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- [00:02]
A
Hello and welcome to the CPG Guys Podcast.
- [00:05]
B
Set at the intersection of commerce and tech, your hosts, Sree Rajagopalan and Peter V. S Bond explore how brands and retailers engage consumers in a digitally driven world. And now, here are the CPG Guys. Hello and welcome to the CPG Guys podcast. I am your amiable co host, pbsb, who moonlights as head of industry and client engagement at Flywheel, the commerce acceleration division of Omnicom. Joining me is all, he is the chief Revenue Officer of Think Blue Consulting, former CCO at General Mills. He is paparazz to pop star daughters Rhea and Lara. He is my bff, my ride or die. He is the man known as Sree. So, Sree, I saw you this week. You want to talk about what we were doing, what it was all about, and what the premise of this episode is going to be.
- [00:58]
C
First of all, a big hello as we record this right after Cagney on a Saturday. You know, it's been a hectic conference. Reason we started the year ces, nrf, fmi, Midwinter. Then we went to Cagney, Cagny. So for the audience, our ever growing audience, which now outside of brands and retailers, also include service providers, Wall street analysts, if I can say so proudly, and also includes those that are not in our grocery industry, general merchandise.
- [01:24]
B
Yep.
- [01:25]
C
Fresh frozen toys, apparel agencies, I mean, news publications, they all come to us and tell us thank you for what you do for the industry. You know, so we want to make sure we explain things here. And so let me explain what Cagny is. Cagney stands first of all, C A G N Y. The Consumer Analyst Group of New York. It is an association made up of many or most of the Wall street analysts that can range from the Royal bank of Canada, rbc, Citibank, Morgan Stanley, that list goes on and on and on. Merrill Lynch, Chase, anybody in the business of investing your money, pension funds, things of that nature. So every year in February, down in Florida at the Hilton Insignia, get together for four days back to back to back, about 30 of the world's largest CPG companies come and present their outlook for 2026 and talk about how 2025 performed in front of the analysts. They invite a very small contingent of media, which we happen to be one, along with Wall Street Journal and a couple others. And so what we did this year is sit through the presentations and then get the chance to talk to senior leadership from many of those large companies. We sat through 21 presentations that are CPG, Beauty, Food, Beverage, skincare, personal care, Health and wellness care. What we are not going to report out on today or did not report out on LinkedIn was Tobacco and the ingredient companies. It pretty much covered 21 others. That's what Cagny is thoroughly enjoyable. You know, more than anything, Peter and I have said, we're lucky to have this podcast because we learn a ton. Listening straight to the executive minds, the CEOs and CFOs is special. We're lucky that we get to do this every single year, the whole week. So, Peter, get us going.
- [03:15]
B
Yeah, before I do that, Sri, I was remiss in not mentioning to the audience the importance of this weekend. A certain little girl in the Bond household turned seven years old on.
- [03:25]
C
Can we sing Happy Birthday?
- [03:26]
B
No, my voice is a little shot. You go ahead.
- [03:31]
C
Happy birthday to you Happy birthday to you Happy birthday, Dear Nadia Happy 7th birthday, dear girl Happy birthday to you. Make sure that universal march.
- [03:50]
B
Yeah, she's excited about that. Yeah. So thank you, Sri. So it's birthday festivities, so I just wanted to mention that. All right, so here's what we did. We sat through these presentations and we did so with a purpose. We said, okay, what are the things that we as practitioners should be looking at now? The analysts are very different, right, Sree? They tend to look for how are tariff rates and exchange rates affecting the business and factory productivity? That's not how we think about things. So, Sree, why don't you walk us through each of the seven categories that we use to evaluate the presentations that were in front of us.
- [04:37]
C
So here are the seven categories and I'll try to get into each of them. The first one as the CEOs present, you know, the presentations are good 45 minutes, so there's a reasonable amount of depth you can get and learn in these presentations. The first one is portfolio stability and innovation. As leadership speaks, we try to gauge the level of innovation forecasted in the upcoming year. What's up in the next few years? The role of R and D, how well informed the consumer insights us into the innovation pipeline. And that becomes our second criteria, consumer insights depth. Are they truly talking about the consumer with the command? Do they understand it? Do they have segmentation? Do they have cohorts? And whether they're publicly sharing that or not, they may inside the company. If they're not publicly sharing it, the analysts are never going to know the industry retailer's not going to know either. The third one, very important sign of our time, CEO after CEO after CEO came up and acknowledged sometimes it feels that one of the only sources of growth left. Other than Walmart Club which is really Costco and Sam's and the Value Channel which is really Aldi and Dollar General, there's no growth left in the ecosystem other than everybody across the board reported. E Commerce, E Commerce, E Commerce, E Commerce Growth in E Commerce Growth in the numbers. The growth rates are still phenomenal. No longer in the industry can we say the growth rates are phenomenal because the base is small. These companies now have huge basis. Some have multi billion dollar E commerce spaces. So we are looking for omnichannel depth of knowledge and what the CEOs and CFOs talk about and what are they going about a strategy. The fourth one we talk about is ppa. In these troubled times of volume and value seeking, what sort of price point architecture is there in the ecosystem, how they're handling revenue growth management? And we kind of club that together because RGM feeds ppa. PPA feeds back rgm. The fifth one is without AI these days you cannot have a conversation anywhere. Senior leadership with the rank and file, with the staff, with retail, with analysts, with reporters, with media. Retail media. So we were looking for a depth of what are you doing with AI? Just be honest. Some didn't even talk about it. Unfortunately, then we jump deep into two very important things. If innovation is not strong or even if innovation strong. Last year at Cagny everybody spoke of M and A as the only way. It's barely been 12 months. What are you doing with your M and A strategy? Are you reporting out against the MMA you have executed last three years? And lastly, probably the most important one, organic volume growth in a troubled economy and troubled volume challenges. Are you simply taking it on the chin and saying I'm sorry, are you trying to find white space? Are you trying to find adjacencies and battling through this as though you want to get out of it? And then we weighted all of those equally and we came up with average scores. But we're not going to share today because we have shared these scores via the articles we put out every single day we reported on mass market retailers. So if you missed it, please do Google Mass market Retailer Space, CPG guys or Cagney and you should be able to find out the summary of each day, very well organized, along with the composite score index for each company. So Peter, yeah, we're going to do this in three tiers I believe. So do you want to jump right into tier A? And who was at the bottom of tier C?
- [08:01]
B
I'll mention it, people, we'll have a Link in the show notes of this episode to the MMR articles that Sri and I co authored. So you'll be able to find them easy. So, as Sree mentioned, we created three tiers. There's a top tier, a mid tier and a lower tier. And unfortunately, the Cagney event kicked off with the very first presentation following.
- [08:23]
C
Actually, Peter, why don't you start with who all in the lower tier and what kind of score? What was the range of the score?
- [08:29]
B
And then we can get into. So the range, we scored it on a, on a out of 10. And the average composite score, the absolute worst, was a 3.6. The top of the lower tier was a 4.6. There were seven presentating presenting manufacturers that fell into the lower tier. The they were General Mills, Molson, Coors, mondelez Vita Coco, JBS, the J.M. smucker Company and PepsiCo. And not all of them scored poorly for the same reason. I will say this, if you did know M and A, you didn't buy anyone, you didn't sell anyone, you're going to get a big goose egg. So that has an effect on your composite score. That being said, you know, Sri, you
- [09:17]
C
know, I don't want to address that because, you know, the human mind is going to think maybe I don't need an M and A and that's why I don't do it. And you get a goose egg. No, you get a goose egg. If you're struggling with volume challenges, you don't have a great innovation portfolio and you don't have an M and A strategy.
- [09:33]
B
Yeah, I agree. I agree. So let's just talk right out of the gate. Sree, it's the elephant in the room. I know it's something you want to talk about. We were both very disappointed with what the leadership at General Mills presented, and I know the analysts were too. So, Sree, why don't you get into this for us? Would you?
- [09:52]
C
Yeah. As a shareholder of the company to the day, my beloved company, that I worked for a little bit of time there as the CCO out in the field every day, was disappointed to see it kick off that way. And what I felt was a little sobering for me and many of the analysts kind of said the exact same thing to us. And unfortunately, starting cagme that way, a decline of 8% in the share price right there on the spot after the presentation kind of kept the, the whole food sector depressed, I think, for at least one or two days, no matter who presented what little it is, it is a little sad. To see that. And I think the part that Peter and I concur was a little difficult for us in that was the general presentation anchored to a look. We're going to control the controllables. And there is a huge takedown in the surprise to the analysts in terms of the adjustment of what the volume results for the fiscal year 2026 will be and what the outlook go forward will be. It doesn't look like, at least at the surface level, that there seems to be a strategy to pull out and put some record wins pretty quickly. And then the remarkable experiences framework, which is referred to has been in place for quite a bit of time now. Five years, six years. I don't know, Peter, like, if the experience is fighting on all cylinders, as was communicated, why don't you have remarkable results? So overall, I think I'm going to say it was sobering.
- [11:19]
B
Close that one on. Here's the one I want to say about General Mills and then we'll move on. It was the same song as they sang last year. You know, they came, they disappointed they didn't deliver the numbers. They asked for a reset in after Cagney of last year. I think the analysts were expecting to give them a little bit of a pass so that they could reset. And all I heard was, well, we're going to chase the court quarterly numbers again and wow, we're not going to hit the numbers.
- [11:48]
C
Yeah. Publicly reported, as was publicly reported, General merge is investing back in pricing to bring back volume, but we don't see the results in the volume yet. You know, I'm going to wish the best because I am a stockholder and I have a lot of passion for the company in those categories that literally Peter during COVID is out and about five days a week in the field touching. So we see better days.
- [12:12]
B
We're going to talk when we look at the top tier about one manufacturer that decided to do something about the doldrums and they're positioning themselves for the future the way that I don't think General Mills is. And we'll discuss whether we think that that's something that is in need of in Minneapolis, But a couple other ones.
- [12:32]
C
The one I really want you to get into next is both our alma maters. You know, not that we're speaking alma maters here. They just happen to be the way the scoring came out. Talk to us about PepsiCo.
- [12:43]
B
So PepsiCo. I want to see problems with PepsiCo.
- [12:47]
C
Beloved, beloved company.
- [12:49]
B
Peter. I know. So their big announcement seemed to be around the fact that they are repositioning the lay's Brand Fresh new logo. They're getting rid of additives, preservatives. But honestly it wasn't a massive amount of exciting innovation. And they really didn't talk about what they needed to, which was they, they didn't talk revenue growth management, they didn't talk price pack architecture, they just said we're going to splash a new label on our bags. And they didn't really talk about how AI is enabling them to drive efficiency in their advertising, targeting or, or any of the business that they're doing. And moreover, their omnichannel understanding was mediocre at best.
- [13:40]
C
Which is very surprising, Peter, given that PepsiCo is an omnichannel leader and has been for 10 plus years.
- [13:47]
B
I mean PepsiCo wasn't the worst, but they underwhelmed us. Sri and I'm really especially considered who their major competition is who blew, blew them out of the water. Right. I mean, Coca Cola. And we'll talk about them in the, in the winner's circle. Coke. Coke had its game on. PepsiCo was on its heels. That's the best way I can describe it.
- [14:13]
C
Yeah. And then the big effort now one PepsiCo in North America. There's only one or two ways it's going to go. Either it's going to be a super hit by taking out a bunch of cost and operational rares and really making day to day operations a whole lot smoother or is going to overcomplicate a very well working DST machine owned by PepsiCo in Frito Lay and complicated with a Barbloan DST machine on the beverages side.
- [14:42]
B
And Sri. Let me just say this. There were others in the bottom tier like let's take Mondelez. Mondelez had a different problem. Their PPA and RGM was spot on. Right. Their problem was more that they didn't have any. Right. They didn't have an organic volume growth story, which is a big problem.
- [15:04]
C
Right.
- [15:04]
B
And they didn't really talk about how AI was redefining what they were doing. The, the most exciting thing that happened related to Mondelez were the protesters that broke into the conference and jumped on stage and they were talking about the rainforest in South America and growing cocoa and the perceived unfairness of the leadership.
- [15:27]
C
Yeah. We learned that it happens all the time with Mondelez. So while I was shocked, I learned later on talking to the analysts that this happens all the time.
- [15:36]
B
There's one company in the lower tier
- [15:39]
C
that I, before we leave, Mondelez, there's a couple things I do want to hit up. Right. So the part a couple things I struggled with. One was no discussion of M and A even though Mondelez is going through small M and as I believe publicly reported all the time. Why wasn't it discussed at all? Was a little bit of a surprise. Didn't get into consumer insights depth in any meaningful way. As one of the world's largest food companies who I know has a thorough understanding of the consumer speaking to that to rebound on volume growth would have been extremely helpful. Peter's already mentioned AI but tough this year to not refer to your AI initiatives. Maybe there is none genuinely which is fine. Then report against that. Mondellus is certainly great at Omnichannel but very few or no mentions whatsoever and where all the growth for a company sits or at least CEO. Say it again and again. That's where most of my growth is going to come from. And no acknowledgement. So in summary again I would say underwhelming like PepsiCo and General Mills.
- [16:38]
B
Yeah. Here's what I will say about everyone that was in the bottom tier. They all suffered at the hands of A Insofar as the highest score we gave on a composite for that particular attribute was A3.
- [16:52]
C
They either did mention that got the highest they did because they didn't mention it.
- [16:57]
B
Modelees barely mentioned it. J.M. smucker. Right. Very strong numbers but didn't talk about anything other than their brands. Gave no reference to that. I will give JM Smucker one shout out for the first time in five years. Sri, the CEO of Smuckers actually used the word Are you ready for this? Used the word E commerce in his presentation.
- [17:20]
C
No, that's.
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B
I was flabbergasted.
- [17:23]
C
Let me tell you what.
- [17:23]
B
But that was like one reference in five years.
- [17:26]
C
Yeah but I want to pat Smuckers as well as Vita Coco on the back because they really showed a good organic even PepsiCo to some extent showed comebacker volume growth story. Organic volume growth story coming. Hats off to JBS for a super M and a strategy of somewhat of an m. A strategy. PepsiCo always has something going on especially with acquisition of Poppy and merging it in Molson Coors and an M and A strategy. Let's close this tier out by discussing Molson Coors which presented at the end
- [18:01]
B
of day one bad situation for them. I think there was in the beer category.
- [18:05]
C
They acknowledged that it's a tough ride in the beer category and it's shrinking yet sad and tripling down on beer. I think it did draw the attention of the analysts in terms of a shrinking category and you're tripling down. What do we expect? And so let me close out the bottom tier with who all are there. It's Molson, Coors, General Mills, Mandelys, Vita Coco, JBS, Mockers, PepsiCo. Let's acknowledge these are some of our beloved brands. We love you. Hopefully next year we hope to see amazing presentations and results from each one of you. If you want to come on the show, chat with us, tell us what you're doing differently. You're always welcome to ping us and we'd love to have you and would like to dig in deeper, further and tell your story to the entire industry that we reach. All right, let's go to the middle tier. Is in the middle tier.
- [18:57]
B
So the middle tier, we scored them between a5.0 and a6.0. And they are including Newell Brands, Celsius holdings, which is an interesting company. They're a company that PepsiCo owns a piece of. They have warrants they can, they can exercise to buy out Celsius at some point. I wouldn't be surprised if that happened. Kraft Heinz. We saw Steve Kalhane, previously of Kalanova, show up to deliver the presentation. Conagra Brands, one of our favorites from an innovation standpoint, Hormel Foods. And at the top of the mid tier, Elf Beauty. So, Sree, who do you want to talk about first?
- [19:35]
C
Let's go to the top. Let's talk about Elf Beauty and what was going on with Elf Beauty. So Elf Beauty is a smaller company, obviously compared to some of the behemoths like PepsiCo and Mondelez, but growing pretty fast. Great presentation in terms of the command of the consumer. You know, the fact that they provide a deep, deep, deep value for the consumers. Excellent organic volume growth. If you want to dig in further, please go to our LinkedIn post we've shared and again in the digital line and also this podcast. We're going to share every presentation that was made so you can click on the LP1. But what a fabulous organic volume growth story. Portfolio looks solid across what they call eyes, lips and face. That's if you didn't know what ELF stands for. That's what it stands for. M and a pretty solid quite a bit of conversation on Omnichannel. Very little reference to PPA or rgm. Again, maybe they don't need it, but
- [20:32]
B
it's a beauty category.
- [20:36]
C
Tell us your story regardless if I understand beauty category, but RGM doesn't excuse anybody. But Peter, the one that I missed out on, Elf Beauty, which kind of dragged this score down a little bit was no mention of AI In a company where you think Beauty creative AI should be a trifle, shouldn't it Peter?
- [20:56]
B
Well, SRI, if there is evidence that it should have all you need to look at and we'll get to this later. The ultimate winner, the highest score of the day competes with elf beauty and they received a score of 10. So we'll get into that. But you're right, given their peer set, they should have been talking about it. They didn't and that is what kept them in the mid tier. If they had digged a little deeper and shown how they were using it, they would have been a top tier scorer here. But, but that was a big one. You know for, for me the ones that were the, the tough one was actually I think Steve Callahane had a very difficult situation. He comes in with the announcement already that they're going to split the company in two and he makes, he drops last week that guess what, I'm actually not going to split the company up right now. I need to shore up the business. I'm going to keep it together. And he doesn't have a really great story. Very bad organic growth. He's not selling negative three and a
- [22:02]
C
half is the forecast 2026 fiscal and
- [22:05]
B
if he's not selling half the company he certainly doesn't have any money to buy anything. That's the last thing they need. So M and A is not going to score very well. Did not talk at all about how AI can help transform and when asked by, you know, the biggest thing that surprised me is when the presentation was over, before they went into the other room they took one or two questions from the audience and someone asked him like what? What's the reason to believe that you're going to be able to turn this around given that we heard that last year from your predecessor and Steve said because we've got really great brands and I don't think that's an answer that analysts want to hear anymore. SRI that we're going to succeed because we've got really great brands that I'll
- [22:55]
C
make an exception to that. Peter, lots of these companies have really great brands. I mean we can't debate that. They've been industrial for years. General Mills is an example. PepsiCo is an example. Bondeles is an example. But tell us the reason to believe why your industrial very large size brands, what is the new equity they're bringing that can add upon the equity that exists which will bring back volume growth. One thing I want to point out Peter, you know, in that transformation, you know, not to separate. They are targeting a $2.5 billion of gross efficiencies by the end of 2026. And they've committed to reinvesting 600 million of that into the fix and accelerate strategy that goes across product packaging, pricing, marketing, sales and R and D. At the surface level, we're excited about 600 million going into all of that. But there is a story of concern, at least Peter and I have. It's not a Kraft Heinz story or concern. It's an industry concern. The amount of times we heard leadership from companies pointing out to cost cuts and these are not small numbers. 400 million, 500 million. 1 billion, 2 and a half billion talent. Any concerns there, Peter?
- [24:07]
B
Yeah. Here's what I think with respect to Kraft Heinz. I'm not too worried about the future of talent. If his first major hire was any indication, bringing over one of his Kellanova colleagues to run North America, I think
- [24:22]
C
fantastic hire, by the way. I mean, he's bringing trusted people that he knows of. I mean, a good leader does that. We hope to see the results. It's actually a good start.
- [24:31]
B
I will not be surprised to see more people formerly with Kellanova now mars snacking making their way over to Kraft Heinz. Sree, I think talent is a critical issue. But the one thing I do want to talk about.
- [24:46]
C
One second, Peter. I want to just summarize. Kraft Heinz, you know, because of what's going on. Right. They've come back and said we're not going to separate the company into Kraft and Heinz. So I want to talk about each of the individual scores real quick and say what we love by what we did. Portfolio stability and innovation. Pretty solid.
- [25:04]
B
Yeah.
- [25:04]
C
Channel understanding. They talked about it. Steve mentioned it. Kind of told us the playbook. Deep, deep, deep conversation on pp which is much needed for these times. As well as our RGM is informing him on the pga. So well done. Their understanding of the consumer was pretty deep. Where I think there were misses is obviously in a company that's now looking not to split. We weren't expecting anything M and A. But tell us why. Tell us there is to be nothing reasonable.
- [25:33]
B
Sure.
- [25:33]
C
Especially on the Wall street last year everyone came and said this is what's going to be. The analysts were looking forward to that. The second one is. But I think it was disappointing for me was obviously when you're down three and a half in volume growth, you're not. We didn't score it to zero. We scored it a little bit for showing the resiliency to come back and fight with the 600 million investment. But that was low. And the last one was if you're going to go through a two and a half billion dollar transformation and invest 600 million, how are you going to do it without the use of AI? Gone are the days where you can use these management consultants and do it when you have something called an AI which is infinitely smarter because of its processing capacity than you, Peter, than me, the CPG guys, anybody. All right, take it away.
- [26:18]
B
I want to say one of the presentations we always love is conagra for a couple reasons. One, their innovation pipeline is always spot to customer trends or consumer trends rather. Our friend Bob does such a phenomenal job like painting the picture of how consumer insights.
- [26:37]
C
Can we talk about Bob Nolan for a hot minute over here?
- [26:39]
B
Let's do it. He's a legend. He is a legend.
- [26:43]
C
Dude knows the consumer inside out. And a little bit of a lesson I think this year for other leadership from other companies. If your volume's challenged, note to self, bring your consumer insights leader to tell us what is going on. How are you going to get command back? And did Bob Nolan do that or what? Peter, hats off to you, my friend.
- [27:05]
B
He nailed it. He nailed it. So I think conagra, conagra suffered because they had no a story. They really didn't touch on PPA or RGM and they really didn't touch on the omnichannel side of things. They tend to be very grocery focused given that Frozen is a big part of their business. But the one, the one last one I want to call out in this category, SREE is Newell. They were kind of at the bottom of the tier, but there's one area where they actually did very well. What was that? Sree? As I recall, it was their AI. They were definitely very AI forward. Do you want to talk about that particular process?
- [27:46]
C
Let's get into the AI aspect. Peter. So boy, oh boy, oh boy, were we in for a surprise. Half the presentation was about how they're using AI clean rooms. The CEO spoke to clean rooms. Peter. I fell off my chair. They demonstrated a complete understanding of the consumer. As a result, the fact that the priority now in the US market is going to be Millennials and Gen Z because brands like Sharpie, Greco and Rubbermaid and Coleman, they're four big brands. AI is informing them that's where they need to chase. So they basically came out and said, all right, through our AI strategy, we're learning the where to play and how to win. Is going to be here. My absolute, absolute hats off for the simplification process. You're going through heavily led on AI, a project called Quantum Leap, about 100 active agents, agent TKI in action on innovation, productivity, investments, retail execution. Hallelujah and hats off.
- [28:52]
B
Shree. I wouldn't expect you to know this because I think you were, you were. I don't even know if you'd come to Virginia Tech at this point, but one of the favorite TV shows in the Bond household is a TV show from NBC back in the day called Quantum Leap. And I love the fact that they named their project Quantum Leap. So they, they kind of had me at hello with respect to that. But I agree with you. They did very well in that area. It's unfortunately for Newell. They got, they got, they actually had a good store, a half decent M and a story more than others. Their problem, they really were suffering from bad organic growth. They really barely touched on PPA and rgm and their omnichannel understanding was not on display.
- [29:36]
C
Right, why don't we wrap up this section, Peter, with a summary of who all were in this middle tier.
- [29:42]
B
Yeah, so we started with at the bottom of the tier was Newell. Above that, Celsius Holdings, Kraft Heinz, ConAgra, Hormel Foods. We didn't really talk about them. And Elf Beauty. We're not, we're not going to go into everybody here. If you want to know more, just read. They can read the articles on MMR if they want to get started.
- [30:01]
C
We have in depth, in depth reporting out on every single one of these on LinkedIn. All you got to do is go to the CPGuys channel scroll and you'll find it organized by day.
- [30:10]
B
Let's go to the top tier. Let's. Let's talk about what we really like.
- [30:13]
C
Bosses. And first, Peter, before you report out and who made it to the top and who's at the bottom of the top tier? Give me the names. Who's in the top tier?
- [30:20]
B
Well, I'm going to tell you that the top tier ranged from a score of 7.1 all the way up to an actual 9.0. Sree. Included in this we have Utz, Unilever, Coca Cola, Clorox, Church and Dwight, Colgate, Palmolive racket, Kimberly Clark, McQueen, Cormac, P&G and L'.
- [30:39]
A
Oreal.
- [30:39]
B
So the thing about these guys is there was one like there was one company. There were two companies, sree, that got goose eggs on M and A and still made it into the top tier. That told tell Told us that they were on point everywhere else and where they presented. Right.
- [30:55]
C
So they hit them both up first. Let's take the one up top. Second in our rating, just behind there. We'll come back to who the leader was who made it up top. But it's P and G. When their new CEO Salish stepped on stage, he demonstrated. This is not a dig on other CEOs but man, when your CEO walks up and he can talk everything from your entire portfolio in depth. AI models that they're creating with it and informing all facets of the company and he talked about it before he handed it off to their cio. Absolute mastery of E commerce and omnichannel. And when you have leadership that does that, it's going to permeate through the company. And then it's P and G. Complete demonstration of consumer insights, depth and a promise to sustain volume growth with crazy market share in so many categories that they lead in. Peter, the story is story of P and G continues to be one of the best in the industry and they rise all the way to the top. What a great CEO they have found. Congratulations to him on his promotion there recently. He walked in and demonstrated a complete mastery masterclass on how to get up on stage and what to talk about and the confidence with which he did it. Omg. Peter, what do you think about P and G?
- [32:13]
B
Yeah, I would say he's not One of those CEOs that just reads off of the slide. There were quite a number of them at Cagny. He was not one of them. He could double click down.
- [32:24]
C
He said your favorite word.
- [32:26]
B
Yeah, he used user generated content.
- [32:28]
C
Can you please explain what that means?
- [32:30]
B
So user generated content is content that's not created by the brand, it's not created by the retailers, created by consumers. It's everything from people who write ratings and reviews on products that appear on PDPs, but it's also creators, YouTube. You know, people are on YouTube and TikTok and Instagram talking their influencers. Those are all creating user generated content.
- [32:53]
C
One more word got my eye. And don't call me petty for saying it because the business is much more than ugc. And the second word, when your CEO says my highest growth channel is E commerce and he talks about UGC and ratings and reviews. Hallelujah.
- [33:07]
B
Yeah, that was quite impressive. Moreover, just the mastery of how they're applying AI to so much of what's driving success.
- [33:18]
C
Agentic shopping that are deep, deep, deep into understanding.
- [33:22]
B
They're way ahead of journey, they're way ahead of it. And then hats off, just being able to talk in depth about the omnichannel understanding and how important E commerce was to their business and what the customer journey is like. Really powerful. You know they didn't score on A, didn't need to. They've got the right portfolio for what they need to do. Strong on organic growth. The only thing they didn't come to the table with that they usually do SRI is price back architecture.
- [33:50]
C
They related to RGM fueling strategy but we didn't get into any depth. But you know, still rising up to be second, you know, because pretty much every other aspect of the presentation just blew us away. But Peter, who was up top.
- [34:06]
B
Yeah, well I, I want to say one more because you mentioned that there were two that didn't score at all on M and A. The other one was Coca Cola. We really like their presentation. They have a really great organic growth story. Their numbers are just phenomenal. I think a couple of the. You were talking to another CFO who just said what am I, what can I say? They're just, they're kicking butt. They have great numbers. You know what, when you walk into this conference and you got great numbers, you can tell any story you want. But they certainly had a very strong, you know. You know what's amazing me Sree the Coca Cola not even trademark Coke because trademark Coke includes Coke, Diet Coke, Coke Zero. Just the brand Coke. Just the brand Coke is three times larger than general milk. It's 50 billion plus. That is incredible, right?
- [34:57]
C
The sheer size of my dog General it's like larger than most of the brands that present.
- [35:02]
B
My point is that was the number that was sticking in my head as being it's three times larger.
- [35:06]
A
It was not.
- [35:07]
B
That was the only thing the statement
- [35:08]
C
that blew me away was a CEO walking up and opening the presentation with I still believe there's plenty of opportunities in the categories.
- [35:16]
B
You don't hear that in a very mature way.
- [35:20]
C
He didn't say this is massive strategy that's going to last three years and bringing a framework, yada yada yada. He said I'm going to make small improvements every day locally. I'm not going to fall back in category shrink or control what you can and give that as much. I just going to make marginal improvements but I'm going to make it locally in every market from manufacturing to the route to understand the consumer to the price point. Yeah, heck yeah, man.
- [35:48]
B
And their in depth consumer insights was so evident. Sree Coca Cola is a winner. They have been for the Last couple of years, while a lot of other companies have been taking it on the chin during the pandemic and the growth challenges that have been experienced in store Coca Cola saying, nope, that's not how we're doing it. We're doing just fine. And we've got a plan. We've got a plan and we're activating it.
- [36:13]
C
Absolutely. Some of the others in this category, let's jump into Kimberly Clark, which scored very high along with McCormick. Why don't you start with McCormick? What happened there? What did we see?
- [36:23]
B
You know, McCormick's a really interesting story. They scored pretty well across everything. You know, portfolio strategy is very strong. They talked about how AI is doing.
- [36:32]
C
They dominate spice.
- [36:34]
B
They do. But here's the one thing that people need to remember about McCormick. Sri It's a contract category at retail. What do I mean by contract category? This is something that I'm personally experienced in because I used to work at Hart's Pet Care, and then when I was iri, I was on site at Campbell's Soup at the time. Contract pet care. Contract space in the store means they essentially buy real estate, not slotting allowance. Literally entire linear footage of shelf.
- [37:06]
C
Right.
- [37:07]
B
For years back in the 90s and before the pet supply section of the pet aisle was contracted, hearts would just buy out 16ft of space. And they can merchandise any way they wanted. Right. And the same was for Campbell's Soup. They would put it in those gravity fed soup can holders. Right. Well, guess what? Some of that has gone away. You don't see that in the pet category anymore. You don't see that in the soup category anymore. You do still see it in spices. McCormick is basically, they pay to own the spice category. They own that real estate. To a large degree, that's important. But here's what I want people to remember. The biggest problem with E commerce is profitability. Right. The way to solve the profitability problem with E Commerce on retailers is to make the basket more profitable. How do you do that? And if you're doing recipes for the love of God, people make sure spices are in the recipe. Why do you want to do that? Because adding a little jar of spices takes that transaction from being wildly unprofitable to being wildly profitable. McCormick is the key to profitability.
- [38:30]
C
Are you saying in the food chain full of sugar makes this medicine go down?
- [38:34]
B
M SRI I'm saying that if you are, if you've got an E Commerce, if you got a recipe engine on your site, you better darn well make sure spices are a part of the recipe output because that's what's going to bring profit to the category for all of these grocery, these food and beverage retailers. That's what I want to say about McCormick. Anything you want to talk about?
- [38:59]
C
I'm just impressed. You know, it may be a contract category, but you have to retain your right to run the contract category with the performance that you need to have. They are dominating spices. They have been for a long, long time. The organic volume growth story. Solid. They have executed very solid. PPA informed by rgm. They demonstrated deep consumer insights, depth. They're using AI to inform their strategies. The portfolio is pretty solid. The innovation that's coming out, especially the acknowledgement of how they need to raise the bar on heat or hot sauce, et cetera, was fabulous. The type of innovation they have in that category is fabulous. They recognize that Gen Z, that's what they're after. Millennials, that's what they're after. So McCormick rose way up top in the top tier. So congratulations to them. But let's jump into Kimberly Clark.
- [39:49]
B
You, you go there, Sree. That was, that was your area of focus.
- [39:53]
C
All right, so what I loved about Kimberly Clark is the M and A that they have going on upcoming. I got to actually sit down with the Chief Growth officer, Patricia and Craig, the Chief Science R and D officer. Yep, yep, that podcast episode will be coming out shortly. But goodness, those guys knew exactly what they were speaking about. What I also loved about Kimberly Clark, he might have been the only one, the CEO that bought his leadership team and let the experts do the speaking. For example, Craig talked about innovation and R and D, Patricia talked about what's going on with brand equity, etc. And folks, that episode will be out shortly, in a week and a half or so. Please do chime in and listen in. It is a master class given by the both of them working together, brand and R and D to put innovation and manage brands in the marketplace. Other things I love super portfolio. The innovation portfolio is so strong. They are doing deep consumer insights to try and understand where they need to do it. And they're using AI Pretty in depth, Peter, in all aspects of engineering to figure out, you know, I'm not going to give away the plot because I want people to listen to our episode, but it's going into R and D and engineering in a very meaningful way. When you hear the episode, you're going to learn how to. Kimberly Clark blew me away. I mean, it's up top in the top tier for a reason. They've got a Solid story. They're dominating what they're doing. Talk to us about what's going on on the M and A side with Kimberly Clark, who's coming in.
- [41:28]
B
So they're in the process of trying to be a little bit more like P and G. They are acquiring Kenview. If you think about it, what is P and G? They do household products, particularly paper, and then they have some healthcare. Well, what does Kimberly?
- [41:41]
C
The acquisition isn't complete, Peter. I believe it's targeted for mid century.
- [41:44]
B
No, no, that's what I mean. Yeah. But my point is they're trying to be more like P and G in being more directly competitive across P&G's entire portfolio.
- [41:57]
C
Couldn't agree more, Peter. I'm waiting to see the outcome of that. But they will be a dominant player. There's also a part in the podcast where they, you know, the CEO also spoke to it where, you know, they feel now they can serve the newborn with the portfolio. They already have the middle aged person, health and wellness and also the older person in terms of. So they have now the journey they can be on the journey of life, which is spectacular. Please do check out the presentation in the digital light and also the episode. Y' all are going to find that incredible. There are a couple more that we want to hit up which we haven't. And let's talk about Unilever. Peter, what did you like about Unilever and how did uts make it to the top tier? Let's get into Unilever first.
- [42:42]
B
Well, Unilever, just across the board, very strong AI, very strong omnichannel understanding and a strong portfolio. You know, their organic growth story wasn't quite as good, but wow, did they know their consumer insights. You know, I was the only place that Unilever came up short was talking about price pack architecture and revenue growth management. And I think they probably could have used a little more RGM since their organic volume growth story wasn't as strong as it as it could have been. But their numbers were very, very strong, particularly in AI. The work they're doing around audience building, targeting. I'm very impressed with Unilever. We've got some friends who work there. I think they do a pretty good job. Utz is different stories. UTZ was interesting.
- [43:29]
C
Hold on, Peter. I want to get into you a little more. There's something very interesting. I learned that desired scale innovation strategy which leverages AI. He referred to SASE brand attributes. And I want to break down what SASE stands for. Sas. That's why science Aesthetics, sensorials, superiority, young, just executing in the marketplace. And then the other thing I want to mention, which is a conscious mention by the CEO which the Wall street analyst dug into was 8 of 10 board members are new to the company. 9 of 11 leadership team members on you. Now normally the knee jerk reaction to that would be my God, you have huge turnover. And he addressed it head on and said it's a choice we've made because we want fresh blood to come in. Move these categories to be on hyper growth and the way you do it is bringing people from the outside in a large CPG company. Peter, how often do you see that attitude?
- [44:25]
B
Not often. Sree. There are quite a number of companies we saw today that I would say how do I, how can I be diplomatic about it? Their leadership is mired in a culture of all the leaders came up through the organization. They know the brand new, fresh, any new fresh blood that's come into that company more often than not come into the IT area, not so much the brand leadership and the marketing. And if they do come in, they're not there that long.
- [44:58]
C
And Peter, so before I leave Unity, there's a couple things I do want to mention. They have 16 and a half thousand patents which are feeding their outcomes. Secondly, they have 180,000 content creators adopting a in the process to do it, which means they have a 700% increase in the frequency of the CEO talked about the number of posts being important. Holy moly, Peter. And this is what separates the winners from the ones that are in the bottom tiers. When leadership walks up and shows a command of how to execute in the marketplace and also brings the leadership team to talk about Expertise and some CEOs simply just are P and L managers and that I know you're in a Wall street conference, your volume is heavily troubled. Numbers alone aren't going to cut it. Strategy is equally important and needs to be put out on the high. So I really, really wanted to mention, mention that of the Unilever team that was on stage. It was incredible watching that. Now you wanted, did you want to hit up Clorox?
- [46:01]
B
I want to talk, I want to talk, I want to talk about uts very quickly. UTS is a really great story because theirs is all about distribution, right? They are primarily operating in the northeast in Washington state and they've just started to break into California. They just talked about all the points of distribution where they, they, their products aren't there and all they want to focus on is let me get my products into distribution once they're there. My products are selling.
- [46:28]
C
Peter, what state are they coming to? California. So you and I, when they're here in distribution, are going to go to a store, we're going to look at the portfolio and we're going to report back. I am thrilled.
- [46:42]
B
I have UTs, one of my people. Why do you like UTs in particular? Sri. I can think of a particular building in the Bronx that is populated where if you're going to buy chips at a ball game, they're us. Who would that be? New York.
- [47:02]
C
New York.
- [47:03]
B
Yeah, exactly. Can't wait. They are the official. The potato chip of the New York Yankees. So I'm not surprised.
- [47:09]
C
I can't wait for it to come to California. The move to California is huge. Huge for them from a distribution standpoint. I can't remember the exact number, but if I remember correctly mentioned, 300 basis points of growth coming via distribution in California. Man, I can't wait to taste the amazing portfolio that's going to come over here. I wish UTS the best. I can't wait to see it. One other thing I think will be fun to see in the marketplace is the launch of the UTS protein pretzels, which are on page 58 and 59 off the deck, which again, you can find a link in the digital liner notes. Boulder Canyon Chips is crushing it. Growing as fast. I mean, they got a portfolio made for now, made for tomorrow in the tough category of salty snacks. In an environment where health and medicine
- [47:52]
B
is coming out, they're winning.
- [47:53]
C
They've got amazing choice, super PPA and RGM discussions. So I can't wait for it to show up in California. All right, what do we got next?
- [48:01]
B
All right, so Sree, I want to talk about Colgate because this was a very interesting story. You know what I like about Colgate is every year they come not just with their CEO and their cfo, they always bring someone else's. Different story, right? A couple years ago they had Brigitte King, their chief digital officer. They had an international person last year. This year they brought someone from their Hills Pet nutrition division. And they really painted a picture of. They're subtle, right? But they say, listen, this is how we're using AI and we're using AI to build audiences. And we've got clean rooms that are bringing all these disparate data sources together. The mosaic was so impressive. Sri Colgate. There's portfolio stability and innovation spot on. Their AI acknowledgement, Nothing. Nothing better, right?
- [49:06]
C
Solid command of brick and mortar, everything.
- [49:09]
B
I mean, Colgate across the Board a little lower on M and A but
- [49:14]
C
didn't need to be that referred to DTC. And that how they're actually taking steps to understand and manage to a channel where DTC is playing a huge. DTC is playing a huge role in every.
- [49:25]
B
Well, you know. So their skincare business care about DTC is a mistake.
- [49:29]
C
It's taking 50 basis points of growth. When you start folic volume you're down minus 2 minus 3. 50 basis points is a gift. Yeah.
- [49:37]
B
But you know what? Their CP skincare business right. Includes a number of different brands that they sell D to C. And the reason that's so important Sree is they're using that proprietary first party consumption data to feed into all the clean rooms
- [49:56]
C
that they have 70 rooms in play 17.
- [50:00]
B
That's incredible. It's incredible. Sri Worldwide, Colgate, Colgate and then when, when, when the woman from Hills came. I've asked her to come on the podcast so stay tuned people.
- [50:13]
C
She knew her stuff inside out.
- [50:14]
B
Wow. Just such in depth knowledge, consumer insights, how they're. How they're using media. What I heard, I heard a couple things sri. I heard that they're conversion improvement rate because of the clean room data and the audience targeting 2x 2x they're improving.
- [50:36]
C
The media is now focused on moments that matter where people are shopping as opposed to generic media across multiple channels. They're going where the consumer is shopping, which is awesome.
- [50:46]
B
Over 80% of their media investment is falling under marketing mix, modeling, measurement. It's incredible. Sri, they've got a great story. Congratulations to that to everyone. Noel Wallace, the CEO had delivered a great presentation. They have a great story. Kudos to our friends at Colgate Palmolive. They seem to touch on everything.
- [51:08]
C
Mention Peter to the upcoming innovation Whipped. Hello toothpaste. I've never seen a whipped toothpaste.
- [51:15]
B
What toothpaste.
- [51:16]
C
How it is I will be that one that goes and gets it from the store first. I can't wait to try it. All right now let's wrap up the top tier with cool. Just let's name who all went this.
- [51:27]
B
So Sree, let me go through the the bottom, the top tier. From bottom to top. Utzbrands, Unilever, Coca Cola, Clorox Church and Dwight Colgate. Palmolive reckitt, Kimberly Clark, McCormick, PNG. And at the top of the list was L'.
- [51:41]
A
Oreal.
- [51:42]
B
So Sree, L'.
- [51:43]
A
Oreal.
- [51:44]
B
Yeah, absolutely. They weren't there last year. They are this year. But Sree, what are we talking in generality? What kind of Set apart the top tier from the other two. What were the attributes?
- [51:55]
C
Let me ask. L' Oreal pr. We are welcome to come on the show. Want to dig in further while you're up top? You're welcome to. Let's have a discussion here on all the amazing things you're doing. So what separates those at the top from those at the bottom? Right. 1. I would say leadership dominance on the stage of knowing the consumer portfolio. Depth even in a tough environment of a volume challenge economy. Finding white spaces. You know, the Coca Cola especially mentioning I'm going to make minor marginal improvements, but I'm going to do it at scale. Having that desire, thorough understanding of omnichannel social. This is where people shop, even food these days. You have to be able to influence them on the purchase, even if they're not buying. That's where everything starts. We are in a. I'm sorry, we all live in a world of AI. So how depth is the use of AI? The winners clearly were separated from those at the bottom. Are you truly doing PPA and RGM or you just mentioning RGM informed ppa? That was another one that I felt. But most importantly, Peter, I'll still come back with the same thing. Leadership does make a difference. We saw some amazing boss leaders and then we saw ones with the same story again and again. Looked a little lost, to be honest. That's what separated up top from those that were not at up top. Any closing thoughts, Lizzie? Closing?
- [53:15]
B
Yeah, some of the things that happened kind of behind the scenes. Sree. We had a lovely dinner on Wednesday night with two staff reporters of the Wall Street Journal. Our friend Laura Cooper, who follows the beverage, alcohol and tobacco businesses, and her colleague Jesse Newman, who's more focused on the food clients. It was a really interesting conversation. Those two are legitimate journalists. You and I are not journalists. We are pundits. Let's be honest, right? We talk about this stuff. Wait, we have a hack? No, we're not hacks, but we have definitive opinions. They write credible, journalistic. They do the research the right way. They have ethical guidelines. Not that we're not ethical, it's that they have very strict guidelines. We found that out at dinner that we broke up the check so that they could pay for it. Not only just between the two of them, but they each had to pay for their own so that there's a trace to everything they're doing. Because they hold their work to the highest standards of integrity. And as well they should, they are writing for arguably the most venerable newspaper in the world from a business standpoint at least. So that was really fun. We got to award our dear friend Nick Modi from RBC Capital. Having been on the podcast five times, we gave him his five timer jacket, his varsity jacket. The video is on LinkedIn. Please check it out. It was really big. Sree. What else from your perspective?
- [54:44]
C
Nick, you're always welcome on the show. We love you man. And let's wrap it up. Peter. I think we covered this pretty in depth. A reminder to the audience that please, please, please. Every link to all the presentations is in the digital line and notes of this episode. You can easily go to our LinkedIn channel and find our review of every single presentation. It was almost near real time dynamic Live after the presentation and again we did an exclusive with Mass Market retailers owned by Retail Media IQ four days Summaries. If you want to take the shorter version executive summaries, you can find it simply by going to Google and typing Cagney Space Mass Market Retailer to all our fans, we love you. We want to thank our sponsors for the clicks likes. Thank you for following us. This show doesn't exist without you. Do remember we got a Shop Talk. We got a big party coming. If you haven't registered already, get in touch with us. We'd love to see at Shop Talk. We got a lot of stuff going on as usual. We're hosting dinners. We'll be on our feet like we always do at these events. And then we have some fun stuff this week as we head to E Tail West. And with that, Peter, a pleasure doing this with you. Episode over episode over episode. Thank you Peter. And that Go ahead Peter.
- [55:57]
B
Thank you sri. I do want to make a quick shout out to our friend Jeff Friedman at retail MediaIQ and mass market Retailer for asking us to write this series of articles during week. That was great and I am looking forward to assuming that I can get through this snowstorm that's about to hit the east coast. I will join you out at Etail west, but if not, you may be doing that a little bit solo. SRI to our audience. Thanks as always. We look forward to speaking with you on the next episode of the CPG Guys Podcast.
- [56:28]
C
Goodbye.
- [56:41]
A
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