5 Things You Need To Create a Successful Food or Beverage Brand

An Interview With Martita Mestey of Authority Magazine

As appeared in Authority Magazine in March 2024:

Martita: As a part of our series called “5 Things You Need To Create a Successful Food or Beverage Brand”, I had the pleasure of interviewing Paul Nelson, Managing Director, Method1.

Paul Nelson serves as the managing director of Method1, an agency that specializes in creating human-centric marketing ecosystems for CPG indulgence brands. These ecosystems, which are rooted in behavioral science and supercharged by creativity, build emotional connections between people and brands, driving success in the marketplace. With three decades of marketing and brand-building experience, Nelson has played a role in the success of notable CPG brands that include Elijah Craig and Evan Williams bourbons, Jack Daniel’s, Ocean Spray, Hershey’s, Sam Adams and Cape Tide Hard Tea. Method1 comprises a diverse team of 50+ marketers distributed in 12 countries around the globe and operates as an independent company under XenoPsi Ventures which has been named to the Inc. 5000 list of fastest-growing private companies for both 2022 and 2023. Previously, Nelson held the position of executive vice president and managing director at Arnold Worldwide.

Thank you so much for doing this with us! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a bit about your “childhood backstory”?

Paul: I’ve always been passionate about art and photography, even from a young age. I excelled in art class, loved photo safaris and even won a few blue ribbons at the Minnesota State Fair when I was a kid. In the end, however, my enthusiasm didn’t quite match my talent. I just wasn’t very good at it. Fast-forward to the start of my career in marketing and advertising. It felt like I rekindled that passion for art I had when I was younger, only this time through the lens of business. I was drawn to the idea that solving a brand’s real-world business problems takes a high level of creativity, and I knew that this was the path for me.

Martita: Can you share with us the story of the “ah ha” moment that led to the creation of the food or beverage brand you are leading?

Paul: One of the companies we’re currently helping to bring to market is an upstart challenger brand called Cape Tide Hard Tea. The founders are a group of young entrepreneurs who originally set out to make a craft beer. After endless test batches, they just couldn’t get the product to a place where they were happy, so they decided to pivot to hard seltzer. Again, they ran into challenges in making a product that people would want, not to mention the market was already saturated with hard seltzers. After two failed attempts, you’d think they’d throw in the towel. However, being determined, they kept working and their “ah-ha” moment came when they recognized there was opportunity in the spirits-based tea category. So they pivoted a third time, this time hiring an outside flavor consultant, and developed a vodka-based tea that tasted great. They partnered with my firm to develop their name, logo, branding and packaging and we successfully introduced Cape Tide Hard Tea to the market for a lucrative summer launch. We went from concept to full product launch in just five months. My “ah-ha” moment was when I saw that it was possible to bring a product to market with remarkable speed when you don’t over-analyze every obstacle along the way.

Martita: What are the most common mistakes you have seen people make when they start a food or beverage line? What can be done to avoid those errors?

Paul: Successful brands balance short-term sales-driving tactics with long-term brand-building efforts. However, many young brands make the mistake of solely focusing on short-term gains. While it’s crucial to drive immediate sales and ROI, studies prove that over-indexing on performance can hinder long-term growth compared to brands that prioritize brand building. A recommended approach is to allocate 60% of resources to brand building and 40% to sales activation. While start-ups may skew this ratio more towards short-term tactics, the lesson is to not neglect brand building in pursuit of weekly sales goals.

Martita: There are many invention development consultants. Would you recommend that a person with a new idea hire such a consultant, or should they try to strike out on their own?

Paul: Bringing a new product to market should be considered a team sport, and hiring the right outside consultants or agencies is like assembling an all-star lineup. These experts offer invaluable insights, skills, and industry knowhow that can make all the difference. Their ability to see things objectively helps spot blind spots and ensures decisions are based on facts and what works best, not just personal biases. At Method1, our work is rooted in behavioral science, which is why we’re a founding partner of the Consumer Behavior Lab. Its mission is to figure out how behavioral science can make media and marketing better. In today’s world, I’d go as far to say that teaming up with outside experts isn’t just a good idea — it’s critical for success.

Martita: Many people have good ideas all the time. But some people seem to struggle in taking a good idea and translating it into an actual business. How would you encourage someone to overcome this hurdle?

Paul: There are countless factors that go into turning an idea into a successful business, but one of the key drivers is gaining early traction with consumers. In general, we know that people are more attracted to larger brands. So how does an upstart brand find momentum when it can’t compete with the marketing budgets of its larger competitors? Behavioral science gives us one answer with the principle of social proof. Social proof tells us that people are more likely to do something if they see other people doing it. The Red Bull “empty can” campaign is a great example of leveraging social proof. When it was first introducing the brand in the UK, Red Bull placed empty cans in crowded public areas, such as garbage cans outside clubs or on college campuses. It created the illusion that Red Bull was the most popular drink on the market, making people more likely to want to try it for themselves. It also had the added benefit of creating mystery and allure — What was so special about this drink that everyone was drinking it? It was a brilliant campaign that increased Red Bull’s market share with limited resources.

Martita: What are your thoughts about bootstrapping vs looking for venture capital? What is the best way to decide if you should do either one?

Paul: Whether you bootstrap or seek venture capital, alignment on the definition of success between you and your partners — both internal and external — is critical to avoid derailment. Launching a physical product often requires external funding for essentials like product development and consumer research, while professional services companies can opt for a bootstrapping approach. At our parent company, XenoPsi Ventures, we’ve chosen to bootstrap all our ventures, allowing us to maintain full control and make autonomous decisions that always align with our overall vision.

Martita: Can you share your ideas about how to create a product that people really love and are ‘crazy about’?

Paul: While we’d like to think that people make decisions based on the features and benefits that we as product developers and marketers spend countless hours perfecting, it’s simply not the case. People don’t make decisions based on rational attributes. Instead, 80% of decisions are made by System 1 thinking — the emotional part of the brain. This is where people fall in love with your brand. Look at the success of Liquid Death. It’s simply water. But instead of talking about the rational benefits of staying properly hydrated and that it comes in a recyclable can when all its competitors come in plastic bottles, the brand instead focuses on “murdering your thirst,” which is a highly emotional proposition for their target audience of teenagers, heavy metal rockers, energy drink and beer consumers.

Martita: What are your “5 Things You Need To Create a Successful Food or Beverage Brand” and why?

Paul:

1. Make your product taste great but look even better. The ‘tasting great’ part goes without saying. But often brands don’t give enough attention to how their product looks in advertising and communications. We refer to it as “lick the screen good” — where the sight of a beverage can with perspiration running down the side or a mouth-watering piece of pizza on the TV or computer screen– is so enticing that you can’t resist trying it. After all, a little indulgence is something of a necessity in people’s lives in order to bring moments of joy and happiness to each day.
2. Innovate around trial. If you’ve done #1 well, creating innovative ways to entice new consumers to try your product will be a sure-fire way to ignite sales. Loss aversion, a concept in behavioral science, means that people hate losing things more than they like gaining them. When it comes to trying a new product, this means that people might hesitate because they’re worried about wasting their money on something they won’t like. To help overcome this fear, offering things like free trials and money-back guarantees can make people feel more comfortable giving the product a shot.
3. Focus on your storytelling. Amidst the swirl and popularity of hyper-targeting, studies show that great creative and strong branding remain the key drivers of incremental sales. Consumers make decisions with their hearts not their heads, and brands that master the art of storytelling with a strong emotional pull will win every day.
4. Stay consistent and be persistent. The goal is to build top-of-mind awareness, ensuring that when a consumer considers purchasing something in your category, your brand is the first that comes to mind. Develop a small set of distinctive assets for your brand and reinforce them over and over again. We find that fluent devices — characters, mascots or jingles — are a lost art in marketing these days. M&M’s uses this technique exceptionally well and studies demonstrate that fluent devices are highly effective at driving brand recall without the need for expensive celebrity endorsements.
5. Cultivate a community. Having a dedicated group of brand enthusiasts fosters loyalty, encourages word-of-mouth referrals and drives revenue. By tapping into the desire for social connection and shared interests, communities strengthen the bond between individuals and the brands they love. For one of our clients, we nurture online whiskey communities through expert interviews, product reviews, blogs, and podcasts, positioning our clients’ brands as leaders in the bourbon culture.

Martita: Ok. We are nearly done. Here are our final questions. How have you used your success to make the world a better place?

Paul: One of my proudest achievements is leading the “Truth” anti-smoking campaign for over a decade. Despite efforts like smoke-free bars and restaurants and increased cigarette taxes, 1200 people were still dying every day from smoking-related diseases. ‘Truth’ was a brand that stood out from other public health campaigns by embracing rebellion, appealing specifically to teenagers as a way to prevent them from picking up a cigarette in the first place. Instead of the typical public health message of ‘don’t smoke,’ which was easily being tuned out, we exposed how big tobacco manipulated kids with deceptive tactics, fostering an emotional connection to their need for independence and rebellion. The campaign was incredibly successful, being credited with preventing millions of kids from starting to smoke and resulting in hundreds of thousands of lives being saved. A marketing campaign doesn’t often lead to saving lives. But in the case of “Truth,” that was the final outcome.

Martita: You are an inspiration to a great many people. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger.

Paul: Including small indulgences in your daily routine is a surefire way to boost happiness. Instead of fixating on calorie counts, focus on the feeling these indulgences bring — whether it’s a burst of energy, a break from the mundane, or a well-deserved reward for your accomplishments. These moments of pleasure provide much-needed breaks from the hectic pace of daily life and serve as reminders to prioritize self-care and add joy to each day.

Martita: Thank you for these fantastic insights. We greatly appreciate the time you spent on this.