Key Benefits of Food and Beverage LTOs
Limited-time offers (LTOs) have become an invaluable tool for CPG food and beverage companies. Walk through the grocery store aisles with LTOs on your radar, and you’ll start to find them everywhere. Breakfast cereals, bars, snack cakes, confections, chips, RTD beverages, and even yogurts, have grabbed this opportunity.
The key benefits of introducing LTO foods and beverages into the market are:
- Creating brand excitement to keep current consumers engaged
- Creating brand awareness to attract new consumers
- Increasing or maintaining shelf space
- Increasing sales
- Testing out a new product for permanent inclusion in the brand portfolio
Line extensions work in much the same way as LTOs except without the sense of urgency that an LTO generates. When an LTO really connects with consumers—especially a new flavor or more convenient pack size—the sales will show it. Line extensions are often born from successful LTOs.
Best Practices for Creating a Winning LTO
Here’s a look at the secrets of success for creating an LTO.
1. Asking if the proposed product is aligned with the brand and yet brings something new
It’s important that the new product fits with the brand (including its philosophy, voice, and target consumers), while offering a benefit that the current products don’t. This will reinforce the brand overall and minimize cannibalization.
2. Early cross-functional team collaboration
Having someone from the marketing, R&D, packaging, purchasing, and operations departments meet together early on allows all ideas to be heard, minimizes time wasted, and ensures all departments will be working toward the same goal.
3. Using technology to measure effectiveness and maximize returns
Data collection and careful analysis can help companies discern whether an LTO campaign should have lasted longer or ended sooner, as well as which stores and geographical regions were most effective at reaching consumers. And, of course, it can show if a product is a winner.
Don’t Miss These LTO Opportunities
It can be easy to think of LTOs as seasonal only—such as autumn-time pumpkin spice lattes or 4th of July cookies in red, white, and blue, —and miss the bigger picture. LTOs provide a singular opportunity for companies to grab consumers’ attention and demonstrate how this LTO can make their life better.
Since there are many ways a product can make someone’s life better, there are a number of possible approaches to creating LTOs. An LTO food or beverage product can be:
- Holiday or seasonal – tastes and colors associated with certain times of the year
- A new flavor – for example, featuring a trending ingredient or popular ethnic flavor
- A variety pack – as a low-risk opportunity for consumers to explore different flavors
- Part of a charity campaign - such as pink packaging for breast cancer awareness
- In a more convenient package size - including portable, bite-size, and 100-calorie packs
- In a package with new graphics - such as trending cartoon characters for children’s products
Holiday and seasonal LTOs touch upon consumers’ emotions and evoke nostalgia, as well as address the practical need for festive foods and beverages for holiday parties. A new flavor or variety pack LTO can make a consumer’s life better by providing a culinary adventure that puts the fun and excitement back into a favorite brand.