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September 16, 2019 | 4-minute read (732 words)
We’ve all heard of entrepreneurs that initiated their early funding rounds via crowdfunding platforms and made it big. Oculus Rift and Cards Against Humanity got their start via Kickstarter, while SkyBell and MVMT began on Indiegogo. But although we may equate crowdfunding campaigns with startups, the reality is that established firms have begun using these platforms as an effective way to perform product testing as well.
In particular, several big food companies have recently launched campaigns via crowdfunding, which appear to be more for market testing and research than for actual fundraising. What’s important, these brands are finding, is that they are able to see who is willing to buy their product before they invest in a broad launch. This is more valuable than a focus group, where participants may say they are interested in something – but to have tangible sales results from a crowdfunding test allows them to drive innovation with concrete insights in mind.
Check out the following examples of well-established food and beverage companies that crowdfunded to get some ideas on how you can use these platforms to your benefit.
The beverage behemoth is known for investing tremendous time and funding into its product testing, but when it planned to evaluate whether its European mineral water brand Valser would succeed in the US market, Coca-Cola turned to Indiegogo. The company offered fans an opportunity to purchase glass bottles of the drink and provide their opinions of it last August, and the program was a success.
“Given how rapidly consumer tastes are changing, our team is challenged with taking risks, testing, iterating and cycling through ideas quickly to see what works,” said Coca-Cola’s Dave Preston at the time. “We saw Indiegogo as an opportunity to quickly get Valser out there and see if there is a demand.”
As a result of the campaign, Coca-Cola was able to get in-depth feedback about Valser from the community, and the company was so pleased with the outcome that it is considering similar test runs with several other brands.
The poultry-focused brand decided to debut its new snack line Yappah on Indiegogo with four flavors last year – and when it came time to introduce a new variety, the company turned to Kickstarter for further testing. After hoping to hit a pledge goal of $2,500, Tyson saw interest soar, bringing in a total of $11,674 from 440 backers.
“Indiegogo is a great channel for testing since consumers on the platform are known for being early adopters of new to the world ideas and products,” said Tyson’s Santiago Proaño, brand lead for Tyson’s Innovation Lab, about its initial launch. “We want to connect directly with this enthusiastic community that cares about creating better food. Their reaction to the product, and their engagement with us, will help us get ready for what we hope will be a much broader rollout.”
Following the successful crowdfunding campaigns, Tyson then brought the Yappah brand to Amazon Fresh. The launch was so smooth that Tyson recently announced plans to launch a second brand, Pact Bites, via a crowdfunding platform in the near future.
Not every big company that’s using crowdfunding is doing so for market research testing – in the case of beer brand Heineken, its Indiegogo program had the goal of raising awareness for its historic preservation plans.
As part of the campaign, Heineken selected 10 US sites in need of restoration, and then asked fans to donate funds toward the projects. Those who engaged with the brand via $150-plus donations received tickets to see musician Bruno Mars in concert. The Indiegogo campaign not only allowed Heineken to demonstrate its commitment to a good cause, but also helped the firm share in the spirit of generosity with its fans.
“It’s not about just writing a check to fulfill a project,” said Heineken’s Bjorn Trowery. “We want to raise a glass to the folks who have poured their heart into helping get these projects off the ground by providing the awareness and resources they need to get them to the finish line.”
No matter how big or small a brand may be, market research and exposure are critical, and go far beyond the funding stage. Every business can benefit from real-time feedback from those who use the products and services, and crowdfunding is one avenue that can offer that.