strategic innovation trends in fmcg - 2016
TRANSCRIPT
Consumer Goods Strategic Trends // CAGNY* Round-Up, March 2016
* Consumer Analyst Group New York
Photo: Ingredion
Introduction
• The following presentation demonstrates strategic trends in innovation and marketing, as demonstrated by the leading food & beverage companies at the recent CAGNY - Consumer Analyst Group New York conference (Feb., 2016).
• It’s part of our CAGNY series, which started in 2014 (click here for 2014, click here for 2015)
• The presentation is a result of the analysis of leading consumer goods company reports.
Companies included in this analysis
Food & Beverage Non-Food
Ingredients
Main Themes discussed on CAGNY 2016
Leveraging digital
Related: H&W, marketing, commerce, millennials
digital
Millennials
Related: sustainability,
wellness, authenticity, digital
demographics
Wellness, convenience
, taste
Related: protein, snacking, small meals,
veggies, personalization
trends
Collaboration, activation retail
Related: marketing, events, on the go
Strategic Pillars Discussed on CAGNY 2016
Strategic Pillars Discussed on CAGNY 2016
Macro-Trends Discussed by Participants
Macro-Trends Discussed by Participants
Digital | Everywhere
Digital technology is affecting commerce, marketing, and consumption, and was one of the main themes discussed by companies, although – innovation is still lacking for most participants.
Campbell’s mentioned the food delivery landscape, which is changing food shopping. It mentioned that in China, e-commerce will account for 20% of total retail sales.According to the company, Mobile commerce will roll $150 BILLION in U.S. by 2019
According to Kellogg’s, digital shelf exposure influences 35% of US in-store sales; and online shoppers are more loyal and spend more.
Digital | Commerce
non-food & beauty segments demonstrate a digital innovation strategy
Demographics | Millennials
Smucker’s: “the Millennial consumers (are) the driving force behind many of the changes across the industry”:
Food as experience
Better For You
On the Go
smaller and emerging brands continue to gain foothold
authentic food with familiar and fewer ingredients
convenient snacking and the ability to purchase through multiple channels are of increasing importance.
Digital livessocial media and mobile devices provide immediate access to data: information about food is omnipresent
Companies are looking for new ways to reach millennial consumers (born between 1981 – 2000)
Demographics | Millennials
WhiteWave: “Millennials will have the most spending power of all
demographic groups by 2017 and are estimated to account for
approximately 75% of food industry growth over the next decade”
Changing Families
Companies are adapting to the profound changes in family structures, addressing single-parent / LGBT households, as well as the highly involved millennial dad through marketing, as well as product offering
Strategic Pillars Discussed on CAGNY 2016
Strategy & Innovation
Innovation Platforms Digital Marketing New Channels Pricing and Optimization
Consumer TrendsHealth & Wellness Convenience & Snacking Indulgence Premiumization
Enablers & Macro-Trends DiscussedDigital Technology Changing Households &
DemographicsSlowing Economy +
Geopolitical Instability Regulative & Retail
Environment
Consumer Trends | What companies are saying
Consumer Trends | What companies are saying
WhiteWave
The Snacking Opportunity
Snacking and on the go consumption are key innovation opportunities
• WhiteWave: “While consumers want healthier foods, they increasingly want them to be more convenient:”
On The Go
Smaller Meals
Single Households
More than 50% of the population wants healthy foods and beverages that can be consumed on the go
Smaller meals becoming the norm (“between meals”)
smaller meal occasions due to smaller families
Busy Lifestyles
active families are looking for more healthy snacks and easy-to-prepare healthy meals
The Snacking Opportunity
• Kellogg’s: snacking as a “huge opportunity”
• Hain Celestial Sensible Portions - healthier snacks for moms to pack for kids for school and at-home. $ 170 million sales
Convenience | Fitting into new lifestyles
• Smucker’s – more convenient coffee (K-Cups + Perfect Measures)
• Tyson Foods – snacking platform for on-the-go
Taste | Permissible Indulgence
Kellogg’s: Smorz is back by popular demand – “indulgence, taste and fun are still as relevant as ever in the cereal
category”
H&W | Growth in BFY Foods
Conventional food categories: 1%
organic foods grew 3X the rate of conventional
Plant based foods grew 4X the rate of conventional
Y-O-Y $ growth % (2014/2015)
Source: WhiteWave
“67% of population prefers minimally processed foods”“consumers are looking for “nutritious, flavorful, convenient, and
responsibly produced products”
Non GMO + Organic + natural better for you foods: 12%
H&W | Growth in BFY
H&W | Growth in BFY
Sunbites is delivering approximately $400 million in estimated retail sales
globally.
The “purity” theme continued this year, not only in food and beverage, but in
beauty as well.
H&W | The Protein Trend
Hain Celestial: “Protein is one of the hottest food trends in the US, and the category is on fire”
Hain Pure Protein segment = $ 359 million = 13% of the Hain Celestial business in fiscal 2015
Protein continues its growth, and companies are developing platforms and products around this offering.
H&W | Rise of the Veggie Cuisine + Plant source
Kellogg’s: protein packed veggie bowls
Kellogg’s: “Plant Power”
H&W | Free From
Hain Celestial responds to UK “Free From” trend:
low sodium
low-sugar
Pepsico (US): gluten-free oatmeal under Quaker
Strategic Pillars Discussed on CAGNY 2016
Platforms | Brand Extensions
• “nutrition health-oriented angles to Eggo”: gluten-free, oats and berries
• Thick and Fluffy has been a “huge success”
• fun to kids
H&W Platform
Focus on indulgence
Kids Oriented
Kellogg’s: Building the Ego brand across platforms, recognizing opportunity (4 year CAGR %6)
Platforms | Brand Extensions
Pepsico: Mountain Dew Kickstart was launched in 2013 and now has an estimated retail sales approaching $400 million.
The superbowl’s “puppymonkeybaby” received 3 billion impressions
bigger, more scalable ideas for our global brands while maintaining local relevance and innovation
Platforms | Brand Extensions
P&G: Tide
Marketing Mix | Digital vs Traditional
Digital25%
Traditional75%
Smucker’s US, L’oreal: 25% of marketing spend in 2016
Digital Traditional
Digital40%
Traditional60%
McCormick, US: 40% in 2015
Digital Traditional
Pricing | Premiumization, Pricing / Sizing
P&G: the market is undergoing premiumization
Pricing / Sizing
“It has been possible to take this idea of premiumization and affordability through a range of packages, priced appropriately and drive transactions and revenue and
therefore price through this strategy in North America” (Pepsico on the mini can)
Growth Strategies – Penetration & Expansion
Growth Strategies – Penetration & Expansion
a pessimist complains about
the wind, an optimist hopes it
will improve and a realist adjusts their sails. And
adjusting our sails is what we have
been doing. (Pepsico)
Contact Us to Learn More…
Leveraging digital
Discover the latest innovations for FMCG in digital
digital
Millennials
Discover how best in class companies in your industry approach millennials through products, services and marketing
Wellness,
convenience taste
Learn about the latest innovations responding to these trends – by leading companies / innovators
Collaboration,
activation
Shopper marketing and retail collaboration case studies
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