue growthfrom insurgentbrands scoringhighest onsustainabilityElementsof ValueHigher averageElements ofValue

39、frombrands scoringhighest on sustainabilityElementsof Value6Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.Purpose unlocks a flywheel of consumer,employee,retailer,and investor demandWhen purpose-led brands promote sustainability through thei

40、r products,they create a virtuous cycle that forms the heart of a new,self-reinforcing model of purpose-driven capitalism.Rather than simply capitalizing on existing trends,purpose-led brands typically gain traction by creating issue awareness and shining a light on lesser-known problems.This piques

41、 consumer interest in their products,spurs retailer demand,and attracts and motivates high-quality employees.That,in turn,leads to higher growth and greater interest from investors(see Figure 5).For the many employees looking for a job that does more than simply pay the bills,purpose-led brands offe

42、r an opportunity to also have a positive impact on the world.More than 40%of millennials say they seek jobs with a purpose.And purpose-led brands provide such employees with agile environments where test-and-learn practices and innovation are encouraged.While the innovation budgets of incumbent comp

43、anies are frequently trimmed to as little as 1%to 2%of sales,purpose-led brands often spend far more on research and development(R&D).At Beyond Meat,for example,R&D accounts for 11%of sales.“One of the main reasons employees want to come to work in our firm is because their values are aligned with o

44、urs and they want to help our firm have an impact in the world.”Jane Prior,CMO at Vita Coco The issue awareness raised by purpose-led brands also sparks consumer interest.A growing number of consumers say that ESG is among their buying criteria,with 14%reporting that it is their top criteria(see Fig

45、ure 6).Another 27%of consumers rank the planet as their third most important priority after health and quality.A Bain consumer survey also showed that more than 70%of consumers are willing to pay a reasonable premium(approximately 10%25%)for sustainability.The youngest consumers are more willing to

46、pay for sustainability,even at lower income levels.In fact,age is one of the most significant differences between the consumer demographics of incumbents and those of purpose-led brands,whose customers tend to be younger and more focused on ESG and lifestyle.Millennial and gen Z consumers are especi

47、ally sensitive to sustainability issues and tend to seek out purpose-led brands more than any other generation.7Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.Figure 5:The purpose flywheel,a value creation system propelled by employee,consume

48、r,retailer,and investor demand for purpose-aligned goods Source:Bain&CompanyInvestor interestRetailer supportEmployeesIssue awarenessConsumer interestPurpose-led brandsPurpose-led brands have created a purpose flywheel in which all stakeholders contributeto accelerated growthFigure 6:41%of consumers

49、 rate environmental and social consciousness or health consciousness as their key purchasing criteriaSource:Bain Elements of Value consumer surveyUK,France,and Netherlands,June 2021(n=8,303)Environmentally and sociallyconsciousEducated andconcerned aboutthe earth andtheir healthWhat isimportant?Perc

50、entage ofrespondentsCare forplanetLowCare forhealthCare forsuppliers/employeesHealthconsciousConcerned aboutdiets and healthquality of productsQualityconsciousFocus onqualitative,healthy productsLifestyleconsciousAdapt purchasinghabits to everydayneeds/desiresBest valuefor moneyUse money-savingtacti

51、cs,andoptimize qualityHighInterest in sustainability21%9%29%27%14%8Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.This demand,especially among valuable young consumers,makes ESG-conscious goods particularly attractive to retailers.Within the

52、next five years,millennials,who already over-index on purchasing sustainable goods,are set to have the highest purchasing power of any consumer group.Millennials constitute 50%of the market for purpose-led brands,yet represent only a little more than 30%of the market for incumbent brands(see Figure

53、7).“Embedding sustainability more in our organization accelerated creativity,leading to three times as many innovations”Consumer goods executiveThe effects of these spending trends are clear:Purpose-led brands bring value to retailers store shelves and bottom lines,and retailers are seeking products

54、 that attract this millennial spending.“Sustainable insurgents bring profit and traffic,”says Milena Lazaraveska,formerly of Sainsburys Future Brands team and currently leader at Delivery Hero.“They increase the basket size and value.They bring incremental sales to the category,new customers,differe

55、ntiation,and premiumness.”In other words,insurgent brands add value to their category,bringing innovation,emotional engagement,and money back into categories where price and promotion had become the dominant levers of engagement.Customers,employees,and retailers arent the only ones taking notice.Obs

56、ervant investors also have tracked the rapid growth rates of purpose-led brands,with investors large and small pouring money into the category.As it becomes clearer that sustainability can be a major source of growth,many investors see purpose-led brands as a key to future-proofing their portfolios.

57、“Sustainable investment assets grew to$35.3 trillion globally last year amid mounting concerns about societal inequities and climate change,”the Global Sustainable Investment Alliance noted last year,according to a Bloomberg article.“Thats about$1 of every$3 managed globally seeking out a profit fro

58、m environmental,social,and governance concerns.”In short,fired by the flywheel,purpose-led brands promise value across the spectrum,from consumers and employees to retailers and investors.Yet to fully realize that promise,purpose-led brands,whether created by new insurgents or by incumbents who reco

59、gnize the value of this growing market,still face one major hurdle:achieving scale.9Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.From niche to mainstream:How successful purpose-led brands scaleThe success of purpose-led brands has led to a

60、large number of new,ESG-focused entrants.Between 2019 and 2020,the number of new companies espousing an ESG mission more than doubled.Today,35%of all new consumer products start-ups have a clear ESG mission,a tenfold increase since 2005(see Figure 8).This influx of brands has changed the very nature

61、 of the consumer products category:In 2020,“sustainability”outpaced“functional benefits,”“wellness,”and“convenience”among consumers top priorities when making buying decisions.Yet not all of these brands survive.Even fewer make it to mass-market scale.Companies often struggle to translate success as

62、 a start-up into mass-market acceptance.Bain research finds that of all consumer products start-ups,only 10%manage to achieve at least 10 million in sales.Even fewer,just 4%,make it to 50 million in sales.But purpose-led consumer products start-ups face an even more arduous challenge.They must stay

63、true to their ESG mission while scaling and once at scale.As they adapt to a more rapid pace,create larger supply chains,and hire more employees,they must find ways to preserve the ESG values that made them successful in the first place.Figure 7:Millennials,soon to be the largest purchasing group,ma

64、ke up nearly half of the market for sustainable insurgent brandsSource:Bain Elements of Value consumer surveyUK,France,and Netherlands,June 2021(n=8,303)Millennials 2544Gen X 4554Baby boomer 55 or olderGen Z 1824 IncumbentsPurpose-led brands33%50%37%19%Percentage split of consumers by age group(2021

65、,EU,8,000 consumers)Millennials drive expenditure growth and will become theconsumer group spending the most within the next five years10Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.This is exactly what waste-conscious cleaning product manu

66、facturer Blueland needed to do.Scaling its product line meant finding innovative ways to change long-held industry practices.Ultimately,these growing pains allowed Blueland to deliver its zero-plastic-waste cleaning products at scale while also creating a new supply chain.Doing so was difficult but

67、important work that required staying aware of and avoiding unintended consequences.For years,the dual difficulties of scaling and staying true to ESG principles made mainstream success a rare achievement.Purpose-led brands started between 2005 and 2010 faced a 14%success rate in reaching 10 million

68、in sales.Comparatively,the index of all consumer products start-ups had a slightly better success rate:18%reached 10 million in sales.Yet market changes in the past decade,caused in part by the purpose flywheel,have eased the challenges these start-ups face.Today,17%of purpose-led start-ups successf

69、ully grow to mainstream success.Remarkably,they now outperform the index of all consumer products,whose success rate has dropped to just 10%(see Figure 9).Despite improving odds,success is still challenging.A recent Bain and Verlinvest global survey of purpose-led brands found 71%of founders mention

70、ed barriers related to consumers and distribution as one of the leading challenges to scale,while 62%mentioned supply chain and 24%mentioned organization(see Figures 10 and 11).Figure 8:Companies with an environmental,social,and corporate governance mission represent one-third of the consumer produc

71、ts companies founded in 2020Sources:Bain analysis;CrunchbasePercentage of consumer products insurgents founded with an environmental,social,and corporategovernance mission010203040%20053%20107%20157%201813%201915%202035%11Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale V

72、erlinvest|Bain&Company,Inc.Figure 9:The success rate of sustainable start-ups now outpaces the index of all start-upsSources:Crunchbase;Bain analysis Purpose-led start-upsOverall consumer goods start-ups reached 50M in sales reached 10M in salesPercentage of consumer goods start-ups that 14%20052010

73、2%17%201120157%18%200520105%10%201120154%Figure 10:The myriad challenges of scaling a purpose-led brandSource:Bain&Company,inspired by Crossing the Chasm by Geoffrey A.MooreInnovatorsEarly majorityLate majorityLaggardsEarly marketEarly marketConsumers/channel/commercializationSupply chainOrganizatio

74、n niche sustainable salespoints environmentally/socially consciousconsumers willing to pay a premium Scalea sustainable way of supplying your product,rebuilding supply chains as todayno sustainable supply chain has truly scaled successfullyRetainMainstream marketthe mission-driven culture and focus

75、of the organization while it sees increases in scale and complexityFrom mass supermarkets a general consumer group toThe Chasm12Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.What differentiates the purpose-led brands that enjoy mainstream su

76、ccess from those that fail to break free of their niche?Successful purpose-led brands share three characteristics:A mainstream value proposition accessible at mass-market price points.The brands products resonate with mainstream consumer values,not just those of ESG-conscious consumers,and are distr

77、ibuted in mass channels,not just through niche,sustainable-focused retailers.A sustainable supply chain.The brands commitment to sustainability extends from concept to consumer.Often,as these brands disrupt the industry,they need to re-create/reinvent the supply chain to reach scale.An uncompromisin

78、g sense of purpose.The brands people and organization live and work the brands mission,even with increasing complexity and less direct involvement by the original founders.Working in concert,these three traits allow purpose-led brands to achieve mainstream scale.A mainstream value proposition access

79、ible at mass-market price points.In Crossing the Chasm,author Geoffrey A.Moore examined what it takes for technology products to move beyond the relatively small group of early adopters and“cross the chasm”to a larger,mainstream market.The growth of Figure 11:Challenges in scaling a purpose-led bran

80、d without losing sight of the core missionSource:Bain founders survey,2022(n=21)Key barriers per topicConsumers and distributionCreating superior tasting/performance(14%)Mainstream consumers not educatedaround sustainability(18%)Communication of key sustainabilityissues in noisy market(23%)Retailers

81、 not yet willing to support(9%)Unwillingness to pay a premium(18%)Maintaining differentiation vs.incumbentbrands as scale and competition increase(18%)Supply chainAccess to enoughsustainable material(38%)Set up supply chain atreasonable cost(63%)OrganizationOverall 71%of founders mentionedit as one

82、of the key barriersOverall 62%of founders mentionedit as one of the key barriersOverall 24%of foundersmentioned it as one of the key barriersAttracting mission-driven talent,capable of growth andsustainability(21%)Maintaining mission-driven,entrepreneurial culture as thebusiness scales(14%)Attractin

83、g like-minded capitalproviders(21%)Knowledge to scale the missionacross countries(43%)13Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.purpose-led brands requires a similar leap.A mainstream value proposition starts with effective consumer ap

84、proaches,commercialization,and channels.Factors like price,performance or taste,and packaging are make-or-break for mainstream brands.Purpose-led start-ups gain a foothold with a committed and loyal core following.These early fans buy the brands products specifically because of its commitment to an

85、ESG value.An impressive 87%of these purpose-conscious consumers will pay more for sustainable goods.“Newer generations learn at school what sustainable food is.Theyre starting to influence the purchasing of their parents,and they will soon have their own purchasing power,which will accelerate the tr

86、end.”Retail expertOur research shows that a young purpose-led brand still has 70%to 80%of its consumers within the environmentally/socially conscious consumer group,and the other 20%are split between mainly health-conscious and lifestyle consumers.Once a brand achieves sufficient scale to cross the

87、chasm between early and mainstream market,this consumer split shifts,with only about 20%of the consumers representing the environmentally and socially conscious group,though this is still about twice as many as for incumbents(see Figure 12).of founders mentioned barriers related to consumers and dis

88、tribution as one of the leading challenges to scale.71%mentioned supply chain and 24%mentioned organization.62%While14Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.Growing beyond those environmentally and socially conscious consumers require

89、s brands to address the key purchasing criteria of other groups,which are more linked to health,price,and quality.While a brands issue-conscious consumers may compromise slightly on performance,taste,or price to buy a sustainable product,the majority of mainstream consumers will not.As start-ups,pur

90、pose-led brands are able to charge more for their productssometimes as much as twice the price of comparable-but-unsustainable goods.But mainstream consumers will not pay more than 10%25%more than the next highest priced comparable product.Tonys Chocolonely,for example,is successful with a price tha

91、t is about 25%more expensive than mainstream chocolate.“Around 10%of the people are buying our chocolate because of our mission,the rest buys it for the product(good chocolate),”notes Henk Jan Beltman,Chief Chocolate Officer at Tonys Chocolonely.“Brands need to appeal to the whole population,not jus

92、t the 10%15%who are passionate about the brands mission.However,you need to keep them onboard.If you lose your 10%,you become a company without a soul.”As they scale,purpose-led brands also face the challenge of moving to new sales channels.As start-ups,some purpose-led brands,such as snack maker KI

93、ND,find success within small,sustainable retailers.Others,like Who Gives a Crap,find early success with a direct-to-consumer model.Figure 12:Moving from start-up to mass market,purpose-led brands need to appeal to different audiencesNote:All percentages approximateSource:Bain Elements of Value consu

94、mer surveyUK,France,and Netherlands,June 2021(n=8,303)Environmentally and sociallyconsciousSeedingphase mission-ledinsurgentsAveragesegment sizeMission-ledinsurgentspast thechasmIncumbentsHealthconsciousQualityconsciousLifestyleconsciousBest valuefor money21%9%29%27%14%80%020%05%020%010%20%30%25%10%

95、15%10%30%30%10%20%15Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.Changing sales channels in stages can help start-up brands learn the ropes.KIND,for example,began in specialty retailers,then moved to convenience stores before graduating to

96、large retailers.Vita Coco,the coconut water brand that aims to improve the coconut farming industry,took a similar approach,first releasing its product in yoga studios and convenience stores before expanding to retail“natural”channels(such as Whole Foods),and then finally entering mainstream retail

97、outlets.Another key factor in mainstream success is consumer outreach.Vocal,opinionated,and transparent engagement has proven to support insurgent brand success,with honest and open communication across channels building brand trust and credibility.From their earliest days,successful purpose-led sta

98、rt-ups are relentless communicators.Authentic,honest,accessible engagement makes fans more loyal and invested in the mission.Communication has other benefits,too.It creates consumer inflection points,which are opportunities to drive behavioral change through education.For instance,Blueland uses its

99、platform to tell its audience about the number of single-use plastic bottles in the environment.The messaging fosters engagement,helps the environment,and increases sales.Most purpose-led brands employ a bold,humanizing tone that consumers respond well to.The advocacy-over-advertising message they u

100、se also generates genuine engagement and an outsized share of earned media.After using these tools to convince mainstream consumers to buy,educating them about the brands purpose deepens their loyalty.“Ninety percent of new products dont survive.Its really hard to establish a brand.”Industry expertI

101、nnocent,for example,gains consumer interest with its distinctive tone of voice.Its packaging emphasizes that it uses recycled plastic and aims to be carbon neutral,making consumers feel good about using the product and enhancing customer loyalty.A sustainable supply chain.In its earliest days,a purp

102、ose-led company chooses the issue at the center of its brand,and the brands supply chain also starts from this place of purpose.For example,Tonys Chocolonelys goal is to make all chocolate 100%slave-free,aiming to help the more than 1.5 million child laborers who currently work in cocoa.Similarly,Vi

103、ta Cocos goal is to enhance the lives of coconut farming communities.16Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.When their products are still niche,purpose-led brands can carefully construct supply chains that avoid unintended consequen

104、ces at every turn.Because they are still small,the capacity of their custom supply chains can keep up with product demand.But as these brands scale,they often run into two problems:setting up a sustainable supply chain at a reasonable cost(an issue mentioned by 48%of founders)and gaining access to e

105、nough sustainable material(mentioned by 29%of founders).For example,as Vita Coco moved toward mainstream retail,product demand outgrew its supply chain.For years,Vita Coco carefully curated a supply chain that consisted of ethical farms in Brazil.But the supply chains capacity was limited.Increasing

106、 demand drove it to look elsewhere for sustainable coconut water.“You need to invest early in getting the positioning and visual identity of your brand right.Simplify your consumer message to capture and translate the spirit of founders into something easily digestible for consumers.”Purpose-led bra

107、nd founderUnfortunately,some of its new suppliers did not meet Vita Cocos ethical standards.This created a dilemma,and the company had a decision to make.Should it source coconuts from farms with less-than-desirable practices to increase production capacity?Vita Coco chose to stay true to its purpos

108、e.But that decision came at a cost.In some instances,it needed to further delay capacity increases because it couldnt find factories with the right values.In other cases,it decided to work with those factories and farms to help them improve conditions through its Vita Coco Project.While searching fo

109、r new suppliers,Vita Coco also found factories in Asia where coconut water was thrown away as a by-product of coconut flesh(used for coconut cream,for example).This directly led to a reduction of food waste and helped farmers and factories make more money out of coconuts.Two new supply chain approac

110、hes can help companies scale production while staying true to their ESG mission:Work with existing major suppliers.Brands can scale their own supply chain by setting up a segregated supply chain within existing major suppliers.The Tonys Open Chain was created in partnership with chocolate giant Barr

111、y Callebaut to provide mass-market capacity while meeting Tonys Chocolonelys ESG goals for cocoa.The hybrid chain enabled Tonys Chocolonelyand other companies following in its waketo source ethical cocoa.By working with an existing large 17Purpose-Led Brands Can Reshape the Consumer-Goods Industry i

112、f They Can Scale Verlinvest|Bain&Company,Inc.supplier like Barry Callebaut,these companies gained direct access to scale,capital investments,and cost advantages.Create new,disruptive business models.Companies that create a novel,disruptive product have to work with suppliers to create sustainable pr

113、oduction capacity from scratch.This was the case for Blueland,whose cleaning tablets were unique.Since no similar product existed,it had to create a new supply chain.Through a trial-and-error process,it taught suppliers how to create the new product at a reasonable price.Notably,working with existin

114、g cleaning product manufacturers was key to providing a built-in capacity to scale.“Insurgents get more exposure as they grow,and they need to be prepared to answer any question on their sustainability across topics and proactively communicate transparently on the topic so journalists cant ask quest

115、ions.”Retail expertAs they grow,these brands also need to monitor whether the act of scaling impacts their sustainability.This turned out to be the case,for example,in almond milk production,which becomes increasingly water intensive at scale.As they grow,brands also need to monitor whether the act

116、of scaling impacts their sustainability.As purpose-led brands grow,more stakeholders become literally and figuratively invested in them.18Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.When sustainability challenges arise,radical transparency

117、 mitigates negative sentiment and can help companies explain the trade-offs often required in decision-making by purpose-led brands.This transparency is essential for both small and large purpose-led brands.It reinforces trust and loyalty among ESG-conscious consumers and helps to retain mass-market

118、 converts.Oatly is a model for this transparency.Not only did it challenge the status quo by including carbon emissions labeling on its products,it also spoke openly about its shortcomings.At the end of 2020,for example,it issued a post on social media,written in capital letters:“Read about why our

119、CO2 numbers are bigger than ever.”While the Oatly product still created fewer greenhouse gases than dairy milk,the company had not performed as well on emissions as it did the prior year as a result of temporary supply chain issues.In posting this message,the company acknowledged its shortcoming to

120、garner and protect consumer trust while also demonstrating that it was addressing the issue.“You need to put as much work into your values as in your mission.Values are what will ensure your purpose is lived on a day-to-day basis.”Founder,purpose-driven brandAs purpose-led brands grow,more stakehold

121、ers become literally and figuratively invested in them.Publishing performance against mission goals,as Oatly did,protects the brands relationship with its stakeholders.As companies grow,stakeholders expect them to act on a wide range of sustainability issues.Not all of these issues will reflect the

122、companys flagship sustainability purpose,which we call a“spike,”but addressing secondary ESG goals can act as“shields,”reinforcing the companys“good-for-all”messaging.An uncompromising sense of purpose.This drives them to innovate,disrupt markets,and win loyal fans.As brands grow,however,more employ

123、ees work for the company and control becomes distributed,making unilateral action more difficult.Purpose-led brands cannot let these challenges compromise the brands mission.They also need to embed their ESG purpose in the front line and across the organization.Doing so helps employees clearly see t

124、he relationship between the companys ESG goal and its long-term success.Purpose-led start-ups that scale successfully owe their success in part to their organization.Brands can empower their organization to stay committed and aligned with the brands purpose by:19Purpose-Led Brands Can Reshape the Co

125、nsumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.hiring employees who believe in the brands mission,which makes onboarding faster and motivates them to stay with the company longer;and avoiding layers of bureaucracy so that critical players can focus on preserving the trust the br

126、and has established with its core audienceKIND is an example of a brand that empowers employees to commit to the mission.KIND gives employees a stake in the company,asks each team member to think and act like owners,and encourages them to share ideas.Purpose-led brands also owe their success to thei

127、r founders.Through pride of ownership and ruthless commitment to purpose,founders model the energy that they rely on in their employees.Blueland CEO Sarah Paiji Yoo,for example,keeps a careful eye on the companys social media notifications.As conversations about the brand happen,she stays in tune an

128、d addresses any problems as they emerge.She also leads by example,sending a clear message that sustainability is an area of zero compromise and motivating her team and suppliers to share that mentality.One final organizational success factor underpins purpose-led brands as they transition from niche

129、 to mass market:an unyielding focus on what really matters to the consumer.Capturing and using consumer feedback is critical to creating such a focus.While many companies create feedback loops,too often the feedback fails to make it to the right places in the organization or simply goes nowhere.The

130、result:missed opportunities to refine messaging,improve a product,or foster loyalty.“When we filtered future employees on purpose,we saw hiring went more easily and onboarding and integration were faster.”Ashley Allen,chief sustainability officer at OatlyLearning systems prevent this problem,transfe

131、rring important lessons from consumers throughout the company and ensuring that feedback makes it to the employees who can use it to create positive change.An effective learning system helped KIND respond to emerging customer demand.When a new entrant in the healthy snacking market created a snack b

132、ar with less sugar than KIND bars,KIND recognized that this signaled consumer demand for products with less sugar.Instead of lowering the sugar content in the KIND bar by adding emulsions,it created new products:the KIND nuts and spices line.By creating bars that didnt contain fruit,the company lowe

133、red the amount of natural sugars 20Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.in the new product line.This innovative approach allowed the company to respond to consumer demand while still staying consistent with the companys nature-groun

134、ded brand.What incumbents can learn from successful purpose-led brandsInsurgent start-ups are not the only ones who can learn from these lessons in how to scale.Incumbents looking to enter this growing market can apply many of the same lessons to their own companies,although the application may look

135、 slightly different.Our research suggests four ways that incumbents can adapt the scaling lessons of insurgents:reviving their Founders Mentality,creating sustainable supply chains,defining their own core purpose-led mission(or“spike”),and considering mergers and acquisitions(M&A)as a path to purpos

136、e-led brands.Revive their Founders Mentality.In their infancy,many purpose-led insurgent brands inherently have what Bain calls the Founders Mentality.These companies eschew complexity and embrace higher degrees of risk and iteration.They focus on product quality and relentless customer service.They

137、 are fast,agile,and adaptable.Their employees are passionate about the company and its purpose.In most cases,the companies founders make these decisions intuitively.They are ready to act and eager to disrupt the status quo.And they do so by focusing only on the few things that matter most.Bain resea

138、rch finds that one of the differentiators for those small purpose-led brands that successfully grow to mainstream scale is that they preserve the Founders Mentality as they grow.Their sense of purpose is ingrained in everything they do.Companies that fail to do this and instead assign responsibility

139、 for purpose-driven goals to a specific person or departmentfor example,a sustainability directorate or ESG officeoften see their sustainability goals turn into a siloed afterthought.Bain research finds that one of the differentiators for those small purpose-led brands that successfully grow to main

140、stream scale is that they preserve the Founders Mentality as they grow.While small brands face challenges in scaling sustainably,incumbents face a“purpose bottleneck”as they figure out how to“green”an existing scaled supply chain.21Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They C

141、an Scale Verlinvest|Bain&Company,Inc.Employees in such companies are not motivated,energized,or rewarded by sustainability goals.Incumbents seeking to make a lasting transition to sustainability need to follow the example of successful insurgents,embedding a purpose-driven mindset into every functio

142、n,from supply to sales.The following steps can help incumbents retrofit their own organizations to match the models of insurgents:Install leadership role models.“If the leader shows that this is the most important thing to further grow and be successful,teams will quickly follow,”says one executive

143、at Reckitt Benckiser,a producer of health,hygiene,and nutrition products.Incentivize leaders(both senior and middle managers)to prioritize sustainability.Connect accountability for ESG with frontline goals.Sales,marketing,and business unit leaders should be accountable,and rewarded,for meeting susta

144、inability goals.Train employees on the companys purpose and ESG topics.Work cross-functionally on ESG issues and the companys related goals,as the company would with innovation or other cross-functional topics.Create sustainable supply chains.While small brands face challenges in scaling sustainably

145、,incumbents face a“purpose bottleneck”as they figure out how to“green”an existing scaled supply chain.They also face a threat from the growing success and greener supply chains of insurgent brands.Currently,56%of consumer products companies emissions come from their supply chains(see Figure 13),so m

146、aking a credible change in their sustainability position demands that incumbents find ways to rework their supply chains.of M&A in the past 10 years,and 60%in the past five years,have involved a sustainable angle.45%Aboutof an incumbents messaging and at least 100 social media posts per year should

147、be related to sustainability.20%Our research suggests 22Purpose-Led Brands Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.Of course,this is not a single mountain to climb.Converting an existing supply chain to be sustainable involves many changes,large and smal

148、l.Yet incumbent brands that dare to make disruptive changes can prove their commitment to ESG principles.Define their core purpose-led mission(or“spike”)and embed sustainability as a core message.As incumbent brands tackle the transition to sustainability,a shift in focus toward sustainability spike

149、s can help.Spikes are the topics that brands want consumers to care aboutthe topics for which they want their brand to be known and loved.Too often,however,incumbent brands tend to focus on shields,the topics that are more important to core stakeholders.Shields are often less ambitious than spikes a

150、nd tend to cover many different topics.But to really have an impact with consumers,companies need to focus on a simple message,typically with a maximum of two topics.Transparent and authentic communication can help incumbents avoid criticism of greenwashing and change consumer perception of their br

151、ands.Frequency of communication also matters:Our research suggests 20%of an incumbents messaging and at least 100 social media posts per year should be related to sustainability,yet many incumbent brands do not reach those levels(see Figure 14).Figure 13:56%of consumer products companies emissions c

152、ome from their supply chainNotes:Analysis of 22 consumer products companies with CDP emissions data;scope 3a(upstream)includes purchased goods and services,capital goods,fuel-and energy-related activities,waste generated in operations,business travel,employee commuting,upstream leased assets,other;s

153、cope 3b(logistics)includes upstream transportation and distribution as well as downstream transportation and distribution;scope 3c(downstream)includes processing of soldproducts,use of sold products,end-of-life treatment of sold products,downstream leased assets,franchises,investments,other Sources:

154、SBTi;CDP;company annual reports;company sustainability reports;Bain analysis020406080100%AverageScope 1:4%Scope 2:3%Scope 3a:56%Scope 3b:8%Scope 3c:29%3b:Logistics3c:Downstream3a:UpstreamWhen looking only atfood and beveragecompanies,67%oftheir emissions comefrom their supplychain23Purpose-Led Brand

155、s Can Reshape the Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.Use M&A as a path to purpose-led brands and to boost early ESG gains.Sustainable M&A represents a relevant and growing share of deals for incumbent companies.About 45%of M&A in the past 10 years,and 60%in the pas

156、t five years,have involved a sustainable angle.This growth reflects investor interest in the sustainable consumer products market and offers incumbents a way to jump-start their entry into purpose-led products.A new model for consumer productsAs the consumer products industry seeks ways to address t

157、he hidden health,environmental,and socioeconomic costs of its business model,a new generation of purpose-led brands offers a path forward,one that is increasingly marked by successful scaling efforts.These successful purpose-led brands offer excellent consumer value marked by radical transparency an

158、d clarity on trade-offs.They engage authentically with their consumer base about the issues those consumers care about.By doing so,they are adding value into their categories,offering a host of innovation and premium products at mass-market price points.Figure 14:Brands need to communicate sustainab

159、ility spikes more often,devote a higher share of voice to the spikes,and adapt communications for diverse audiencesNotes:Includes brands in food and condiment,confectionary,home care,and hot drinks segments;brands categorized as low when the percentage of ownedposts/comments about sustainability top

160、ics are below 20%,medium when the percentage of owned posts/comments about sustainability topics are above 20%or more than 100 posts or comments,and high when the percentage of owned posts/comments about sustainability topics are above 20%and more than 100 posts or commentsSources:NetBase social lis

161、tening analysis of global,UK,and US pages on Facebook,Instagram,and Twitter(JanuaryJune 2021);Kantar ad spend data(2020);Bain analysisPercentage of brands by level of communication on sustainability(JanuaryJune 2021)020406080100%IncumbentLowMediumHigh28Insurgent724Purpose-Led Brands Can Reshape the

162、Consumer-Goods Industry if They Can Scale Verlinvest|Bain&Company,Inc.At the same time,they are changing supply chain models,with a willingness to collaborate where they can while also challenging old,unsustainable models.And they offer agile work environments marked by test-and-learn approaches and

163、 motivated teams of employees eager to give their all to make a difference in the world.Despite the economic headwinds and supply chain disruptions the consumer products industry faces today,companies of all sizes have an opportunity to see a significant valuation reward while tackling some of the w

164、orlds most significant problems.For more information,visit Bold ideas.Bold teams.Extraordinary results.Bain&Company is a global consultancy that helps the worlds most ambitious change makers define the future.Across 64 offices in 39 countries,we work alongside our clients as one team with a shared a

165、mbition to achieve extraordinary results,outperform the competition,and redefine industries.We complement our tailored,integrated expertise with a vibrant ecosystem of digital innovators to deliver better,faster,and more enduring outcomes.Our 10-year commitment to invest more than$1 billion in pro b

166、ono services brings our talent,expertise,and insight to organizations tackling todays urgent challenges in education,racial equity,social justice,economic development,and the environment.About VerlinvestVerlinvest is an international,family-backed evergreen investment company.It partners with vision

167、ary entrepreneurs who are driving consumer revolutions and building the next generation of category-defining brands that will positively impact the consumer sector for many years to come.Established in 1995,with offices in New York,Brussels,London,Mumbai,and Singapore,Verlinvest focuses on growth-stage companies in FMCG,healthcare,and digital retail.