Why Brands and Consumers Love Erewhon

Boutique markets benefit both sides

We’ve been talking a lot about AI lately, particularly how AI will reshape our shopping behaviors, brand building, and advertising.

But today, we’re getting back to our consumer brand roots to talk about something I’m fascinated by (don’t worry, more AI in future editions).

Let’s talk about those overpriced, boutique, health-focused markets.

I know that was a mouthful, but I wanted to paint a clear picture. I’m talking about places like Erewhon (LA), Happier Grocery (NYC), and Pop Up Grocer (NYC).

Still not familiar? Think of it like this: all the expensive brands at your local grocery store (like that $15 jar of tomato sauce) are housed under the same roof. These brands tend to have buzzy, aesthetic packaging, with taglines like “better-for-you”, “seed oil-free”, and “locally sourced”.

And these markets tend to exist in high-wealth concentrated areas, close to major cities such as New York City or Los Angeles. The owners of these markets are tastemakers; they carefully place the challenger brands of tomorrow on their shelves. You won’t find Coca Cola or Pepsi here, but you will find Poppi or Olipop.

Believe it or not, I make a point to visit Happier Grocery or Pop Up Grocer once a month to walk the store and observe which brands are taking up shelf space, as well as track packaging and ingredient trends. I’m a student of the consumer brand game, and I enjoy doing homework.

I’m always intrigued when I walk into these boutique markets as I start to feel different. Between the sleek, aesthetic flow of the store and the plant arrangements (thinking of Happier Grocery specifically), you feel like you’re someplace exclusive. You see all the trendy juices, adaptogens, and protein powders laid out like a health-conscious candy store.

A boutique market shopper is sophisticated, prioritizes what goes into their body, and has the disposable income to choose healthier, cleaner products. They view the extra cost (compared to Wegmans or Trader Joe’s) as an investment in their health, so of course they would pay extra.

Taking a trip to a boutique market is a more emotional grocery shopping experience than strolling into Trader Joe’s. You’re likely to find brands and products you aren’t going to find anywhere else, all emphasizing health and wellness. These markets make you feel healthier when you walk out, even if all you do is gawk at a 1.5-ounce vitamin C shot for $8.

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As a growing consumer brand, there are countless shiny objects to chase in the name of growth. Let’s dive into why a CPG brand should prioritize selling into a boutique market over other growth opportunities.

First and foremost, getting your product on the shelf at a boutique market is a signaling win. Because of the investment that these boutique markets make into their store experience and the strict standards of the products they stock, being associated with a boutique market instantly adds credibility to your niche.

Launching into a boutique market like Erewhon is a great opportunity to tell your brand followers and email list subscribers about this exclusive club membership. You can add a logo to your website (think “you can find us at…”) or mention the product launch in your digital advertising content. People want social proof before trying your product for the first time (especially if it is something they are going to eat or drink or put on their body). So even if the deal with a boutique market doesn’t make much money from an order volume perspective, you have plenty of opportunities to spin it into a brand awareness win, which should improve other sales channels’ performance.

Next up, there’s the customer acquisition play. When you’re running advertisements online via Meta or Google, it can be difficult to target the exact type of customer you would like (thanks to the iOS 14 update that requires iPhone users to opt into app tracking). However, since boutique pricing is high-end, you’re reaching shoppers, you’re reaching shoppers who already have the propensity (and the wallet) to buy. Struggling to hit competitive pricing because your costs are too high? Well, look no further than selling in a boutique market. I don’t know if Erewhon shoppers even know what inflation means.

Boutique markets give you an opportunity to introduce your brand to a shopper who’s less price-sensitive. And with effective brand marketing, you can look to transition them to an owned customer via your direct-to-consumer website. View boutique markets as a customer’s entry point to your brand.

Side note: boutique order volume is rarely a needle-mover. You’re much more likely to see a large jump in sales growth out of traditional retail relationships like selling to Target or Whole Foods. However, boutique markets offer an opportunity to be seen by all kinds of shoppers, some of whom may be buyers at retail companies. If the Target condiments buyer sees your flashy hot sauce in a boutique market, they could reach out and ask to stock the product in Target as well.

Furthermore, entering a boutique market gives a brand a low-stakes experience of working with a retailer. It’s the dream of most consumer brands to have their products on the shelves of a store like Target or Walmart, but it’s critical not to engage in these relationships until your company has the necessary operational structure. Selling into a retailer isn’t as straightforward as shipping products from your home to customers via Shopify.

Working with a retailer involves many months, if not years, of sales pitches and large purchase order commitments (a real cash drain), and an efficient supply chain to meet the constantly changing demands of a retailer.

Starting small with a boutique market is a wise way to test the waters of selling in stores. Learning how to manage inventory and relationships without owning customer data (i.e. direct-to-consumer) is invaluable. It’ll prepare you for the moment that big-time retailers come calling.

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Next time you’re strolling downtown, wander into your local boutique market. You’re bound to feel healthier when you walk out, whether you buy something or not. And that feeling? That’s the brand magic.