The best products and businesses solve problems otherwise left unaddressed. Customers and owners win as a result. Vidalias onions provide this week’s example of a business model innovation with the potential to solve an important problem.
Any mother can speak eloquently about the challenges of getting her child to eat healthy foods, with vegetables the most daunting. Yet, sales of Vidalias onions are way ahead of last year’s numbers – because of kids.
A savvy campaign involving Shrek, a beloved ogre staring in Dreamworks’ films of the same name, deserves the credit. The onions are displayed with pictures and a giant blow-up of Shrek in the grocery store, complete with recipes like Swampy Joes. Kids, according to the June 28, 2010 Wall Street Journal, are clamoring for Moms to buy Vidalias onions and cook the meals that Shrek and his friends enjoy.
What’s good for kids is good for the onion business. Victory, at last, exclaims this Mom.
I hope Kraft and other packaged goods companies are paying attention. Packaged food companies are facing enormous pricing pressures from a consolidating customer base (Walmart, Target and regional chain grocers). Furthermore, retailers can easily backward integrate into copycat versions of branded goods products thanks to the existence of private label food manufacturers. Net result: Kraft and its competitors are stuck in commodity-market quicksand. They keep cutting costs to maintain earnings expectations, a non-sustainable business situation.
The food companies that help parents raise kids with healthy eating habits will build brands that matter to parents. More and more parents are willing to switch purchases (from other food to onions) and pay a premium price (Vidalia versus generic onions) for this value-add. When will companies wake up?
What can your business do to solve an important social or environmental problem otherwise unaddressed?
For insight on business model strategy, read my recently released book, Beyond Price.