Omar Haq (5:36)

No, thank you SRI and thank you for the great introduction. Yes, I didn't realize it was been four years, but definitely too long. I know we've obviously met and talked multiple times, but not in cpg guys. But I promise you the next time around it will be less than four years.

Andrew Lipsman (5:51)

Six months.

Sri Raj (5:51)

Omar, I won't ask you to, but you know I'll be tracking you down. Less than six months.

Omar Haq (5:56)

Absolutely.

Sri Raj (5:56)

And Omar, before we get started with our Q and A segment here, you know I mentioned Accelerator, I mentioned Bimbo Bakeries usa. Tell us the difference and how your role has evolved in the last couple years.

Omar Haq (6:07)

Sure. No, absolutely. Great question. So you know, when I first joined bbu, Bimbo Bakeries usa. By the way, Bimbo Bakeries is a wholly owned subsidiary of Grupo Bimbo in Mexico, the largest baking goods company in the world. And we also the top 10 largest food companies in the world. We around $23 billion in net sales and 35 countries which are growing. When I joined seven and a half years ago, we were in 17 countries. So again, we've doubled our, you know, our penetration. Country penetration I should say. Yeah. And when we first, when I joined seven and a half years ago, we had recently formed the business group Accelerator which was all things disruption. And I was leading channel disruption. In the last two years we realized, hey listen, E Commerce has become big, big enough. And all the different functions of accelerata, including supply chain disruption, actual new product innovation had grown big enough. So we, we put it back in the core. And when we did that two years ago, shree, we also combined the shopper function and the E commerce function. Because we said, hey listen, the shopper is a shopper. The shopper shops online, shops in store. And as you know, many of us, many of us are shopper, all of us are shoppers and we do the same thing. So let's focus on the shopper and create a business function called omnichannel. So this is what happened and we primarily my group is focused on that and we've evolved. We focus on the shopper. We are, we basically, I would say stand sit between sales and marketing. So and solely dedicated to focusing on the shopper and making frictionless experiences for the shopper conversion, converting the shopper. So it's all, all about the shoppers here.

Sri Raj (7:50)

Omar, I want to first congratulate you on all the success. I want to congratulate you the company appears on all the success. You said double footprint in terms of the number of countries you're at. That is no easy feat especially given majority of that work was during supply chain challenges and inflationary period. Well done to all of you. So if you're game, let's jump right into it. And obviously the tip of the spear question that it's not just me asking you this on the CPG guys. Our audience wants to hear from you. 2024, let's put E commerce in context. Let's not look at the whole big I don't want to go into the hey, we've got a volume challenge.

Andrew Lipsman (8:24)

Really.

Sri Raj (8:24)

Ecom omnichannel. How did 2024 go? And then where is E commerce at the end of the year and what has taken your time in 2024?

Omar Haq (8:33)

Sure. Yeah. So you know, for E Commerce and Omni it was a great year, right. We, we made our numbers. We had a plan which was aggressive. We were able to you know, as things stand right now, the year is not over yet. It will be but we are on or above plan. You know our obviously it's not Covid level growth. You know Covid. We saw phenomenal like most CPGs especially food CPGs saw phenomenal online growth. But it's still we, we are still above our plan. I would say the, the fastest growing modality has been click and collect for us. We are a category. All our categories are in the full basket model. So and that, that's been, that's been where the growth is coming from. From as far as, you know, 2024. We, we tried to hone in on like I said, focus on the shopper. A lot of new learnings for us. There were certain some growing pains. How do we structure the team? How do we look at it internally? How do we work with the different functions within bimbo bakeries? So those were some of the growing pins but overall we've, we've done well. I'm happy, I'm happy with the team and you know it's. And we're ready for exciting and challenging 2025.

Sri Raj (9:46)

Somar, first of all, again I'll say congratulations. Not a lot in CPG land today can walk around and say we've hit our plan. Right. No easy fee to get. But I still want to go back to where your time has gone in 2024. You mentioned click and collect is still on a tear. Right? Is that where you spend a majority of your time in 2024 and that's where you'll be going forward? And is it blocking and tackling? Is it more strategic? Is it basket building behaviors? Like where does your time go?

Omar Haq (10:12)

Yeah, so it's, you know, one. As we started the group recently, one of the things was we had a lot of priorities. A lot of things were going on within, within the company. We said, okay, listen, if we try to boil the ocean, nothing is going to get done. So we, we said, okay, let's prioritize where we want to work with. Not everyone has the right to win. Not all our internal brands have the right to win as well. So we have a pretty tiered structure. We had outside consultants help us as well. So we said, okay, let's focus on these brands which are growing brands. And then somewhere we need to have the lights on and then somewhere let's listen, they are good brands but it's, let's not, it's not the primary focus. So first we had, you know, we, we had that and then we said, okay, let's look at our customers, our retailers, how do we grow with them, how do we partner with them? And that was a lot of, you know, shiny toys were being thrown. Hey, listen, everyone has a retail media network now. So we were trying to focus on what makes sense. So primarily it was strategic, some blocking and tackling, but overall it was more strategic in how we can grow.

Sri Raj (11:12)

You mentioned retail media. It seems that no conversation with the retail or CPG leader today can pass by without a conversation on retail media. Give us your opinion, Omar. What are you learning through the numbers? Is it growing? Is it shrinking? Is it kind of peaked out, growing at a flat pace? You've had to obviously handle this on a daily basis. Right. But now it's a phenomenon. So how are you dealing with it?

Omar Haq (11:36)

Yeah. So you know, overall it is growing, but where and how it's growing is different.

Andrew Lipsman (11:40)

Right.

Omar Haq (11:40)

First of all, you know, every retailer, and I mean this in the most respectful way, every retailer and the neighbor has a retail media network. Rmn.

Andrew Lipsman (11:53)

Right.

Omar Haq (11:53)

But you know, retailers also need to understand that we, we don't have limitless budgets.

Andrew Lipsman (11:59)

Right.

Omar Haq (11:59)

So we have to look at each of the retail media networks strategically where we see the most growth, where we need to be fair as well.

Andrew Lipsman (12:07)

Right.

Omar Haq (12:08)

So we are looking at from that lens. And not all RMNs, retail media networks have the right to win. So we need to really prioritize that. Then apart from that, we have to look at our total investment level per customer. We spending on trade, we spend, we are spending on traditional media and now retail media. So we have to look at our total investment and see what makes sense. And, and you know, some of our retail partners understand that. Most of them understand that, but some don't. So we have to remind them, listen, we're investing this much. We are a DSD business primarily, we are a DSD business. So that's a more investment, right? We are the ones merchandising the shelves, we are the ones taking the sales and we're the ones supplying them. So we have to look at our total investment and see what makes sense with budgets, which, which we, we do answer to a higher authority on, you know, how much budget we have. So we need to be careful on that as well. But overall, I would say sri that, you know, retail media is the most growing, you know, as far as any investment. But we just need to be careful in how we spend and if spending the right way.

Sri Raj (13:11)

A couple of things around that, Omar, I mean the consumer and your investors expect you to be judicious about it. So well done on that one. The one that kind of comes to my mind, I worry about is you mentioned, you know, every other day there's a new one sprout. Literally may not be every other day, but it's often enough there's a new one sprouting up, which means we're having a proliferation of inventory. How do you deal with this inventory challenge? Because all of a sudden you're going to have a ton of off site, you're going to have a ton of on site and you're going to have everything in between. How do you guys even plan for this as shopper? You mentioned shopper marketing, right? Are you worried about inventory? And you know, once a commitment is made, do RMNs actually have the inventory to fulfill their obligation?

Omar Haq (13:52)

Yeah, great question. So, you know, we, the way we look at is from, from internally. We start internally on what are the brand priorities and which brands have the right to win. But then we say, okay, let's look at our overall, create this tentpole calendar for the year and around those tent poles, first of all, we can't have too many 10 poles. We need to be very judicious in what the ten folds are. And then we say, okay, listen, what are the activations around those 10 poles. And then you know, where there are synergies between brands, even synergies between our complimentary CPGs.

Andrew Lipsman (14:22)

Right.

Omar Haq (14:22)

Where we can work together. So during that, you know, we form the 10 pull calendar. Then we look at, okay, let's see, where do we need to, what kind of activations we need to do either online or in store and within, within each of these different modalities, online, in store, the different tactics we can use. So that's what we're doing.

Andrew Lipsman (14:40)

Right.

Omar Haq (14:41)

You know, obviously search comes to mind. Search is a, search is a big one. Yes, we are investing in search, but that's not the only thing we're investing in because we need to look, take a step back and look at the full funnel and see what makes sense.

Sri Raj (14:53)

Let's talk about that a little bit more, if you don't mind. Right. Within retail media, you mentioned search, is that primary like in the industry, is that pretty much it? And then there's a 10% overhang everywhere else. Or is that truly diversity of inventory you have the ability to take advantage of?

Omar Haq (15:08)

Search is a big part of it, no doubt. And search gives us some of the best ivo as over oas based on conversion. No doubt about that. But it's not the only thing.

Andrew Lipsman (15:19)

Right?

Omar Haq (15:19)

Yeah, we do a substantial, we do spend a substantial amount on search, but the way we've tiered our different customers is, you know, search is like basic hygiene. You need to do that.

Andrew Lipsman (15:29)

Right.

Omar Haq (15:29)

People need to find your product. If they don't find your product, they are, you know, as the saying goes, the best place to hide a dead body is in the second page of search results. So we have to be there. But then that's not the only thing because we are looking at it holistically from an omni perspective. So we need to see, okay, what is the goal of the brand? Is it about loyalty? Is about trying to stop the leaky bucket, you know, based on all of those different things we're trying to do, how we're focusing on the shopper, we decide on where it makes sense. Sometimes we have to ignore the, we have to say, okay, if, if the roas is not as much, that's fine. Right, that's fine. If we try to build share, if you're trying to take share, that's fine. We have to depriorize some of the roas. So again, it's a case by case basis based on the brand priority and how we want to grow and by our retailers, the RMNs of those retailers, what they have to offer and so.

Sri Raj (16:23)

As a team that you also have shopper marketing under you, are y'all optimizing your inventory, optimizing your spend on retail media by all these little pieces of inventory? And then how are you connecting it back to the mothership of advertising when it comes to optimization? Are you all in the mix yet?

Omar Haq (16:41)

Yes. Great. So we use like any, you know, mature CPG industry, we use mmm. MMM marketing, mix modeling, we use that. But that's not the only lens we use and I'll tell you why.

Andrew Lipsman (16:57)

Right.

Omar Haq (16:58)

You know, I have a sort of a hate love relationship with MMM. MMM is great. But when MMMs were created, this was pre retail media. And so they do, unfortunately, I think they do penalize some of the retail media newer tactics, including search, but they're great for some of the traditional media tactics.

Andrew Lipsman (17:16)

Right, right.

Omar Haq (17:17)

So we look at mmm, that's definitely our North Star, North Star guiding principle. But then we look at, okay, what kind of information we're getting from the retailers. And then we do our own analysis internally. We have a, I have an analytics team under me. We take a look at that, we look at, okay, where we need to give certain haircuts what makes sense. So we, we look at it, all of these three things. MMM retailer provided data and our own analysis. And based on that, we prioritize on certain things. And again, it's by customer, by rebu. And I say customer by retailer, where it makes sense. And some, some of, Some, frankly, some RMNs are just about search, right? So yeah, we'll invest in search, but some provide more data to us. You know, listen, you lean in to us, you provide the data and we'll be able to execute better. So there it's all a different things and different varieties we use in order to prioritize where we need to invest.

Sri Raj (18:10)

Are you finding that retail overall, I'm not asking for names here, but are you finding that retail overall is collaborative when it comes to the data sets? And then what metrics are you personally prioritizing while asking questions of the spend was accurate or worthwhile for you?

Omar Haq (18:25)

Everyone is different. I mean, we pay for a lot of data also, as you know, you know, nothing is free in this space. So we do get, we partner with pay a lot of data, both from a retailer's perspective and also external data. For me, you know, as, as someone who owns the shopper, we, we need to figure out, you know, what are the different shopper cohorts, what are they looking for, how do we increase their basket size, how do we create a Frictionless experience for them. Be it, you know, if the shopper, if she's looking for tonight's dinner, you know, how is she going to get that? What are the different things? How do we convert her? Right. So it's. It's a lot of basket building data, basket building analysis. Honestly, I think we could do better. I always challenge my team. Hey, listen, let's figure out how do we do better. We're getting a ton of data. Are we using it to the best of our skill set and abilities? So a lot of different things going on. Some of the things we are really good at, and some things we do have a lot of room for improvement.

Sri Raj (19:26)

And so more in that spirit of, you know, there are opportunities for improvement, opportunities to get better at, you know, looking at metrics, optimizing, where you're putting the dollars on retail media, building plans for Grupo Bimbo. Right. The big question I'd ask you is, how are you looking at Omni Channel holistically? How do you tie back into the holistic omnichannel ecosystem? Because today the consumer, whether we want to accept it or not, is 100% digitally influenced. I don't want to say stupid things like it's 80% and 92%. It's 100%. You know, we are at this point attached to our smart devices. That's how humans lead their lives at this point in that sort of a world. Have you started thinking about building retail JBP plans exclusively for E commerce?

Omar Haq (20:13)

Yes. So no. Excellent question. So some of our actually more mature retailers are coming to us. They're like, okay, let's build a JBB plan. Have, you know, online is 15%, 20% or more part of our business. And we want you to be, if you're not there already. And, and you know, and for most of our customers, we are. Our goal is to be our grow faster than what our category is growing.

Andrew Lipsman (20:36)

Right.

Omar Haq (20:37)

Because that's the way you take share. If you grow faster than the category. And. And, you know, and we are doing this where we see. And also we have, I would say, four different categories.

Andrew Lipsman (20:49)

Right.

Omar Haq (20:49)

One is, you know, breakfast includes Thomas's English Muffins and Bagels. The. The iconic brand there. Then we have sweet baked goods, including Entamins Marella. Then we have buns, bread buns and rolls, including Ballpark Arnold Sara Lee bread and so on. And then we also have salty snacks, which is a sister company called Barcell. But we the maker of Takis. If you have teenagers, the. I have to. I have teenagers. And they love that. Everyone knows that. So we look at each of these differently and the way we look at it holistically is, hey, listen, let's build plans around that. Let's make sure that we are growing at the rate that we want to grow and above what the retailers are asking. And based on that, we create, you know, JBB plans. We look at the brand priorities and create activation calendar around that. So yes, so we are looking, our retailers are asking and that's where we are really leaning in.

Sri Raj (21:45)

That is fabulous to hear that y'all have already kind of moved to the world of building E commerce exclusive planning cycles and JBP plans. Right. My curiosity question I would love to learn is how does that plug into the overall picture of the plans? Because earlier you mentioned, you know, it's important to look at the full investment at the retailer, like total, let's say in the world you and I come from, which is branch total customer investment with retailers being the customer. So how do you plug into the overall GBP if you're doing a separate E comm jbp which is long overdue in the industry given that it's, you know, 15, 20% of the business, it's important with a very different skill base. But how do you plug into the big, big jbp?

Omar Haq (22:26)

You know, so while we plan on a micro level, but it is part of a bigger plan, right? So we don't want to plan in isolation. So it is big part of a bigger plan because our investment levels are going to the whatever our top line investment levels by customer. So it's very much integrated with each of the bigger plans because our goals are, you know, we, our goals are overall customer level goals.

Andrew Lipsman (22:49)

Right.

Omar Haq (22:50)

And my team, we have a shadow P and L which is basically overall the customer level P and L. So it is integrated. The discussions and the tactics might be separate, but it does roll up into automatically based on how the retailers are, their teams are structured as well.

Sri Raj (23:08)

Would you mind expl for so that our audience can understand Omar, how does a shadow P and L work and is it primarily to create accountability for you and your teams and your groups?

Omar Haq (23:19)

That's a great question. And you know, if any CPG brand is coming into the mix right now, I would say, you know, having a commercial angle, which means having a P and L, be it a shadow P and L is a must, right? Otherwise you'll always be considered a cost center and again, trying to justify your existence. So again, I want my team accountable. We have a top line number where I have each of my account account leads accountable on what they are to what they have to deliver. And the shadow PNL works and why it works is why it's important is for example, if we have, for example, XYZ customer, let's take Walmart or Kroger, right? We have our national account customers there. And if I'm investing, if I have a total separate P and L, then they'll be like, hey, why are you taking our P and L away? Because this is the fastest growing, you know, modality, you know, X percentage is growing. Why do I have to give that? So I'm like, no, no, you take credit for that as well. But I'll take credit for that as well because I am investing the retail media, you know, strategy investment is coming from me. I'll take credit. That's why I'll have the shadow Pinot. But you take credit as well. And I think that removes any unnecessary friction or politics within companies. Bimbo bakeries, we've done a great job of that from day one. We have that understanding and day one we've had my team, while some of my account leads, like Kroger account lead and Walmart account leads, you know, Albertsons and all the customers, they report directly into me. But they do sit with their local team. They do sit with, in Bentonville, they sit in Cincinnati. So they do sit with them, right? So, and they're very much part of their team. But, but still they have a solid line, direct line towards me. So we can have the same strategy, same plan and they're executing as looking at holistically for each of the accounts.

Sri Raj (25:03)

And so, Omar. So hearing that, I'm tempted to ask, how often are you out therefore at retail? Is it often once a quarter? Are you focused primarily as a leader on the largest businesses, given that it's a fifth of business at this point? So how often are you out at retail?

Omar Haq (25:19)

So you know how often I physically am there. So you know, if I have very, you know, I rely on my team, right? I have very strong account executives, which I'm happy and blessed to have. So they're the ones sitting there every day, right? They're working with the teams. I go to, you know, executive level meetings. You know, my, my team is, we, my team does punch above the weight class. It's not a huge team. As you know, we work with every customer in the US So we help in different ways. Sometimes we have playbooks, we give, you know, playbooks to the teams or they're. This is, this is the way you structure it, this is what you need to do. And, and then when in any executive level, top to top, I would be there. So the big guys, I would say quarterly or even biannually, I would be there. But then I'm also all in the big meetings for FMI coming, FMI Midwinter coming up in January next year where I know you and I have met many times when you used to represent, you know, your former employer. So, you know, I'll be there in those meetings. I'm there in many calls where we are trying to educate some of the RMS as well. So again, as my team sits in between, have one foot in sales and one foot in marketing, it's, we need to connect with the R Men's as well as the retailer, the merchants also.

Andrew Lipsman (26:36)

Right.

Omar Haq (26:36)

So it's, it's a, it's a, I think it's a privileged position to be where I sit so we can get everything together. We have a, we have, you know, we are looking at both sides of the equation, so to speak. And so I'm there when, when it needed. But I have a team which is there. Always good to hear, Omar.

Sri Raj (26:51)

So let me remind the public that I'm speaking to Omar Haqq, VP and GM of Omnichannel and Bimbo Bakeries. So one of the questions I've always wanted to ask, you know, in the physical retail world, it's often easier to accomplish objectives because you can stand in front of a retail shelf. There's something called a planogram, which is very structured, limited shelf space, kind of easy to, much easier to work with. How do you, how do you address those aspects for an online world where you can't stand in front of a physical chef? You already mentioned a very interesting terminology earlier. That second page of search is where the dev bodies lie. So you obviously never want to be on that second page of search unless that's the death of the brand. Right. So how do you live in this crazy world of digital? What do you emphasize in a world where you can't have physicality as you.

Omar Haq (27:41)

Know, once we morphed into the Omnichannel team. So the physical shelf is important for us as important, if not more important than the online shelf.

Andrew Lipsman (27:48)

Right.

Omar Haq (27:48)

But we know that shoppers, you know, look, search for stuff online before even going to the store and they look, you know, what's in there, sometimes add stuff from the cart and they'll pick up in store and maybe go inside the store to look also part of the, part of the shopper. Marketing function. The strategy of the secondary displays is something that my team creates a strategy and then our frontline executes that.

Andrew Lipsman (28:10)

Right.

Omar Haq (28:11)

Our sales operations executes that. So that's important for us as well. So we, you know, in the early days we used to look at many shelf website scraping tools to see what our share of shelf is. We still do that. We have, we have vendors, we are looking into who helping us platforms in search. We have that. For example, we use nimble ads for our AI search platform. But then again we the physical shelf we also try to see. Okay, the experience for the shopper should not only be frictionless but. But they should be able to see similar stuff when they go in store.

Andrew Lipsman (28:45)

Right.

Omar Haq (28:46)

And different challenges in both. For example, if you go to the breakfast aisle where our English muffins and bagels are, it's orange or Thomas's color, it's orange, right. But online, you know, getting the same orange, the space, the shelf facing is not as easy. So we need to make sure we investing at the right level. So our bagels and English muffins are coming on top when someone is searching for them.

Andrew Lipsman (29:10)

Right.

Omar Haq (29:10)

So again it's both are important. I would say majority of our business still gets done in store as, as. As you know, as with every other cpg. So but we are looking at both of them and trying to create that experience from a shopper perspective.

Sri Raj (29:25)

Somar that very experience to speak to from a shopper perspective. Any recommended tactics to drive, click and collect and basket behavior?

Omar Haq (29:33)

Yeah, I mean first of all I would say you need to look of what are you trying to solve for if the shopper, if she is looking for the dinner for the night or snacks for kids. Do you have the right portfolio? Do you have the right partnerships, you know, with other CPGs. For example, are many of our, you know, bagels and bread buns go with something else.

Andrew Lipsman (29:56)

Right.

Omar Haq (29:56)

You need a spread, you need a protein. So again, you know, partnering with them with eggs, we have a lot of partnerships like that. We had a partner with Kraft Heinz with the Cream Cheese Fleet, Cream Cheese with Bob Evans. We had partnership with their, with their egg products again. So we, we need to look at all of that thing and what she's looking for to drive conversion to drive basket building.

Andrew Lipsman (30:20)

Right.

Omar Haq (30:20)

We, we know, we have the data. We know that when someone adds some of one of our products in their basket, the basket side increases.

Andrew Lipsman (30:27)

Right.

Omar Haq (30:27)

Because they need other stuff to. In order for them to eat our products. So you know, we, we know that. So that's how we work with them, we work with our analytics team to figure out, you know, how do we increase the basket side and what do we need to do, what kind of data we need. And you know, in store we need to have our secondary displays in the right. The end caps in the right places.

Andrew Lipsman (30:50)

Right.

Omar Haq (30:50)

Maybe sometimes it has to be next to the refrigerated section because where the cream cheese and butter is.

Andrew Lipsman (30:55)

Right.

Omar Haq (30:56)

Sometimes we need it in the cookie aisle.

Andrew Lipsman (30:58)

Right.

Omar Haq (30:58)

Because we are, we are, you know, we do have, you know, entamins cookies also. We just launched, you know, three Entamins SKUs, three different flavors in the cookie aisle. So again, these are important things that we look and figure out what is where the shopper, how the shopper is shopping. And it's not only the perimeter of the store, it's also the, the aisles of where we need to.

Sri Raj (31:18)

Awesome. Omar, thank you for that little bit of a class over here. I'm going to go to a subject which is a, for a DST company, probably a little picky one, which is Pure Play, especially in the fresh foods category.

Omar Haq (31:33)

Right.

Sri Raj (31:33)

I've never made a connection between Pure Play Fresh foods and DST fast moving ecosystems. Right. Has grocery, what's your observation made a dent yet with Pure Plays or are we still in the world of let's try to figure it out, experimentation, test and learn.

Omar Haq (31:49)

So good question. You know what Vitar is pure play, purely pure play, no pun intended. Right now.

Andrew Lipsman (31:59)

Right.

Omar Haq (31:59)

Even if you look at Amazon where everyone thinks of Amazon, you know, in the Amazon full basket model, we have Amazon Fresh. Yes. Which is online, but we have Amazon Fresh stores which are growing. We have Whole Foods now which is also integrated with Amazon Fresh. So is there any real Pure play even in Instacart?

Andrew Lipsman (32:18)

Right?

Omar Haq (32:18)

Instacart is, I would say yes. It may be the front facing, it's pure play. But at the end they are an aggregator. They are picking it up from Last Mile Solver. They are picking up from any of the, the, the physical stores.

Andrew Lipsman (32:32)

Right.

Omar Haq (32:32)

Again, is that a pure play? So, so I think it's. There's a lot of dilution. What really is a pure play, if there is anything. A pure. Purely a pure play. Yes. Maybe in the snacking world there might be some like GoPuff Dashmark and you know, but the quick commerce segment is growing fast. But they also pick up most of their products from the physical shelf and then they have a, you know, small mini micro warehouses. So I think, you know, the lines are blurring between if there is anything a Pure play and between a pure play and a. And a click and collect. But I think in a full basket model for us, it's primarily where the growth is coming from is from the click and collect model.

Andrew Lipsman (33:15)

Right?

Omar Haq (33:15)

And regardless it, when I say click and collect, I mean, you know, pick up, it could, it could be pick up in store, could be from the parking lot or from. They delivered to your home as well. So I would say as for a full basket model, the click and collect one model is the one where we see the majority of our growth.

Sri Raj (33:32)

And then Omar, this is more of perspective than numbers. On the click and collect model, is there a difference in the role between traditional retailers and intermediaries? Or they, at this point, they're all intermingled.

Omar Haq (33:44)

There is also blurring of lines there. And you know the way. And when you say intermediaries, you mean like instacart. Instaguard. Yeah, and you know the way.

Sri Raj (33:55)

Uber.

Omar Haq (33:56)

Exactly. The way their partnerships have evolved as well is, is you know, they do. Based on different investment levels. We do ask for some retailer level data and to see, you know, what makes sense for us. They are, they do provide a convenience and I would say they provide a really good convenience because they're one of the fastest ones to deliver the products. So, so that is the convenience to the shopper. And if the shopper is looking for that meal and within in the next hour or so, that's their modality.

Sri Raj (34:25)

I gotta imagine, Omar, in the world you're in, that convenience and need for speed does exist.

Omar Haq (34:30)

It does exist, absolutely.

Sri Raj (34:32)

Meal fulfillment.

Omar Haq (34:33)

Exactly. It does exist. And sometimes, especially in today's households where both the partners are working and they need to prepare a meal and they don't have time to think, you know, three days in advance or even a day in advance sometimes. Coming. Driving back from work. Yes, people are going back to work. Driving back from work. I need something at my doorstep. So convenience matters. And that's why I think the, the last milers or the aggregators or intermediaries, whatever you want to call them, do have a place in this ecosystem.

Sri Raj (35:00)

No surprise. No surprise there at all. So let's talk about, we'll get to AI later. So I'll ask you to hold off on AI for a second because no conversation can be complete without that buzzword or some come here and dispel the myth that I say that it's a buzzword, but we'll get to that in a second. But let's talk about product innovation and tech innovation as two separate paradigms. Have you all been focused on product innovation exclusively for the omnichannel space that you can only get via omnichannel and then what new tech capabilities, anything in the search world, content, etc. You're looking at. And I'll ask you about AI separately.

Omar Haq (35:39)

Yeah. So as far as, you know, purely product innovation, you know, the food, the taste of consumers is changing fast, right? As a big company, you know, it's a challenge, right, because we, we create products in the millions of products. We do not, you know, we don't have products where we can launch like within two days.

Andrew Lipsman (35:57)

Right?

Omar Haq (35:58)

So but, you know, but every big company, including us, we have to be nimble. We're forced to be nimble by the shopper, right? So we are doing a lot of product innovation. We're looking at trends, future trends, looking at the data that we have, looking at shoppers, what they are buying. Something we do really well at being in 35 countries now. We do a lot of lift and shift. You know, we see something is working in some of the countries. Some of our best products have come that way. Sarali artisano bread, I believe that was something which came from either Colombia or Argentina. I think it was Colombia. And we said, okay, this is a great product, thick slice, let's bring it here in the US and it's, you know, it has done phenomenally well for us in a very short span of time. I mean, that's our own, you know, organic innovation. We spend, you know, disproportionately being the biggest baking goods company. We own this space really. We do spend on innovation. And, you know, we are looking at a lot of different ways the eating habits have changed. Healthy for you is big, better for you is big. So we have, you know, a team focused on that. Our retailers are asking that our consumers are looking for that. So, yeah, so, you know, we are doing, you know, all of that and spending a lot of time and investment in that. As far as technology, you know, with news coming, when technology is coming, what I would say is, you know, one of my, part of my title is Ecom Online. I get a call a lot of vendors, but all they talk about is direct to consumer. And as you know, direct to consumer is a very small, tiny portion of Morpher test for us that we did, you know, a few years back. But, but if you are able to sift through all of these, you know, shiny toys and all these direct to consumer innovations, at the end of the day, I think where I'm most interested in is loyalty Where I retain the shopper, I don't, I make sure our shoppers, we don't lose the shopper and reward our loyal shoppers. And then data, data is big also.

Andrew Lipsman (37:49)

Right.

Omar Haq (37:50)

So now we are getting in, in the omnichannel world we are getting a ton of data but you know we need to have the capability and the right tools to sift through them in a timely manner. So what we can make sure that we are able to use that data to help the shopper to drive conversion. And that is a big thing.

Andrew Lipsman (38:11)

Right.

Omar Haq (38:11)

So again I would say loyalty and data are the two biggest tech areas I'm looking at.

Sri Raj (38:17)

So loyalty and data. You briefly mentioned a test with DDC over there. I am a forever optimistic person on D2C. D2C does exist. It's very large scale. Especially if you visit us in Southern California to come to Expo west. You have a big awakening. One has a big awakening or the role of D2C in the industry to incubate products. Did y'all ever actually play that out? Is it still a test? Can I still buy products on Duc or was that purely a test for the purpose of learning how it's executed?

Omar Haq (38:47)

So both I would say so. We did start a company called sweetsnacking.com where we used to sell larger bundles of our products for snacking. We also have looked into B2B where that makes sense where we can increase our distribution. But sweet stacking, you know, you know it was a good, good test for us. We do have certain legal areas of protection that because we use a independent operators to service. So we do need to be careful of that. So it's. We decided to sunset that. But for some of our brands in the salty snacks place in Popcorn Popcornopolis we you can buy. It's a direct to consumer. It's a very good gifting item. You know it's year round but also a lot, a lot of holiday shopping gets there. So I think that's something that we have. You can check out popcornopolis.com and we always do discuss. Right. I'm at the end. You know I have been in E commerce for a long time so direct to consumer excites me.

Andrew Lipsman (39:45)

Right.

Omar Haq (39:46)

Because I'm getting real data. I know who my consumer is. I can try different things. I don't have to go through someone else and you know, first party data is worth it's weight and gold. So I still have dreams. Okay, when it'll be big, what can we try at some point maybe for innovation and so on A partnership with other CPGs. You know, I'm ready to partner, you know, just to try. At the end, this will also help our retailers, honestly.

Andrew Lipsman (40:10)

Right.

Omar Haq (40:10)

Because we, we learn from there and we can apply that our retailers as well. But right now it's, it's something which is not primarily a main focus for me right now.

Sri Raj (40:20)

For me, Omar, the primary reason D2C has always remained in my mindset is the data, as you've already pointed out, can feed a pipeline of innovation for the company, period. Right. Not just for Omnichannel. Right. So I'll go to the last question for today, which is no conversation with a senior leader in the industry is complete without talking about artificial intelligence. So I'd love to know, what trends are you following these days? Has AI made that list? And can you dispel for audience? Is AI a buzzword in our industry or is it real?

Omar Haq (40:53)

Yeah. So, you know, even before we started calling AI AI, we've been using machine learning. We've been using that for the perfect order. Being a DSD shop, we own our own orders, you know, how much to supply, how much to produce. We don't have inventory. It's a fresh product. But I think what you're referring to in the industry is, referring to is gen AI, generative AI.

Andrew Lipsman (41:13)

Right.

Omar Haq (41:13)

The large language models, LLMs. So in that, you know, I don't think it's a buzzword. I think it is the right tool to make sure that we can find efficiencies in the system.

Andrew Lipsman (41:27)

Right.

Omar Haq (41:27)

Efficiencies in how we execute. Where I see the most opportunities is, and, and we are still in very early test and learn stages is content. You know, content can be the way we do content. The way we can have different multivariate testing, different content and different retailer sites, what we can show. So I think, I would say, I think it has a definite future in content. Second, I would say is Shopper Analytics. Right. Again, we are getting a lot of data and I was looking at a, at a video from Satya Nadella from Microsoft, CEO of Microsoft, how, you know, he's telling, putting some prompts on Excel. And you know, in business school, back in business school, Excel was king, right? We lived and died by Excel building different models. And he was able to build a pretty complicated and complex model just by a few prompts in Excel, right? So I was like, okay, this is something that could have definitely a feature where, where, you know, we don't need an army of people to do that. I don't need a 30 person analytics team. I can do it. A very small, nimble team. And thirdly, I would say is how do we join different disparate data models together to find, get the right insights and I think it's great insights from them.

Andrew Lipsman (42:43)

Right.

Omar Haq (42:44)

Most people, although now this is the, the utopian stage, this is the future. Most people I know are creating emails using, using Gen AI over the base of the or writing something where you need to write something on LinkedIn or something. They're using that. So. But I think as we mature, as we as LLM models become more mature in our prompts, I mean it's, it's garbage and garbage out. The better prompts you given, the better access to data it has and it can generate more. I think you will see it evolve and I think it will make us smarter. Honestly, I'm a, I'm a big believer in that. Although it is a buzzword like people are using. But I think we have just scratched the surface and I think I'm very, I'm optimistic about the future and how my team can employ that or deploy that.

Sri Raj (43:31)

Good to hear Omar. Content was certainly one of the areas that I was we're starting to look at on the CPG guys in terms of AI, but we kind of knew that when we asked you to come back on the show, we'd get a masterclass on the state of ecommerce overall in 2024 and that's what we got. Let me remind our audience, you can find all of our content simply by going to a web browser and typing cpguys.com as the URL. And if you think you or your company has thought leadership to contribute to a community discussion, please do drop us an email@contactpguys.com maybe you can join us on the podcast like Omar did. Don't forget to drop us the reading@cpguys.com on the navigation bar up top. It tells us how we're doing. Are we having the right conversations with the right people? To our LinkedIn followers, we can't say thank you enough times. Thank you for the clicks, likes DMs following us, listening to our podcast, downloading a podcast, showing up at events, being in the industry with us, meeting us at conferences, and actually recording with us while on the road as well. Omar, I can't thank you enough for doing this right during the holidays and you're always welcome back on the show.

Omar Haq (44:33)

Thank you so much sri. Thank you so much for CPG guys and your whole audience and happy holidays to everyone.

Sri Raj (44:38)

Happy holidays to everybody. And to you too, Omar and that's the wrap of this episode of the CPG Guys.

Peter V. (44:55)

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