Loading summary
Transcript7 lines
- [00:00]
A
Foreign It's May 5, 2026 and this is the Commerce Riff brought to you by the CPG guys. 10 minutes of the news stories that matter in Commerce this week. I'm your co host pbsb and I'm joined as always by Papa Raj, the father of pop stars, co founder of Think Blue Consulting, sri. We're in Cincinnati today. What's going on?
- [00:24]
B
You know, what with Kruger doing some recordings, having some nice dinners and also speaking live at the Ignite CPG Insights and Analytics event opening keynote.
- [00:36]
A
All right, let's get into it. Four stories this week and they'll span the full spectrum. A legacy CPG giant swinging for generational scale. A storied home retailer clawing its way back from the dead. The world's largest retailer opening up its data layer to the advertising ecosystem and a brand building powerhouse posting strong numbers even while mid restructure. Let me kick it off. Kimberly Clark Momentum, kenview and a $40 billion bet because Q1 2026 was a quarter that deserves attention both for what it delivered for Kimberly Clark and for what it signals about where this company is headed. Maker of Kleenex and Huggies, posted a profit of $665 million or $2 a share, up from 567 million or a buck 70 a share a year ago, adjusted to EPS came in at 1.97, ahead of Wall Street's expectations of $1.93. Revenue rose 2.7% to 4.16 billion, topping estimates of 4.09 billion. CEO Mike Su called out consumer inspired innovation, brand love and strong execution and noted that share momentum continued to build even amid macroeconomic and geopolitical headwinds. But here's a real headline buried inside these numbers. $0.13 of that buck 97 adjusted EPS came from the pending acquisition of Kenview. That's right, Tylenol and Listerine maker that J and J spun out a couple of years ago. The $40 billion deal is expected to close in the second half of 2026. Management is already talking about it as a generational value creation opportunity. Think about what that combination looks like. Kimberly Clark is already one of the most efficient operators in cpg. They've spent years building cost discipline and category leadership in diapers, tissue and professional hygiene. Now they're layering in Kenview's OTC Health portfolio, Tylenol, Listerine, Band Aid, Aveeno. That's a dramatically expanded presence at the intersection of household essentials and everyday health. There are risks, of course. Executives noted a potential $50 million to hit the bottom line from Middle east conflict related cost pressures. That's the Iran war. If no one else understands that flagged 150 to $170 million in gross incremental input costs in the second half of the year if oil prices remained elevated. Crucially those costs are not in the current outlook. So the back half of 2026 will be a real test of how well KC can manage integration complexity alongside commodity headwinds. The CPG lens Really Clark is making a bet that scale and health and hygiene is the winning long term position and that operating leverage across a unified portfolio can fund through macroeconomic friction. If the Kennedy integration executes cleanly, that would be remembered as one of the most consequential CPG deals of the decade. Watch the shelf reset and watch the shelf space negotiations that follow.
- [03:46]
B
Sri, you know what? I'm going to hold our CPG guys opinion strong that this merger creates competition for P and G creates competition for trips and at the shelf. So here we go. Let's go from earnings releases to an actual restructuring and it is none other than Unilever, an org that we actually loved on stage at Cagny. This is a company that's actively mid transformation in Q1 26 showed the very early returns on a very deliberate what I would call a strategic pivot for the company. Underlying sales had gone up by 3.8% year over year in the first quarter ahead of company compiled analyst estimates of 3.6. So they actually beat it. Peter. Emerging markets led the way up 5.7%. Home care stood out. Organic sales growth of 6.1% entirely volume driven clap clap clap. Latin America delivered 6.2% organic growth with both volume and price contributing full year guidance is for underlying sales at the bottom end of its 4 to 6% multi year range. So one of the few in the industry still giving growth in volume as a guidance. But the biggest story is the portfolio restructuring happening underneath these results. About a month ago Unilever struck a deal with McCormick to combine their food businesses into a new company valued at $65 billion including debt. Unilevy shareholders on hold a 65% stake, so roughly 2/3. The deal has drawn skepticism from European investors who have any exposure to leverage US listed food assets. But consistent with the strategic logic Fernando Fernandez has been executing since he took the boss's chair. The through line though Unilever systematically shed its food exposure for several years. If you remember they spun out Magnum Ice cream, one of our personal favorites which by the way reported 4.4% organic sales growth in Q1, beating its own analyst estimates at 2.6%, posting 1.77 billion euros in revenue. They sold off the tea business and divested margarine and spreads and now by combining the remaining portfolio with McCormick, essentially completing the transformation into beauty, personal care and home care company another behemoth along with the previous merger we talked about, there's some trifecta competition here. What's the thesis for this? The premium high engagement consumer category, Skin care, home hygiene are more defensible, higher margin of scale and food of course with private label pressure and commodity volatility eat into returns. And I know all that well through my career at PepsiCo Feeder and none other than General Mills Fernandez has replaced significant leadership out of the white collar workforce and is running a Genuine org makeover Q1 results. Actually, Peter suggests it's working, but the McCormick integration is the real PoC for CPG peers and retail media practitioners. Category prioritization is a live signal About My Premium Chalk Page battles will intensify Beauty and personal care already highly competitive in both digital and more focused unity with fewer categories to fund more Resource Reply will be a shopper competitive in the aisles in the digital shop that matter most to it. Now I would love for you to compare the first story and the second story. Ken View Casey Unilever Strengthening McCormick.
- [06:58]
A
At the CPG Guys, we're excited to partner with today's sponsor, Confido. Think about how many different workflows your team is managing right now. Your sales team is planning promotions in a spreadsheet. Your finance team is manually managing deductions from a double dozen different retailer portals. Your ops team is building forecasts in a totally separate tool. When something changes, a promotion shifts. A big deduction comes in. Nobody finds out until it's already a problem. Most CPG brands are running these processes in silos and the cost isn't just time, it's the decisions that don't get made or get made on bad information. Confido is the end to end platform for CBG operations built specifically specifically for brands to run all of it in one place. Trade promotion, management, deductions disputes, sales forecasting, demand planning, and retail analytics. When your trade events are connected to your forecasts and your deductions are automatically matched to your promotions, your whole team is finally working from the same picture. Over 200 CPG brands including Olipop, Bear Bells and Simple Mills already use it. Go to confidotech.com cpguys to learn more. That's confidotech.com CPG guys. Absolutely sree. All right. Walmart Data Ventures just made a move that changes the architecture of how retail media planning and measurement work at Walmart. They've introduced intellamedia Data Feed, a new API based product that allows advertisers to secure share Walmart's first party operational and retail data with their agency and technology partners. We're talking approximately 500 operational and retail data elements, digital transactability, item attributes, omnichannel sales, inventory signals, the whole shebang SRI all flowing directly to partners platforms of choice via scalable API access. What problem does this solve? Well, until now media teams and tech partners were operating with an incomplete picture. They had slices of advertising data but not the full operational and retail context needed to connect media decisions to retail outcomes. Planning happened in one silo, optimization happened in another. Measurement came later. Separately, Scintilla Media Data feed collapses osilis by giving partners, agencies, DSPs, measurement vendors a real time shared view of Omnichannel business performance. The results that Walmart is already citing are quite compelling. A leading CPG brand use Scintilla data to identify competitive share loss at the zip code level. Markets with untapped potential that had been invisible in their media data strategy. They ran a geo targeted offsite campaign through Walmart DSP targeting competitive buyers. The outcome a 2.97% sales lift across targeted markets. That's 2.1 million households reached with more than 18 times higher impression delivery than those markets. 72% win back rate among returning buyers and 31% new buyer acquisition. Wow. That's not a test and learn result, that's a proof of concept. I want to flag something personally meaningful here. Flywheel's own Bernie Chase, Senior Director of Retail Acceleration, a friend of mine is quoted in the Walmart announcement. Her observation that item level performance visibility is what lets you identify where incremental ads investment will drive outsized return is exactly right. This is a kind of closed loop retail first media thinking that Flywheel has been building towards the broader signal. Walmart is not ceding the data layer to Amazon. They are building an open structure API driven ecosystem that treats their first party data as infrastructure for the entire supplier and agency community. That's a significant strategic move for anyone managing Walmart media budgets. The question shifts from how do we measure to what do we activate now that we can actually street pretty big, right?
- [11:24]
B
SRI Scintilla data powerhouse. You know we knew these days were coming. The most important thing my takeaways from here competing with Amazon getting closer and closer and closer and closer to being that. In addition to loyalty building, knowing the consumer, making data available for their vendors to be able to utilize and understand how to do better in an already scaled ecosystem. So you got to watch this one closely. All right, let's move from that to new media powerhouse in the house and it's none other than the Internet's Town Square Reddit Q1 2026 here's what they're saying. Let's close the week on a story that should be a required reading for every CPG brand manager and retail media strategist in our audience. Reddit just posted a quarter that demands your attention in your media budget. The Q126 revenue of 663 million, up 69% year over year, 8.5% ahead of the 600 million Wall street consensus. GAAP EPS came in at dollar and a cent against a consensus estimated around 58 cents. That's a 79% beat. Wowza adjusted EBITDA hit 266 million, representing a 40% margin, up nearly 1,100 basis points year over year. Operating cash flow expanded 145% to 312 million. Crucially, Q2 guidance of 715 to 725 million also came in above consensus. Of course, what happens when all that happens? Shares jump 9% in extended trading. Let's break down what's actually driving this Advertising is the engine. Ad revenue grew 74% year over year to 6. 25 million. Performance advertising kind designed to drive measurable actions like purchases. Signups now represent more than 60% of ad revenue. That is not a brand awareness story, that's a conversion story. And Reddit is increasingly competing on the same accountability metrics as Search and Programmatic and apparently winning. Okay, on the user side, Reddit now counts 126.8 million global active Dane users. Unique by the way, up 17% year over year. U.S. daily actives 53.5 million, up 7% international up 26% and average revenue per user globally $5.23, up 44%. U.S. aRPU reached $9.63, up 54%, well ahead of the 8.53 Wall street it projected. CEO Steve Huffman says the goal is to reach 100 million Danu US users, though he stopped short of putting a timeline on it. Another revenue line is really worth watching. Data licensing, primarily AI partnerships. Companies like Google and OpenAI bought in $39 million, up 15%. This is Reddit's monetizing something genuinely unique and you need to watch it. 25 billion posts and comments representing decades of authentic human conversation organized by interest and community. There is no platform that has that asset at that depth. Hoffman made a pointed observation in the call with the earnings Wall Street Reddit's capex for the quarter was $1 million. One of the five major hyperscalers are collectively spending 650 billion on the infrastructure in 2026. Reddit's position is that it benefits from the AI build out without having to fund a dollar of it. That's an extraordinary economic position to be in. But what does that mean for cpg? We care a lot about that few things. First, Reddit's performance advertising trajectory means it's no longer a test and learn line in your media plan. It's becoming a conversion channel with measurable accountability. CPG brands that are still trading as purely organic or community management territory and leaving money on the table. Second, Reddit communities are where consumers go for unfiltered product research, ingredient question, brand comparisons, reviews that no brand controls. And in the post AI world, Peter and I predict it'll still have its strength. Your brand already has a Reddit presence, whether you're managing it or not. The question is whether your resource will listen and whether you're responding. Third, as Reddit's data licensing business grows, its data and consumer intent and product discussion is increasing, flowing into AI training sets. We already know that today, which means Reddit is shaping what AI models know about brands and products. That, my friends, is a geo implication. And most CPG organizations forget about reckoning with haven't even thought about Reddit is not their favorite platform and That's a problem. Seventh consecutive quarter for the 60 plus percent revenue growth. some point the law of large numbers shows that curve. But right now the platform is executing in a level that puts in rare company among scale digital media properties. If you don't have a Reddit strategy in 26, you're already behind. Peter Red flag for the CPDIS we need to be on Reddit, don't we?
- [15:56]
A
Yeah, Sree. Their big splash at Cannes Lions last year seems to be really paying off. That's a wrap on this week's Commerce Riff. Reminder to check out our recent conversations with Chris Grillo of Tubi and Caitlin Windsor of PepsiCo. If anything we covered this week sparks a thought drop in the comments we read every one. And if you're not following us on LinkedIn, Instagram, TikTok, Facebook and YouTube yet, well, now's the time. We'll see you next week. 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 or the individual author, hosts, or guests, 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 CPGuys 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 CPT Guys, 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 or reference to or inability to use this podcast or the information we present in this podcast.