DTC CPG brand Magic Spoon enters traditional grocery space
Magic Spoon, a cereal brand viewed as a niche category solution associated mainly with social-media influencers, is going mainstream. The cereal maker, whose product fits into the better-for-you space, charges almost three times the price of a standard box of cereal, but its cereal will now grace the shelves of Walmart, Kroger and Albertsons. The brand will also expand to more Target locations after debuting at the retailer last summer.
Magic Spoon’s business model and product features and benefits align with current hot topics in the retail industry: consumer well-being and direct to consumer (DTC) brands searching for growth through traditional retail channels.
Magic spoon is a prime example of a DTC brand entering the traditional space, but this trend hasn’t been as pervasive in CPG as it has in general merchandise. The shaving category in particular has found a sweet spot in transitioning from selling direct-only to selling through drug retailers and mass merchants. But, foods haven’t had as many DTC players enter the market, and those that do tend to be more on the fresh side of grocery, such as meal kits or pet food.
With shelf-stable products, like cereal, there needs to be a larger call to action for consumers to take notice and make the switch from a trusted brand, especially with brands like Magic Spoon selling at a premium.
Magic Spoon’s value proposition is positioned around its higher protein count per serving and lower sugar content. Consumers continue to be focused on physical well-being and making healthier choices in the post-pandemic period, according to a recent Statista survey. Half of U.S. consumers' New Year’s Resolutions were focused on eating healthier, while 40% were focused on losing weight. Magic Spoon’s cereals feed directly into this consumer behavior and present an opportunity for traditional retailers to lean into consumer needs.
What new CPG categories will grow their DTC presence? And how will retailers find ways to creatively add them into their assortments?