On February 2016, some of the best FMCG (Fast Moving Consumer Goods) companies met to discuss their growth strategies. Schieber Research has analyzed the reports and conference calls of these companies, to find out what the future holds for food, beverage and beauty / household products in North America, and how marketing and consumer trends that are changing the industry.

1. Consumer Goods Strategic Trends //
CAGNY* Round-Up, March 2016
* Consumer Analyst Group New York
Photo: Ingredion

2. Introduction
• The following presentation demonstrates strategic trends in
innovation and marketing, as demonstrated by the leading
food & beverage companies at the recent CAGNY - Consumer
Analyst Group New York conference (Feb., 2016).
• It’s part of our CAGNY series, which started in 2014 (click here for
2014, click here for 2015)
• The presentation is a result of the analysis of leading consumer
goods company reports.

3. Companies included in this analysis
Food & Beverage Non-Food
Ingredients

4. Main Themes discussed on CAGNY 2016
Leveraging
digital
Related: H&W,
marketing,
commerce,
millennials
digital
Millennials
Related:
sustainability,
wellness,
authenticity, digital
demographics
Wellness,
convenience
, taste
Related: protein,
snacking, small meals,
veggies,
personalization
trends
Collaboration,
activation retail
Related: marketing,
events, on the go

5. Strategic Pillars Discussed on CAGNY 2016
Strategy & Innovation
Innovation Platforms Digital Marketing New Channels
Pricing and
Optimization
Consumer Trends
Health & Wellness Convenience & Snacking Indulgence Premiumization
Enablers & Macro-Trends Discussed
Digital Technology
Changing Households &
Demographics
Slowing Economy +
Geopolitical Instability
Regulative & Retail
Environment

6. Strategic Pillars Discussed on CAGNY 2016
Strategy & Innovation
Innovation Platforms Digital Marketing New Channels
Pricing and
Optimization
Consumer Trends
Health & Wellness Convenience & Snacking Indulgence Premiumization
Enablers & Macro-Trends Discussed
Digital Technology
Changing Households &
Demographics
Slowing Economy +
Geopolitical Instability
Regulative & Retail
Environment

7. Macro-Trends Discussed by Participants

8. Macro-Trends Discussed by Participants

9. Digital | Everywhere
Digital technology is affecting commerce,
marketing, and consumption, and was one
of the main themes discussed by
companies, although – innovation is still
lacking for most participants.
Campbell’s mentioned the
food delivery landscape, which
is changing food shopping. It
mentioned that in China, e-
commerce will account for 20%
of total retail sales.
According to the company,
Mobile commerce will roll
$150 BILLION in U.S. by 2019
According to Kellogg’s,
digital shelf exposure
influences 35% of US in-
store sales; and online
shoppers are more loyal
and spend more.

10. Digital | Commerce
non-food & beauty segments demonstrate a digital innovation strategy

11. Demographics | Millennials
Smucker’s: “the Millennial consumers (are) the driving force behind many of
the changes across the industry”:
Food as
experience
Better For
You
On the Go
smaller and emerging brands continue to gain foothold
authentic food with familiar and fewer ingredients
convenient snacking and the ability to purchase through
multiple channels are of increasing importance.
Digital lives
social media and mobile devices provide immediate
access to data: information about food is omnipresent
Companies are looking for new ways to reach millennial
consumers (born between 1981 – 2000)

12. Demographics | Millennials
WhiteWave: “Millennials will have
the most spending power of all
demographic groups by 2017 and are
estimated to account for
approximately 75% of food industry
growth over the next decade”

13. Changing Families
Companies are adapting to the profound changes in family structures,
addressing single-parent / LGBT households, as well as the highly involved
millennial dad through marketing, as well as product offering

14. Strategic Pillars Discussed on CAGNY 2016
Strategy & Innovation
Innovation Platforms Digital Marketing New Channels
Pricing and
Optimization
Consumer Trends
Health & Wellness Convenience & Snacking Indulgence Premiumization
Enablers & Macro-Trends Discussed
Digital Technology
Changing Households &
Demographics
Slowing Economy +
Geopolitical Instability
Regulative & Retail
Environment

15. Consumer Trends | What companies are saying

16. Consumer Trends | What companies are saying
WhiteWave

17. The Snacking Opportunity
Snacking and on the go consumption are key innovation opportunities
• WhiteWave: “While consumers want healthier foods, they increasingly
want them to be more convenient:”
On The Go
Smaller
Meals
Single
Households
More than 50% of the population wants healthy foods
and beverages that can be consumed on the go
Smaller meals becoming the norm (“between meals”)
smaller meal occasions due to smaller families
Busy
Lifestyles
active families are looking for more healthy snacks and
easy-to-prepare healthy meals

18. The Snacking Opportunity
• Kellogg’s: snacking as a “huge
opportunity”
• Hain Celestial Sensible
Portions - healthier
snacks for moms to pack
for kids for school and at-
home. $ 170 million sales

19. Convenience | Fitting into new lifestyles
• Smucker’s – more
convenient coffee (K-
Cups + Perfect
Measures)
• Tyson
Foods –
snacking
platform
for on-the-
go

20. Taste | Permissible Indulgence
Kellogg’s: Smorz is back by
popular demand – “indulgence,
taste and fun are still as relevant
as ever in the cereal category”

21. H&W | Growth in BFY Foods
Conventional food
categories: 1%
organic foods grew 3X the rate of conventional
Plant based foods grew 4X the rate of conventional
Y-O-Y $ growth % (2014/2015)
Source: WhiteWave
“67% of population prefers minimally processed foods”
“consumers are looking for “nutritious, flavorful, convenient, and
responsibly produced products”
Non GMO + Organic + natural
better for you foods: 12%

22. H&W | Growth in BFY

23. H&W | Growth in BFY
Sunbites is delivering
approximately $400 million in
estimated retail sales globally.
The “purity” theme continued this
year, not only in food and
beverage, but in beauty as well.

24. H&W | The Protein Trend
Hain Celestial: “Protein is one of the
hottest food trends in the US, and the
category is on fire”
Hain Pure Protein segment = $ 359 million
= 13% of the Hain Celestial business in
fiscal 2015
Protein continues its growth, and
companies are developing platforms and
products around this offering.

25. H&W | Rise of the Veggie Cuisine + Plant source
Kellogg’s: protein packed veggie bowls
Kellogg’s: “Plant Power”

26. H&W | Free From
Hain Celestial responds to UK “Free From” trend:
low sodium
low-sugar
Pepsico (US): gluten-free
oatmeal under Quaker

27. Strategic Pillars Discussed on CAGNY 2016
Strategy & Innovation
Innovation Platforms Digital Marketing New Channels
Pricing and
Optimization
Consumer Trends
Health & Wellness Convenience & Snacking Indulgence Premiumization
Enablers & Macro-Trends Discussed
Digital Technology
Changing Households &
Demographics
Slowing Economy +
Geopolitical Instability
Regulative & Retail
Environment

28. Platforms | Brand Extensions
• “nutrition health-
oriented angles to
Eggo”: gluten-free,
oats and berries
• Thick and Fluffy has
been a “huge
success”
• fun to kids
H&W
Platform
Focus on
indulgence
Kids
Oriented
Kellogg’s: Building the Ego brand across platforms,
recognizing opportunity (4 year CAGR %6)

29. Platforms | Brand Extensions
Pepsico: Mountain Dew Kickstart was
launched in 2013 and now has an
estimated retail sales approaching
$400 million. The superbowl’s
“puppymonkeybaby” received 3
billion impressions
bigger, more scalable ideas for our
global brands while maintaining local
relevance and innovation

30. Platforms | Brand Extensions
P&G: Tide

31. Marketing Mix | Digital vs Traditional
Digital
25%
Traditional
75%
Smucker’s US, L’oreal: 25% of
marketing spend in 2016
Digital Traditional
Digital
40%
Traditional
60%
McCormick, US: 40% in 2015
Digital Traditional

32. Pricing | Premiumization, Pricing / Sizing
P&G: the market
is undergoing
premiumization

33. Pricing / Sizing
“It has been possible to take this idea of
premiumization and affordability through a range
of packages, priced appropriately and drive
transactions and revenue and therefore price
through this strategy in North America” (Pepsico
on the mini can)

34. Growth Strategies – Penetration & Expansion

35. Growth Strategies – Penetration & Expansion
a pessimist
complains about
the wind, an
optimist hopes it
will improve and a
realist adjusts
their sails. And
adjusting our sails
is what we have
been doing.
(Pepsico)

36. Contact Us to Learn More…
Leveraging
digital
Discover the latest
innovations for FMCG
in digital
digital
Millennials
Discover how best in class companies in
your industry approach millennials
through products, services and
marketing
demographics
Wellness,
convenience
taste
Learn about the latest
innovations responding to
these trends – by leading
companies / innovators
trends
Collaboration,
activation retailShopper marketing and retail
collaboration case studies

37. Contact Us
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Tel Aviv, providing tailor-made reports and competitive
intelligence reports. We help companies make smarter decisions,
which take into account relevant market, consumer and shopper
trends.
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Photo: Ingredion