Cereal Killas: Snoop Dogg and Master P's Retail Rumble
In the intricate interplay between celebrity and commerce, transitioning from entertainment mogul to entrepreneurial powerhouse is fraught with challenges. Snoop Dogg and Master P, icons of the hip-hop world, recently found themselves at the center of a legal battle with retail giant Walmart and cereal behemoth Post Cereal.
This battle underscores the complex dynamics of entering the retail consumer products industry — a challenge not diminished by celebrity status. However, this case is particularly instructive because this challenge mirrors struggles they once faced, and eventually solved, in their own music careers.
Backstory: A Look at the Numbers
In 2022, Snoop Dogg and Master P ventured into the consumer goods space with the launch of Snoop Cereal under their Broadus Foods banner (Fans of Master P will note that he was already very familiar with the CPG game as owner of the highly successful snack brand, Rap Snacks). The duo entered a partnership with Post Cereal for production and distribution, facilitated by retail placements through Walmart. Initial agreements were promising, projecting wide distribution and favorable shelf placement crucial for competing in the $8 billion U.S. breakfast cereal market.
However, the partnership soured, leading to allegations from Snoop and Master P that Walmart and Post Cereal conspired to limit their product’s visibility and availability. They claimed that Walmart's systems reported Snoop Cereal as out of stock despite its availability, allegedly stifling sales and market penetration.
From Beats to Business: Master P and Snoop’s Musical Blueprint
As a long-time hip-hop fan, first exposed to the banging beats of Snoop Dogg and Master P in the early '90s while a student at Morehouse, I've closely followed their careers. Ironically, lyrics from their tracks, like Snoop’s from "Serial Killa" — "Walk with me, hold my hand and let me lead you / I'll take you on a journey, and I promise I won't leave you" — would probably make for a great musical introduction to this post.
Master P’s trailblazing path as an independent artist laid the groundwork for today’s SoundCloud approach to distribution. He understood early on that traditional record label and distributor relationships prioritized company profits over artists’ financial well-being. By establishing his own label and distribution network, Master P shifted the profit paradigm, empowering artists to reap more substantial financial rewards from their work. Snoop Dogg, and others, followed suit, creating a blueprint for artist independence that revolutionized music distribution.
Parallels in the Retail Cereal Category
Transitioning these strategies from music to retail, however, presents unique challenges. In the music industry, creating an independent label might parallel establishing a retail distribution network, but the barriers to entry in retail are considerably higher. Walmart and Post, similar to major music distributors and record companies, have entrenched relationships designed to manage the cereal category's growth meticulously. For them, relinquishing prime shelf space to a new player, even one backed by hip-hop royalty, contradicts their established business model aimed at maximizing profitability and maintaining control.
How is Retail Shelf Space Awarded?
Historically, retailers charged brands slotting fees—a direct payment for securing shelf space. This practice has been largely phased out in many markets due to legal restrictions and ethical concerns. As a result, retailers and brands have had to become more creative in their approach to managing shelf space. Instead of slotting fees, retailers might now rely on comprehensive sales data and market trends to make decisions, ensuring that only the most profitable and popular items occupy the best spots.
Today, the terms of engagement between retailers and brands have evolved. Nowadays, retailers might negotiate for higher profit margins, requiring brands to lower their wholesale costs, which in turn can influence how much shelf space a product receives. Promotional funding also plays a critical role; brands that offer financial support for sales promotions or agree to fund in-store marketing efforts are more likely to secure favorable shelf positioning. Additionally, contributions towards external marketing efforts, such as social media campaigns and other advertising, can sway retailers who want to ensure products have sufficient consumer awareness and demand to justify their shelf presence.
These dynamics just confirm that while the barriers to entry in retail are high, the strategies for overcoming these barriers are multifaceted, involving not just financial negotiations but also comprehensive marketing strategies that align closely with the retailer's goals and the target market's preferences. Such complexities parallel the intricacies of launching an independent label in the music industry, where visibility and access to distribution channels can make or break an artist's commercial success.
Recommendations for Brand Owners
To navigate these retail challenges, celebrity-owned brands are uniquely positioned to challenge these dynamics. Here is how brands might consider strategies akin to those used by independent music artists:
Develop Independent Distribution Networks: Just as artists might launch their labels, celebrities could explore establishing or acquiring retail chains, creating a direct-to-consumer pipeline that bypasses traditional retail gatekeepers. Significant food deserts exist across the urban US landscape, presenting multiple market opportunities for entry.
Acquire Stakes in Existing Entities: Similar to investing in or starting their record labels, celebrities could buy significant shares in existing retailers or collaborate closely with them to gain influence over product placements and marketing. How many rappers own Walmart or Target stock?
Secure Leadership Roles: Following the example of Pharrell Williams at Louis Vuitton, securing executive positions within major brands or retail chains can offer deeper insights and control over market strategies. Why isn't Oprah's Favorite Things a permanent section in a retail chain store?
Leverage Diverse Consultants: Celebrities should enlist advisors who reflect their audience’s demographics and understand cultural nuances, ensuring the brand resonates authentically with its target market. If you are trying to sell more products to POC, it would help to actually hire people of color for some of the work.
By applying lessons from their music career successes to the retail sector, Snoop Dogg and Master P (and the slew of other celebrities pouring into the CPG space), can better navigate the complex dynamics of retail distribution. For other celebrities considering similar ventures, understanding these parallels and preparing strategic countermeasures is crucial. Just as they revolutionized music distribution by stepping away from traditional models, a similar transformation in retail may be necessary to overcome entrenched market barriers and truly succeed on their own terms. Your fans are waiting...
Comments