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- [00:02]
A
Hello, it's November 11th, 2025. Welcome to episode 10 of the Commerce Riff with the CPG guys. A weekly short segment burst digestible 10 minutes of content, both audio and video. We hope you enjoy our curated stories. I'm of course your co host PVSB and I am joined by Papa Raj himself, co founder and CRO of Think Blue Consulting. What's going on Sree? What's news?
- [00:24]
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Oh I'm doing great. Both kids are ready to there start their respective tours mid November to mid December. It's a busy time in the Raj fam and today Katsai has been nominated for two Grammys in their debut year. Insane Peter Today is a big day in the Raj Mahal. Please do follow my Instagram, TikTok and YouTube channels. Simply call CPG guys that easy. So let's get to it this week Peter. Our first topic yet again is Amazon all the way. Let's hear it man.
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First of all I'll say that the Grammys commendable. They're not quite the Omnis, but the Grammys are pretty big. Sri Straight from Amazon's announcement November 3rd, Amazon Web Services and OpenAI announced the multi year strategic partnership that provides AWS's world class infrastructure to run and scale OpenAI's core artificial intelligence or AI workloads starting immediately. Under this new agreement, OpenAI is accessing AWS computing comprising hundreds of thousands of state of the art Nvidia GPUs. The rapid advancement of AI technology has created unprecedented demand for computing power. As frontier model providers seek to push their models to new heights of intelligence, they are increasingly turning to AWS due to the performance, scale and security that they can achieve. OpenAI will immediately start utilizing AWS compute as part of this partnership. With all capacity targeted to be deployed before the end of 2026 and with the ability to expand further into 2027 and beyond. Representing a $38 billion commitment, OpenAI will rapidly expand compute capacity while benefiting from the price, performance, scale and security of aws. I mean great Scott. Talk about all the recent announcements from Amazon. The last week on the Riftry as we speak you and I are going are actually down at Amazon ADS annual event unboxed and we're also at the Dollar General HQ here in Nashville. So watch out for that programming on the CPG guys coming very shortly. We've got some good interviews happening. Sree over to you.
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Yes indeed Peter. Fun to be here at Amazon unboxed and then with Dollar General live in Nashville. So I'll move on to corporate restructuring and layoffs. As per Food Business News, it continues Normal Foods. We mentioned it barely last week. Now we have details Plans to eliminate approximately 250 corporate and sales positions as part of a sweeping corporate restructuring intended to align resources with the company's strategic priorities. As part of its efforts, Homal said it implemented a voluntary early retirement program for a portion of its non planned workforce. The company also said it's closing many open roles, reducing positions across its office based workforce. Hummel Foods remains focused on growth and growth requires continued investments. At John Gingell, president of Hormel Foods, we're directing resources towards technology, innovation, food safety and quality and the capabilities, including people, capabilities that will shape our future. We're confident that our ongoing investments will strengthen our brands, improve efficiency and ensure Hormel Food stays competitive and responsive to the needs of our consumers and customers. Let's look at the numbers. Hormel said it expects to incur between 20 million and 25 million in restructuring charges in the fourth quarter of fiscal 25 and first quarter fiscal 26. Most of these charges, as expected, will be related to one time pension benefits, cash severance payments, stock compensation expenses and employee benefit costs, Homal said. And an unexpected rise in the cost of pork, beef and nuts undermined the performance of Hummel Foods. During its most recent third quarter ended July 27th. The company experienced positive momentum in sales and organic volumes, but the cost of such key inputs hurt Allmel's bottom line. Net income in the quarter ended July 27 was 183.7 million, equal to $0.33 per share on the common stock, up narrowly from the 176.7 million or $0.32 per share in the comparable previous year's third quarter quarterly sales rolls up to 3 billion, up from 2.9 billion the year before. Man, I don't know man. We keep talking about commodity price increases, but there are consequences for all of those three year long price increases from late 2020 to 23rd, early 2023 and here those consequences are. I'm inclined to lean on my personal emotional opinion on this, Peter. We senior leaders didn't manage for the long term. We took price increases for the short term. EPSs and stock prices look amazing. We gotta hold hands together on this one. We screwed it up. I'm sorry to say it over to you Sri.
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I know that the people of Hawaii are paying particularly close attention to the story you just shared because they consume Spam at a greater per capita quantity than anywhere else in the United States. Spam being one of the prime products in the Hormel portfolio. Let's move from Minnesota over to Wisconsin. Kimberly Clark, a global personal care leader, and Kenview, a global consumer healthcare leader, today announced an agreement under which KCC will acquire all of the outstanding shares of Kenview common stock in a cash and stock transaction that values Kenview at an enterprise value of approximately 48.7 billion. Based on the closer price of Kimberly Clark stock on October 31, the total consideration represents an acquisition multiple of approximately 14.3x can view LTM adjusted EBITDA or 8.8x including expected run rate synergies of 2.1 billion net of reinvestment Quote we are excited to bring together two iconic companies to create a global health and wellness leader, unquote, said Mike Zhu, Kimberly Clark's Chairman and Chief Executive Officer. Kenview is uniquely positioned at the intersection of CPG and healthcare with exceptional talent and differentiated brand offering serving attractive consumer health categories. With a shared commitment to developing science and technology to provide extraordinary care, we will serve billions of consumers across every stage of life. Quote over the last several years, Kimberly Clark has undertaken a significant transformation to pivot our portfolio to higher growth, higher margin businesses while rewiring our organization to work smarter and faster. We've built the foundation and the transaction is a powerful next step in our journey. We look forward to working with the Kenview team to bring these companies together. We are confident that we will drive significant value for our combined shareholders. Continue to listen Sree While there are numerous espoused compelling strategic benefits for the merger, I think you and I can both agree. The reality is the addition of Ken View's portfolio more directly aligns Kimberly Clark's competitive position against Procter and Gamble, notably where KCC already competes in household paper and personal care products. This is a very clear repositioning to be a direct competitive primary threat to Procter and Gamble.
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Over to you Sree in household care after P and G, I think this might become the largest conglomerate that exists on planet Earth because Nestle is huge but it's not in household care. PepsiCo and Coca Cola are not. They're all food and Bev. But Peter, any conversation these days is incomplete without private label or private brand. So straight from packaging dive as food manufacturers look for opportunities to combat the rise of private label offerings, more CPG manufacturers are expected to sue retailers they claim on making copycat products. Earlier this month, James Mucus showed Trader Joe's alleging the grocery chain's version of crustless PB&J sandwich as an obvious copycat of its incrustables frozen sandwich. The lawsuit came five months after Mondelez sued Aldi, alleging the grocer snack offerings replicate the packaging of Oreos, Chips Ahoy and five other brands. What the national brands are doing is just throwing away a gauntlet and saying, look, you guys just can't get away with this and imitate our products, said Neil Saunders, managing director with Global Data. They probably will be more skirmishes because the market is becoming more competitive. Once viewed as inferior knockoffs to branded offerings, private label products have evolved into formidable competitors that are now available at small mom and pop stores as well as retail giants such as Walmart and Costco. Today, shoppers find them in nearly every aisle in the store, from canned vegetables and ice cream to meat and yogurt. Private Label is forecast to command more than a fifth of food in grocery sales in 2025, according to information from Global Data, up from 12% two decades ago. So that's a massive jump. Peter Sir Kana noted that in 2024 loan sales surged to a record $27.1 billion, rising 3.9% from the prior compared to 1% rise among national brands. The sector's growth is a result of retailers spending more to increase the quality, taste and value of the products and hence I call them private brands. Recently, inflation has prompted consumers to pull back in spending, making private level products a much more attractive cost saving option for the household pantry. What the Smucker and Mondelez lawsuits are in common is that they sued retailers that primarily stock private label products. Food manufacturers are far more reliant on bigger retailers such as the Walmart, Rover, the Albertsons and rest of them for their sales. There is less of an incentive to sue them due to fear of damaging the long term relationship with merchants and the possibility that the retailer will products from shelves in retaliation. I'd like your quick opinion on this Peter. Mine is brands have to learn to live with private label. Gone are the days when you're just going to be able to kill it. Thoughts real quick here before I wrap it up.
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Yeah Sree, There is a synergy and a harmony that has to exist because at the end of the day it's the retailers that control the distribution. Now until that changes, you're going to see these skirmishes on the margins with retailers like Aldi and Trader Joe's where brands don't have as significant a position, just as you noted.
- [10:24]
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Thank you Peter. All right folks, that's our take on relevant commerce happenings from so many announcements this past week that Peter and I thought were meaningful and could be not be passed on for a rift. We hope you enjoyed it. Please do click like our post on all platforms. Follow us on LinkedIn, Instagram, TikTok and now YouTube signing off from Nashville, Tennessee. See you next week.
- [10:44]
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