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Strategic Innovation Trends in FMCG - 2016

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On February 2016, some of the best FMCG (Fast Moving Consumer Goods) companies met to discuss their growth strategies. Schieber Research has analyzed the reports and conference calls of these companies, to find out what the future holds for food, beverage and beauty / household products in North America, and how marketing and consumer trends that are changing the industry.

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Strategic Innovation Trends in FMCG - 2016

  1. 1. Consumer Goods Strategic Trends // CAGNY* Round-Up, March 2016 * Consumer Analyst Group New York Photo: Ingredion
  2. 2. 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.
  3. 3. Companies included in this analysis Food & Beverage Non-Food Ingredients
  4. 4. 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
  5. 5. Strategic Pillars Discussed on CAGNY 2016 Strategy & Innovation Innovation Platforms Digital Marketing New Channels Pricing and Optimization Consumer Trends Health & Wellness Convenience & Snacking Indulgence Premiumization Enablers & Macro-Trends Discussed Digital Technology Changing Households & Demographics Slowing Economy + Geopolitical Instability Regulative & Retail Environment
  6. 6. Strategic Pillars Discussed on CAGNY 2016 Strategy & Innovation Innovation Platforms Digital Marketing New Channels Pricing and Optimization Consumer Trends Health & Wellness Convenience & Snacking Indulgence Premiumization Enablers & Macro-Trends Discussed Digital Technology Changing Households & Demographics Slowing Economy + Geopolitical Instability Regulative & Retail Environment
  7. 7. Macro-Trends Discussed by Participants
  8. 8. Macro-Trends Discussed by Participants
  9. 9. 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.
  10. 10. Digital | Commerce non-food & beauty segments demonstrate a digital innovation strategy
  11. 11. 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 lives social 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)
  12. 12. 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”
  13. 13. 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
  14. 14. Strategic Pillars Discussed on CAGNY 2016 Strategy & Innovation Innovation Platforms Digital Marketing New Channels Pricing and Optimization Consumer Trends Health & Wellness Convenience & Snacking Indulgence Premiumization Enablers & Macro-Trends Discussed Digital Technology Changing Households & Demographics Slowing Economy + Geopolitical Instability Regulative & Retail Environment
  15. 15. Consumer Trends | What companies are saying
  16. 16. Consumer Trends | What companies are saying WhiteWave
  17. 17. 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
  18. 18. 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
  19. 19. Convenience | Fitting into new lifestyles • Smucker’s – more convenient coffee (K- Cups + Perfect Measures) • Tyson Foods – snacking platform for on-the- go
  20. 20. 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”
  21. 21. 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%
  22. 22. H&W | Growth in BFY
  23. 23. 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.
  24. 24. 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.
  25. 25. H&W | Rise of the Veggie Cuisine + Plant source Kellogg’s: protein packed veggie bowls Kellogg’s: “Plant Power”
  26. 26. H&W | Free From Hain Celestial responds to UK “Free From” trend: low sodium low-sugar Pepsico (US): gluten-free oatmeal under Quaker
  27. 27. Strategic Pillars Discussed on CAGNY 2016 Strategy & Innovation Innovation Platforms Digital Marketing New Channels Pricing and Optimization Consumer Trends Health & Wellness Convenience & Snacking Indulgence Premiumization Enablers & Macro-Trends Discussed Digital Technology Changing Households & Demographics Slowing Economy + Geopolitical Instability Regulative & Retail Environment
  28. 28. 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)
  29. 29. 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
  30. 30. Platforms | Brand Extensions P&G: Tide
  31. 31. Marketing Mix | Digital vs Traditional Digital 25% Traditional 75% Smucker’s US, L’oreal: 25% of marketing spend in 2016 Digital Traditional Digital 40% Traditional 60% McCormick, US: 40% in 2015 Digital Traditional
  32. 32. Pricing | Premiumization, Pricing / Sizing P&G: the market is undergoing premiumization
  33. 33. 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)
  34. 34. Growth Strategies – Penetration & Expansion
  35. 35. 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)
  36. 36. 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 demographics Wellness, convenience taste Learn about the latest innovations responding to these trends – by leading companies / innovators trends Collaboration, activation retailShopper marketing and retail collaboration case studies
  37. 37. Contact Us http://www.slideshare.net/hamutalewin https://www.facebook.com/schieber.research http://il.linkedin.com/in/hamutal https://twitter.com/hamutal1505 Established in 2009 by Hamutal Schieber, Schieber Research is a premium market research boutique with offices in New York and Tel Aviv, providing tailor-made reports and competitive intelligence reports. We help companies make smarter decisions, which take into account relevant market, consumer and shopper trends. email: info@researchci.com
  38. 38. Contact Us | info@researchci.com www.researchci.com Photo: Ingredion

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