Loading summary
Transcript74 lines
- [00:02]
A
Hello and welcome to the CPG Guys Podcast. Set at the intersection of commerce and tech. Your hosts, Sree Rajagopalan and Peter V S Bhan explore how brands and retailers engage consumers in a digitally driven world. And now, here are the CPG Guys.
- [00:21]
B
Hello and welcome to the CPG Guys Podcast. I'm of course sri, your co host and also CRO and co founder of Think Blue Consulting, your trusted partner in your omnichannel development journey where you can get in touch with me at shreehinkblueconsulting Co. Please do listen to my older daughter's music at www.rearaj.com and follow laraj My younger daughter as a member of the world's fastest global girls group Katsai and they're currently in Lollapalooza South America. We're looking forward to Coachella coming up shortly in April. I'm joined today by none other than my co host and co founder pvsp, who also moonlights a set of industry and client engagement at Flywheel, the commerce acceleration division of Omnicom. Peter, we're headed to Shop Talk in less than a week. What do we have going on there? And then I believe we have just recreated the Cornell program. So tell us about both.
- [01:15]
A
Yes, Sree, it's good to be on the podcast with you as always. Yeah, we're going to Shop Talk. It's arguably the last event of the the what we'll call conference season. I was just on LinkedIn. I saw a post by our friend Chris Perry from First Mover. It was called the Conference Season Blues. He was singing about if you survived conference season. I think that's an apt way to describe what you and I have been going through. It seems like we've been on the road since the 3rd of January and we managed to managed to survive, but boy, it's been a little crazy hour. We're going to do some hosted dinners at Shop Talk. We're also going to record a lot of content and episodes while we're there. A lot of people that it's worthy of having conversations with will be at Shop Talk, so we're aggressively doing that. We decided to skip the kickoff party this year. We'll do it at grocery shop. Don't worry, people, we're just taking a little breather because it's a lot of work getting one of those things together, but we're going to do that. And Sree Cornell, you know, last year we launched our very first executive ed program focused on RET media. This year we're getting Bigger, we're getting better. We're getting broader. And we're going north. That's right. We're moving out of the satellite campus of New York City, and we're moving up to the main campus in Ithaca, New York. And we're going from 50 to 75 attendees. That's how much demand there's for it. And our focus goes beyond just retail media. It is truly omni commerce. So we will be talking all a lot about in store, a lot about online, a lot about connecting the consumer experience. It's going to be the last week of July. It'll be in Ithaca. You'll find links on the CBT Guys website, and we'll start posting about it on our LinkedIn feed. You and I are very excited. In partnership with the Exec Ed group at Cornell's Johnson School of Business. Also, our friends at. I don't know if you've heard of these guys. Sheree Think Blue Consulting. You know them? Have you heard of that?
- [03:25]
B
I'd love an introduction.
- [03:27]
A
Yeah, I'll. I'll take care of that after a bit.
- [03:28]
B
What do they consult on?
- [03:30]
A
I. Not food and beverage.
- [03:31]
B
Catering.
- [03:31]
A
I. I don't know. I think probably. But in all seriousness, it's great to have the CPG guys in Think Blue help develop a really powerful curriculum that I think anyone who's in the industry. There aren't many seats left. They're like, I can count on one and a half hands. Maybe one hand now, how many seats we have left. So it's not like. It's not like you and I are out advertising because we desperately need to fill seats. We filled 70 of the seats already, and we haven't even officially announced the program.
- [04:02]
B
We just announced it this morning at the time of this recording. 15 minutes ago. On Tuesday.
- [04:08]
A
Yeah, yesterday. Yeah. So it's a little crazy. By the way, happy St. Patrick's Day there, Sri, as we record this. Oh, wait a minute, old friend. Sri or Rajakopalan.
- [04:21]
B
The two things I remember related to Ayesha. One is, did you ever watch Smeagol? Do you know who Smeagol is?
- [04:27]
A
Yes. Shmeigel.
- [04:29]
B
Yeah, but he says Smeagol. He doesn't say Shmeegel.
- [04:31]
A
Okay. I always pronounce it loves.
- [04:34]
B
Precious.
- [04:35]
A
Yes, Yes.
- [04:35]
B
I watched that thing 20 times with my kids when they were younger. And the other one is me. Always wants gold at the end of the rainbow.
- [04:42]
A
Yeah. I just think a lucky chance.
- [04:44]
B
Is that real? Can I find a pot of gold at the end of the rainbow?
- [04:47]
A
I'll tell you this. Do you know what, you know what I'm looking at on the other side of the camera from me? Nadia this morning set up a leprechaun trap with the anticipation that she's going to catch a leprechaun in the trap and it'll have to give her some gold. So she's expecting gold. So I suspect there will be somebody
- [05:06]
B
will be at work later today.
- [05:08]
A
I suspect there will be somebody. I suspect that some gold foil covered chocolate will appear in the trap when she gets home. That's. That's about as far as I'm willing to commit.
- [05:20]
B
That could get very exciting and I'm looking forward to seeing pictures of that on Instagram and on several of your platforms.
- [05:29]
A
Yeah. By the way, I've been, I've been pushing out a lot of content. If you're not following me on Instagram. The Offspring and I were with SRI down in Orlando for the Mars National Sales Conference and we managed to make our way over to Disney World after our presentation. And Shree was speeding off to the airport. And you will find pictures of, of the prodigal daughter with no fewer than, no fewer than eight princesses. So it was a big day. Big day.
- [05:58]
B
I saw them all. Well done. Good day. Thank you. For audience. Make sure you're subscribing to our podcast and your preferred listening platform where you can get our latest episodes and go back and consume some of the 580 plus episodes we've already published. Yeah, Peter, 580 episodes someday. This just feels surreal. And now let's get to our guests. Our guests are Peter and Sree. Here's what we decided. We postponed a lot of our content or moved the schedule so that we can actually do a Q1 summary. And why do we choose to do that? A lot happened in Q1. Peter already discussed it being a conference season, we were out and about. We met a ton of people in the industry. We've attended a lot of presentations. We've had some great guests on the show. And today what we thought is, why don't we take a handful of those topics that we think stood out. We're not going to do it in traditional fashion where we talk about every single episode. We pick 10 or 12 topics that we thought really have emerged in Q1 that'll dictate the rest of the year for the industry, and that's what we're going to talk about. So I'm going to jump right in, Peter, with the first topic. And of course, I think the number one highlight for us this year highlight for the industry, which dictates a lot is the learning we got from Gagny. And I think when we went to Cagney last year in 2025, it was a lot of guessing game by senior leadership from the largest publicly traded CPG brands. It was. They weren't able to articulate a clear story, but there was an acknowledgement that there was a volume challenge and also a sense of defeat. Not sure what to do about it. Some said innovation, M and A was a big deal last year. That's how they're going to get to it. I didn't see a lot of focus last year on Omnichannel. Still struggling to accept the reality the consumer is a hundred percent digital because they've all built business models in the 80s which are almost 100% analog. That's the reality. From PNL standpoint, this year was different. CEO after CEO after CEO got on stage at Cagny and acknowledged the industry as a huge volume challenge. I would say 80% of them showed a lot of optimism that even in that environment now they know and realize it's here for the long term. It's not a one and done one year phenomenon and things aren't going to be okay unless you grab the bull by its horns and you start showing leadership yourself. So I was pleased to see a lot of companies, Unilever was one of them, P and G was another one. ConAgra hunting for white space. A lot of conversation about we're going to go into white space, we're going to innovate it ourselves, we're going to use AI to us. But an acknowledgement that volume growth is an issue, it's here for the long term and that CEOs are focused on coming back to it. What did you hear about volume growth?
- [08:45]
A
Well, sri, I was reviewing the scores that we gave to the presenting manufacturers at Cagny for portfolio stability and innovation. And what's interesting is even across the bottom tier, right. So we tiered them, you know, top group, middle group, bottom group. The lowest score that anyone got was five. So. So they were mediocre at worst. Right. But most of them scored pretty highly. I think we had four, 10 scores and probably as many, if not more nine scores. I think that was not a problem. Being able to find white space and innovation was not a problem. But the Omnichannel one was a problem. Right. There was still lack of recognition among a handful, particularly the lower tiers where they really just had some, had nothing. They had scores of zero. There were three, zeros scored. It was Celsius, it was jbs, and it was Vita Coco that showed absolutely no meaningful understanding of what of what Omnichannel meant. So I think there's here's what I will say. I you're right, that versus 2025. Recognition of volume challenges was readily apparent. And I think they either didn't talk about it last year or they said we're in the same boat as everyone else. And they kind of just raised their hands this year. They knew that argument wasn't going to fly again with the analysts and they had to come up those that didn't come up with something else and tried to do a replay of it. Well, let's just say the first one that tried to do it lost 10% of their stock value the day that they presented. It was an interesting time, Sree, but those were my takeaways from Cagney. I think as our friend Nick Modi said during our conversation with him, listen, you know, stop chasing the quarter. Invest for the future. This is honestly Sree, this is a really great time to be a privately held company because you're not chasing Couldn't agree more. You know, the companies like Build the Company, companies like Sargento, like sj, like Mars, they could not be happier because they are not facing the decisions, the brutal decisions that publicly traded companies are. And as our dear friend Carrie Sander has said to us in the past, when you're, when you're the chief customer officer at a publicly traded company, she was at the time when it was Kelanova, right, that you're responsible for delivering both the quarter and the decade. Fortunately for the privately held companies right now they can focus on the decade. They don't have to focus on the quarter. Real tough times going on, Sree.
- [11:33]
B
I want to mention the two episodes we actually did on Cagny. For those of you that missed it. All you got to do is go to Google and type CPG guys Cagney 2026 and you should be able to pick up that episode easily on Apple Podcast or your favorite listening platform. And the second one is actually with Wall street leader and analyst Maryland from RBC Nick Modi, where you can simply type Nik Nik Space CPG Guys Cagney and you should be able to find that episode at the top of the search results. We also did analysis every day of every single presentation so you can find that on a LinkedIn feed if you go back about a month. And we also did it we also did in article with mass market retailers so you can type Mass market retailer Space Cagney, where we analyzed every single day as an executive read. So you can find that just by going to Google and typing that as well. So Cagney was an important highlight for us. We'll be doing it year over year. We look forward to thank you to all of those that send us direct messages. Your appreciation means the world to us. This podcast doesn't exist without you, so thank you for following.
- [12:41]
A
Yeah, and Sree, you know what was interesting? Yeah, and Sree, you know what was interesting? Following our articles that we published, not only during the event did several of the manufacturers, notably the corporate communications and the investment relations people, come back and introduce themselves. And we're getting some great interviews out of that. But we were actually asked, would we be interested in helping them prepare for their CAGNY presentations in 2027? So, you know, if you're a CPG out there and you're planning on being at Cagny next year and you want some guidance on actually how to talk beyond just the analyst and the EPS and the dividend, and you really want to make a wave, talk to the CPG guys, we can probably give you some pretty good guidance. We're very fortunate to have earned the trust of so many manufacturers in that way. All right, let's move on to topic two, shall we? Sri and this is about the evolution of artificial intelligence. Moving from chatting, asking questions, or giving it simple instructions to actually having agentic activities, meaning agents that are doing things as if they were human beings. They are performing tasks, they are doing things that do that. And this really comes from some conversations we've already had this year with both Nielsen iq. We had a great conversation with Simon Angove, the CEO of Syndigo. They're getting ready for their big Syndico Connect conference in the middle of April out in Las Vegas. But this concept of experiences, right, the consumer experience is omnichannel. It's everywhere. It's in every place. And when you're a brand and you need to think about how your product appears in how consumers are searching, the concept of a product experience management platform becomes critically important. You know, if you're a, let's say you're a big scaled manufacturer, sri, you have maybe a thousand items in your portfolio and you're selling across 2, 300 marketplaces, you run up against the reality of how do I make sure that content for all my products reaches all those marketplaces and does so treating each and every item as if they were the most important item in the portfolio? Because the reality is up until now, most manufacturers, while they claim to be servicing their entire portfolio across 300 marketplaces, the frequency at which they did that was very different from your top 20 items to your bottom 20 items. The top 20 items might get monthly treatment and they might get it across maybe 20 or 30 of those marketplaces. But the reality is, is that the rest of the portfolio did not get that frequent treatment. And as a result of that, those items were not recent, they were not as relevant to what consumers were searching for at any given moment. And that was to the detriment of the tail end of their portfolio. Right. And so agents are about how do I, how do I make sure that my content is in a format that an, that an agent can actually understand the destination and can modify the content to fit the requirements of the destiny. This is just one example of an agent. Right. Modify the, the, the, the details, the dimensions, the format, the font, the whatever it is so that it reaches the PDP on that, on that marketplace and it reaches in a way that is completely compliant with that particular marketplaces platform and delivers an exceptional customer experience all the time for every item. That is where we're moving. And in the end of the day here's why it's important. Because now you have to start worrying about as people shift from marketplaces to LLMs for doing search and even conducting commerce, they need to make sure that their content, no matter where it sits on their own homepage on the PDP of retailer A, retailer B, retailer C, that agents are able to find that content, incorrectly prioritize that product and in search results so that the brand has a chance of actually selling the product. Sree, what are your thoughts?
- [17:22]
B
So remember Peter, I had to do this for a very wide portfolio across many aisles at General Mills. Yeah. Prior to that, across makeup, skincare, beauty, fragrances for Revlon. Prior to that, Johnson Johnson consumer, across baby skin, health, beauty, makeup, again a whole portfolio of stuff. Right. And then let's go all the way back to Frito and snacks across multi snacking categories. Here's a common thread we did every single time. Three things I'm going to mention that go into content. One is we optimize for Google a hundred percent of the time for Google search even as back as 2012. Second, we were risk averse with our content. Very risk averse and coming from large publicly traded companies, it was given.
- [18:09]
A
And how was that manifested? Sheree, when you say risk averse, how, how would that manifest?
- [18:14]
B
The content may not as engaging as what small companies with a handful of SKUs as well as startups.
- [18:21]
A
You're not provocative. You're not being provocative with your content.
- [18:24]
B
Zero. Absolutely zero. And triple checking claims which which I'm advocating for anyway. But it also limits keyword search even on Google. That that was number two. And the third was there was the appetite only to do exactly what the platform said. So you get five images, let's just get five images. And lowest common denominator is what the entire formula worked with. Here's the problem. When you've created an entire catalog over a decade and over optimize it for Google, that plot doesn't fit agent E Commerce whatsoever. Or let's just say AI. AI search, period. Who's going to win this battle for the next couple of years till the large companies can figure this out? Startups, it's your heyday. Have a great time. You're always called ankle biters. So go about your business and actually bite that ankle. You are going to gain share of category which is first. It's going to start online. But I think large companies forget people start their discovery here. They're not starting the discovery on display. That was my cat Zoomy by the way, in case you're wondering. People are not starting their search based on display. They're going into a display to look for deals, prices, attractive prices. It's good luck fixing it. I think Agent Ecommerce is here. We gave the most simple real life example. Search is the primary aero focus. You are aware, Peter, I'm working deeply on a project with Coca Cola and the research, the Retail Research Council and the impact of AI and shopping. We're learning quite a bit. The industry is in very different places. I would say CPG is ahead of retail. We learned that at Cagny. All right, lot coming there but Peter, talk to us about what's going on at the Walmart Flywheel. What's going on with Walmart Connect? They seem to be crushing it in the marketplace. And then what they bought Vizio. Anything new coming out of that?
- [20:19]
A
Yeah. So let's talk about what's referred to as Walmart Flywheel 2.0. That is the incredible growth of their revenue model that falls under the leadership of Seth Diller, notably Walmart Connect and Walmart plus which is their home delivery subscription service. The third, the third leg in that stool is Walmart Data Ventures and Scintilla, which is run by our dear friend Mark Hardy. But if you look at their latest numbers, Walmart Connect showed 41% growth. Now Sree, as I said in a previous episode if this was their second or third year in operation, I would say 41% growth is pretty realistic because they got a lot of ski. This is a very mature business, like seven years of very strong growth and to be able to put on top of that another 41% in the most recent results. Plus, you know, plus continues to scale. The Vizio element is, has proven to be just one part of the success of Walmart Connect. Their, their shift in focus from purely selling owned and operated product, product search listings. Right, which, which if you believe companies like Emarketer saying that they're fairly saturated in that space. Walmart Connect is already focusing itself on video advertising services and Vizio is very important in that as well. So there's a lot of growth to be had. Walmart is realizing it. Target meanwhile, is still facing a whole lot of challenges and Walmart just keeps gaining steam. Walmart, Walmart isn't looking at Target. Like, if anyone thinks that Walmart is concerned about Target, they're looking, they're, they're looking from, particularly from a physical store experience. They're looking at them in the rearview mirror. They've got their eyes set on Amazon and taking on the Amazon ads business and being a bigger part of the budget for these brands. They are delivering a holistic, extremely pervasive and broad retail media platform that brands can invest against Target. They've got, if their latest results and messages from their CFO and their new CEO Fidelke are any indication, they're still trying to figure out who they are in this world, let alone be able to say. Here's what I can tell you and I can say this. Having talked to quite a number of brands in my other avatar, I said this to the people at Roundel when we saw them in January at ces. I said, you need to understand that Roundel is no longer in the top five priority RMNs for almost every manufacturer. They're just not. They're just not. They're focused on Amazon, they're focused on Walmart, they're focused on Instacart, they're focused on Kroger Precision Marketing and a number of others. But Round Dial just isn't there. And so they've got a lot of work to do. Meanwhile, Walmart is just killing it left and right. Sri, I mean they are on fire. And listen, I hear our friend Mark Williamson at Costco when he says, listen, we're only going to do retail media if it helps us move more volume. It's great to be able to say that. But for Walmart Their profit is highly dependent, highly dependent on retail media. Much like at Costco, their profit is highly dependent upon membership subscription fees. Right. So Walmart, kudos on them, but I want to hear your POV sree on this.
- [24:25]
B
Look, this is actually pretty straightforward. If you look at any large CPG brands, P and L, Walmart is a third of the business, a fourth of their business. Right. So that's non negotiable. Amazon has creeped its way from that didn't exist 1%, 2% and for many CPG brands, second third largest customer. Especially if you're in healthcare, health and wellness, beauty, skincare, it's in your top two or three. Now you look at media in general. Amazon has several platforms that Walmart doesn't. You know they've got the whole sporting angle, they got prime video. Walmart will eventually play catch up with Vizio at some point. But between those two you are the most important consumer facing opportunity to get your brand messaging out there. That's why whatever the number is these days, 80%, you know, four out of five retail media dollars are going there at this point. That said, if I look at who will win this battle of share between the two of them, this is Amazon share to lose. Peter, why? Because they're already saturated across majority of the platforms. Walmart is still growing and if it's a third of your business and you need to focus on consumer attention, you want to send the consumer to where a third of your business is so that it keeps you keep watering the plant and keep growing it. Here's the one other very important message that I think it's important for people to absorb today. Walmart merchants, while still integrating retail media into their everyday life and business processes are still treating it as an outward they're the best of the lot from an in store business model in the entire industry they are the best. But they still mention it, ask for it. The day they realize retail media is the same as display and can drive in store traffic. This is Amazon share to lose by the big dollars. And the rest of the industry is going to get left so far behind because Walmart has a lion's share of in store traffic that will be a game changing moment in the industry to look forward to. I'll be curious to see how Amazon responds because their flirtation with the in store model for grocery still hasn't worked. So why do I refer to grocery? There's a huge department store way outside Grocery called General Merchandise because Grocery still occupies the largest, one of the largest portions of our GDP that's just even for Walmart.
- [26:54]
A
And it drives trips, to be honest. It drives trips. It drives a lot of trips.
- [26:59]
B
Frequency, the frequency of trips as well. All right, I'm going to move us over into our next topic and it goes back to Cagney and we heard Bob Nolan from ConAgra, who we really revere, is one of the greatest insights people we see on stage year after year. And we're hoping to have him on the show shortly. I'm working with the PR and cons to make that happen. He said something very important on stage and he used the word the death of validation. Did you catch that, Peter? The death of validation. So let me explain what that means based on the presentation is svp, of course a growth science there It's a shift from relying solely on traditional lagging indicators or an internal metrics to confirm consumer behavior, which is a lot of panel based behavior, all lagging indicators. So that that's a huge issue for syndicated data that publicly there's an acknowledgment that the death of validation takes place. All lagging indicators do is they validate hypotheses you may already have or cause you to look at a validation and change the validation. He talked about three things. A move towards real time high frequency data which is using instantaneous forward looking insights to understand consumer trends as they happen rather than after the fact. Do that. Social engagement, social media indicators, things of that nature, creators, the creator, digital economy, things of that nature. All Achilles heels of the large 1980s scaling brands. The second one was the use of science and predictive modeling which is growth science using advanced analytics and AI driven modernizations to predict consumer needs provocativeness rather than just validating past purchases. Again going back to the same thing. And AI anchors on ML, it can process data much faster than we've ever seen in a lifetime. So predictive modeling is real. It's here. I hope the largest brands take that to heart. And the third one is using deeply integrated data to understand consumer behavior. Deeply focusing on how to do demand creation and demand generation through immediate, urgent, relevant insights in a rapidly evolving market. Not anniversarying last year's promo which is how 98% of our industry large brands run. Let's take it worked last year, let's just reapply it. So Bob talks about get away from this behavior, get more real time, use predictive modeling, get to know your consumer by looking at their behavior today, not last year's behavior and assuming that's what will work. In a sense, what Bob indicated was in a fast paced market waiting for traditional validation is absolutely obsolete in yesterday's behavior. And that the new imperative is active forward looking predictive modeling and consumer intimacy to drive growth and what conagra calls a superior relative provocativeness strategy. Thoughts, brother?
- [29:58]
A
No, I think Bob. Well, first of all, you know what I think of Bob. He's an industry icon when it comes to consumer insights. But I think you're right. I think the doing the same old thing one year later is not a way to drive meaningful growth. Right. It's it. That was, that was the whole theory behind FSIS for many years. If you don't know what FSI is, it's called a freestanding insert. It's a piece of paper that went into something called a Sunday newspaper and it included usually a call to action around a coupon.
- [30:32]
B
How long have you been in the industry? Let's date you.
- [30:34]
A
I know I'm pretty old, Sheree. I'm pretty old. But, but the fact of the matter is that when we talk about this and this whole concept of who is it? Our friends at form and Tracks, David Gottlieb and Jeff Rona said dashboards don't sell products. Right. This making sure we know what's happening at retail where in grocery in particular 90% of sales still occur is critically important. And you need to understand what the conditions are so that you can make smart activation decisions. Right. That is what's going to drive volume and that's the difference. If you're a manufacturer and you think that everything that all you have to do is put out a digital ad or buy a retail media because at the end of the day retail media. Right. Retail media doesn't work if you don't have products in the store. Right. Cause most of the fulfillment is happening at the store level. Right. And so if you put out an ad and there is no product in store to fulfill, one, you've wasted your money and two, you've ticked off a consumer thought they were getting something and find out. Come come to find out they don't even have it in the store. Right. Drives me crazy.
- [31:47]
B
So you've given away, you've given away the plot for our episode coming up on Saturday, two days from today. It's going to sound like a promo for that episode. But you know, recently Tracks and Form merged and they talked about the death of the traditional dashboard and it's a good appreciate command center for the shelf. Unfortunately, I won't speak about it too much. I don't want to give away the plot but it talks about real time action at the shelf, avoiding out of stock issues, when you place media campaigns, when you have promo campaigns and you don't want to run out of stock. And this episode will tell you it's possible today at real time to measure and course correct. So do listen to the tracks and form merger but we are not going to give away the plot. So we're going to jump to the next one. Peter recently had somebody from Bimbo Bakeries do tell who. And we talked about moving from JBP to JVC. Who was it?
- [32:43]
A
Mr. Jeff? Yeah, Jeff Hendricks, the Chief Customer Officer at Bimbo Bakeries North America. We ran into Jeff at the FMI Midwinter executive conference, had a lovely little conversation, invited him to come on the podcast. He graciously accepted. And we talked a lot about how brands need to move beyond the old world of joint business planning, which was simply reacting to a number that the retailer arbitrarily determined and now understanding that there are bigger components of a collaboration. Right. That retailers are trying to be publishers. They're looking for investments in their retail media platforms and honestly brands as they look to place advertising dollars away from mechanisms that don't work anymore like linear television and print media and they consider closed loop retail media networks as, as an alternative. If they're writing the checks, they have a right to ask for what they need to justify their investment. Which means typically transparent measurement. Add products that address the full funnel of, of the customer journey and that is about at the end of the day one, putting the customer, the consumer rather at the center because we, we should not use those interchangeably. Typically when SRI and I refer to customer, we're talking about how a brand thinks, thinks of a retailer. When we say consumer, we're talking about the shopper, right? But it's about putting the shopper, the consumer at the center of business decisions and then figuring out how do we delight them, give them value in the products and then how do the brand and the retailer together create value for themselves? If those three things happen, you have a winning formula and everybody will be happy. And what Jeff talked a lot about is the fact that this heavily relies on data. Data is at the very center of a brand and a retailer's ability to collaborate. They need to know everything they can about what are the shoppers propensity signals, what are the conditions at retail? Right. What are the terms of the purchasing agreement? Jeff, it went into great detail as to what a scan based trading mechanism is where they don't get paid until someone actually buys the product itself. That takes a lot of the labor cost and the inventory carrying cost out of the consideration. They can really just get down to what are the right products to have on the shelf in a store. Right, but it also means go back
- [35:26]
B
to what Bob just said. Right, like real time bro. Real time. It's possible today. No, focus on the real time.
- [35:32]
A
Absolutely. But, but it's, it really is about changing the dynamic from it being a retailer tells me what products I can have on my shelf and what prices that are going to be charged and how I should be spending my trade fund to what is the, what's going to drive the most engagement with consumers and ultimately the most conversion. That's a fundamental shift that's still, still coming together.
- [35:56]
B
SRI so to me joint value creation, Peter is about, you've mentioned it. Focusing on the consumer. Put the consumer at the center of it all to deliver so you can build a lifetime loyalty. Two things pop up top of mind for me Peter. One is data. You mentioned it, the importance of data. Today there isn't a lot of trust between sharing retail data as deep down the consumer and brands and brands sharing their side of the fence on product with retailers to the extent they need to to be able to jointly focus on the consumer. Each one is focusing on their P and L and that's what drives anniversary in based behavior from the previous year which we just kind of highlighted too. So how do we get away from that into these in Today's world with AI and clean rooms, we've only used that word 4 million times here in just time. I say it's like a bleach but clean rooms are real. Today you can build these private, these private data lakes where you can bring together unified user ID based content for the purpose of driving the right outcomes for your consumer. Personalization for your consumer. So that's a big piece of IT data in a private data sharing environment called clean rooms. I would say Peter, the second part of joint value creation is moving away from this anniversary behavior to truly focusing on the consumer. I'm going to tell you how it's going to get there. Whether you like it or not, retail or cpg, AI is going to force it anyway. You have no choice. AI can negotiate better than you ever can on both sides of the fence and it's going to place whatever parameters you ask it to you place P and L. That's what it's going to do. But please, I beg, I hope both sides of the fence you'll put the consumer, it's the best outcome you can get to building long term loyalty, keeping traffic within your store, your website, your app, et cetera. And you heard it here on the CPG guys, we have no problem seeing it. We're not trying to be alarmist. The merchant of the future is definitely spot AI informed and it's going to be very difficult to negotiate against that. Be ready for that world. All right, next one. Talk to us about TikTok shop social commerce, digital creators. That stuff seems real, Peter.
- [38:11]
A
It certainly is, Sree. TikTok shop just continues to grow in terms of of its share of the market. It's projected to hit $20 billion in gross merchandise value. 2026. That's enormous. Flywheel just released an analysis that said listen, social commerce platforms like like ByteDance are are increasingly in the expect to see them in the top two or three marketplaces worldwide in terms of the volume that they're generating. This is not a fad. This is how people are consuming content and making decisions on how to spend money and buy things.
- [38:57]
B
Right.
- [38:57]
A
This is, it is a platform for commerce. It is not a dalliance. It is not simply a tool for relaxation. It is a way of living. And if the brand, the sooner a brand understands that and starts getting invested, the better off they're going to be.
- [39:14]
C
Right?
- [39:15]
B
And Peter, I want to say it loudly. Please bear with me as I say it. If you're a senior leader in cpg, especially in marketing or sales, and you're a senior leader in retail on the merchandising side, and you do not have a TikTok and Instagram account, I'm not asking you to post because I know it's way beyond you at this point. But if you don't have those accounts and you're not following the consumer, shame on you. Shame on you.
- [39:40]
A
Yeah, absolutely. You need to understand and you have to have enough humility to ask the Gen Xennial sitting outside your office to come in and show you what's going on. Ask them. Make it a competition. Who can, who can surprise me the most or make me aha. The most from what's going on in the marketplace. Make it fun.
- [39:59]
B
Those winning on the basis of price today have it easy because we are in a very challenged economy that won't last forever.
- [40:07]
A
But our friend Josh Program, our friend Joshua Gebhart at ampt along with Brandon Nutter, his co founder. You know, Joshua called it moving at the speed of culture. Right. And you need to make sure that your products appear where the culture is engaging and it's increasingly engaging on social media platforms like Pinterest, like TikTok, like Instagram. And you need to be optimizing your, your investment. And if you're not optimizing for social inflight right to a retail checkout, you're leaving probably 40% of the conversion opportunities on the table. Sree that is, it's absurd how much money there is to be made in this space. And again, get, you know, the old lei, you know I'm going to bring it and nobody, nobody in the Gen Z knows who I'm talking about. But you remember Lee Iacocca, the iconic CEO spent a chunk of his career at Ford, moved over to then Chrysler. He was inventor of the K car. Not to be confused with, not to be confused with the K shape economy, but the K car. But he, he had a very famous saying. It was lead follower, get out of the way. And that's what I'm saying. If you're a CMO and you're not going to lead or you're not going to jump on and follow, get the heck out of the way because you're, you're doing your brand a disservice. That's all I got to say.
- [41:27]
B
SRI all right, Peter, we have time only for two more. So here's what we're going to pick. Why don't you tell us about super bowl and how it. The ad analysis that we did and I'll close it out with the K shape consumer. Go Peter. Super bowl, how do we do? What do we learn? Who are the best ads?
- [41:41]
A
Well, you know, well, the best ad was clearly the first ad that was played after the kickoff, which was the, the State Farm ad with Jake.
- [41:49]
B
Okay. He's picking that because my daughter was in it. Cat's eye. What was the best ad?
- [41:54]
A
But, well, you know what, there were, there were a lot of really interesting ads. I will say this. The, the, the big celebrity cameos were nice for, I don't know, maybe some awareness. But honestly the ones that did very well were the ones that kind of leaned into real world utility. Kimberly Clark had a particularly good one. There were a number of others. But the end of the day, what we didn't see. SRI what we didn't see at the super bowl was few if any digital add to cart moments. Right?
- [42:30]
B
You're spending eight.
- [42:31]
A
We saw two QR codes. Two QR codes, right. You're spending fricking $8 million a day if you don't have some kind of call to action. You wasted a huge opportunity to connect with the consumer.
- [42:42]
B
So Peter, I'm gonna tell you my biggest observation here. In the super bowl ads, they were six ads with one theme. Do you remember what they were? AI.
- [42:52]
A
AI? Yeah.
- [42:53]
B
Why?
- [42:53]
A
Because it's what everybody's talking about now. Sree. It's the hottest topic.
- [42:58]
B
People are using it. Stop pretending that AI is like the future. Like you did on E Commerce and missed the bus completely and gave yielded to smaller brands. And if you're a smaller retailer with fifty hundred, two hundred stores, you missed the bus and yielded to Walmart as well.
- [43:14]
A
Yeah, when I open up Chrome, when I open up Chrome, it doesn't go to the Google homepage anymore. It opens up three tabs. One's on Claude, one's on ChatGPT and one's on Gemini.
- [43:27]
B
My personal is perplexity because I can combine it all in one shot. Peter, let's wrap this up. Having a discussion on a very important topic here, which is the K shaped economy. I don't want to not talk about that. So let me explain. Nielsen IQ has been talking about that quite a bit. Maybe hopefully later this year we'll have someone from Nielsen come and talk to us about much more detail about what is the K shaped curve but what does it actually mean? Because the whole industry is talking about it. Walmart has acknowledged it, economists have acknowledged it. So what that means is the data is showing a sharp divergence in consumer behavior based on income where higher income households are thriving while lower income households are cutting back creating a two track economy. This phenomenon is dominating the 2025, 2026 consumer landscape means that while overall economic make will look stable, it's unevenly supported by the wealthy. The affluent households earning 150k plus per year are driving growth in omnichannel sales. They're actually benefiting because they're seeing asset inflation. Stocks home equity at 2025 bull market end of last year and they can buy premium goods and services. Whereas the low income households, the 50k and below household income are reducing spending, prioritizing essentials and experiencing declining unit volumes that disproportionately impacted by cumulative influence influence on necessities like food, rent and insurance. Inflation hasn't let down at all. Let's just be honest now Peter. Let's bring that back. Food Bev grocery. Which of those two incomes are the most important for most of the brands that come here on the show? Is it the wealthy and affluent or is it the low income households?
- [45:09]
A
Particularly for the big national scale brands, it's the vast majority of lower income People they've got to be worried about are their products affordable now?
- [45:18]
B
Peter, with the last 10 years and
- [45:20]
A
what's happened and what's happened in the last week and a half shree, their pocket is being robbed because oil prices and gasoline prices have gone from about 80 cents a gallon because of what's going on in the Middle East. So it's putting even more pressure on the food manufacturers. A lot of them took price during the pandemic. They, they, they pushed back on that in the last year. Volume hasn't quite corrected itself. This is a very tough time for scale brand manufacturers for the lower end of that K shaped economy. Right?
- [45:56]
B
Yeah Peter, so let's, you know, those are some of the big themes we saw, ones we wanted to cover but we've run out of time. We just didn't have. It was the 2026 tariff refund rush. And what does that mean? We've talked about it in the RIF a couple times and how that impacted pricing. Peter just referred to inflation. We didn't get to Gen Z forcing the green hand of legacy brands focused on ensuring that wellness and sustainability both come hand in hand. And definitely it'd be incorrect if we didn't talk about talent war. We recently in the Rift talked about the Walgreens layoffs restructuring in Walmart which are shifting the export pool. AI will make a dramatic impact on the job pool over the course of time. But Peter, that's all we have time for. So let me go back to wrap this episode up. Peter, Let me remind our listeners you can find all of our content by simply going to a web Browser and typing cpguys.com as the URL. If you are someone you know something to contribute to this ongoing discussion with CPG guys, drop us a line at contact@cpguys.com to audience, I want to thank you for the clicks, likes, comments, direct messages, meeting us at trade shows, coming to our events, recording episodes with us and our sponsors. We are always grateful to you, all of us doing so at Shop Talk 2026 in Vegas next week. Thank you, thank you, thank you. This show doesn't exist without all of you. You work with us all year and we're grateful to have you as your audience and partners. Thank you Peter. What a pleasure to do this episode kind of recollecting Q1. I look forward to the Q2 recollection as well. Thanks Peter.
- [47:27]
A
Should be fun. Sree, thanks for doing this.
- [47:30]
B
That's a wrap up this episode of the CPG Guys.
- [47:47]
C
The content in this podcast episode is provided for general informational purposes only. By listening to our episode, you understand that no information contained in this episode should be construed as advice from CPGuys LLC where the individual author, hosts, or guests are, nor is it intended to be a substitute for research on any subject matter. Reference to any specific product or entity does not constitute an endorsement or recommendation by CPG Guys, llc. The views expressed by guests are their own, and their appearance on the program does not imply an endorsement of them or any entity they represent. The views expressed by CPGuys LLC do not represent the views of their employers or the entity they represent. CPT Guys LLC expressly disclaims any and all liability or responsibility for any direct, indirect, incidental, special, consequential, or other damages arising out of any individual's use of, reference to, or inability to use this podcast or the information we present in this podcast.