Thoughtfully supporting brands in the CPG sector requires an observant eye from an investor to be able to recognize “silent achieving” brands. These brands have managed to carve out a unique space for themselves, serve the needs of their unique community, and prove to be authentic in their promotional efforts. These are companies that may not dominate the headlines, but have often cultivated a dedicated fan base on social media and significant cultural influence, especially in niche markets. Retail investors should try their best to regularly monitor social media to look for patterns of consistent engagement in a niche market and understand the community that a brand serves. Consider unconventional indicators of success, such as cultural influence and community engagement. Sales figures are important, but they only give us an indicator of how the company is performing in a snapshot in time. These metrics are not always indicative of future success of a brand, and certainly shouldn’t be the sole aspect of one’s diligence process.
THE VALUE OF TRUE AUTHENTICITY
According to data from EY, Gen Z respondents reported that authenticity is more important than any other personal value tested. When considering the long-term strength of a brand, consider how “authentic” their existing brand partnerships feel. Does the content the brand put out feel authentic? Are they showing true resonance with their target audience? What about the culturally relevant or celebrity figures they align their promotion efforts to—are these celebrities that feel truly “authentic”?
A niche brand’s true strength lies in its ability to cater to the specific needs of a community with true authenticity. This approach transforms customers into loyal fans, and in some cases evangelists. These fans feel connected to the brand because they are the ones that have helped create it! The challenge for investors is that the impact of these brands is not always visible through traditional market analysis involving sales volume, ROI, and other numbers on a spreadsheet. Instead, understanding the dynamics of a niche and the cultural resonance of a brand requires a deeper, more nuanced and emotionally intelligent approach.
Dive into the community that a brand serves. What are their needs, preferences, and values? Is the brand catering to these needs and, if so, how? A brand that aligns closely with its community’s identity is more likely to maintain a loyal customer base. For example, if one of the brand’s values is lightheartedness, fun, and humor, their social media presence, look, feel, messaging, and partnership efforts should all reflect that.
Recognizing a genuine connection between the celebrity’s persona and the brand’s values can enhance credibility and attract new customers well beyond the niche they currently serve, but make sure that partnership is authentic or risk losing loyal fans.
THE POWER OF COMMUNITY IN NICHE BRANDS
Niche brands have the unique advantage of addressing the particular needs and preferences of a specific consumer base. This focused approach allows them to establish a strong connection with their audience, turning customers into passionate advocates. For retail investors, recognizing these brands involves looking beyond surface-level metrics and delving into the community and cultural engagement that these brands foster.
One effective method to gauge the influence of a niche brand is through social listening. Platforms like TikTok and Instagram offer invaluable insights into how brands are perceived and engaged with by the public. A lesser-known product that consistently generates buzz and engagement on social media can indicate a brand’s substantial cultural influence and potential for growth.
Dive into the community that a brand serves. What are their needs, preferences, and values? Is the brand catering to these needs? A brand that aligns closely with its community’s identity is more likely to maintain a loyal customer base. As noted, if one of the brand’s values is lightheartedness, fun, and humor for example, their social media presence, messaging, and partnership efforts should reflect that. A great example of an established brand doing this right is Ben & Jerry’s.
This brand has built a robust identity around not just offering high-quality ice cream but also fostering community engagement, activism, and social justice—which align with their brand values and the values of their audience—all while maintaining a sense of fun in their messaging and branding efforts.
THE ROLE OF CELEBRITY ENDORSEMENTS
A well-chosen celebrity partnership can serve as a bridge, introducing the brand to a wider audience without diluting its niche appeal. The key here is to make sure that the celebrity has an authentic connection with the brand—i.e., the partnership is congruent and makes sense, as opposed to bringing in a celebrity endorsement just for the sake of it. If you’d like to maintain the loyal fanbase that the brand has built up, it’s a must that the celebrity is part of or resonates with the niche community they serve.
Keep in mind that in 2024, depending on the age of your audience and the products you sell, a social media influencer can be just as good or better than an A-list celeb when it comes to partnerships. 80% of Gen Z women, for example, indicate that influencers are their most trusted source for beauty recommendations.
For investors, a public figure’s association with a brand can also be a signal of its potential to transcend its initial market boundaries and achieve broader relevance and success, as long as the original community appeal of the brand is respected.
Silent achievers in the CPG sector offer unique investment opportunities for those willing to look beyond traditional metrics and understand the cultural and community dynamics driving brand success. By focusing on niche CPG brands that resonate deeply with their audiences and effectively leverage relevant, strategic partnerships, retail investors can uncover potential gems in the crowded marketplace.
Samyr Laine is an investor, Olympian, brand builder and operator with a background in sports & entertainment. He is currently Managing Director and GP of Freedom Trail Capital, former SVP of Operations & Strategy at Westbrook, and former Senior Director of Operations at Roc Nation. Prior to working on celebrity ventures for Will & Jada Pinkett Smith (at Westbrook) and JAY-Z (at Roc Nation), Samyr worked in the sports industry at Major League Soccer and Monumental Sports & Entertainment. He also finished 10th at the London 2012 Summer Olympics in the triple jump representing Haiti after getting degrees from Harvard, Georgetown Law, and The University of Texas. https://www.freedomtrail.capital/
