Download as PDF, PPTX
![31
Transparency: brands invest in online reviews
Through investments… …internal initiatives… …and paid relationships
Read more: [Client Only] 60+ Startups in Influencer Marketing](https://image.slidesharecdn.com/cb-insightsdisrupting-cpg-briefing-180910033942/75/CB-Insights-Disrupting-CPG-31-2048.jpg)
![34Source: The Brick-and-Mortar Food Space Goes Driverless [client only]
Speed supports
convenience](https://image.slidesharecdn.com/cb-insightsdisrupting-cpg-briefing-180910033942/75/CB-Insights-Disrupting-CPG-34-2048.jpg)
![47
Startups, VCs, and corporates tackle wellness
from different angles
Read more: The Rise Of The Wellness Economy
[INTERACTIVE DEMO]](https://image.slidesharecdn.com/cb-insightsdisrupting-cpg-briefing-180910033942/75/CB-Insights-Disrupting-CPG-47-2048.jpg)
![48
Wellness funding takes off, acquisitions multiply
Read more: The Rise Of The Wellness Economy
[INTERACTIVE DEMO]](https://image.slidesharecdn.com/cb-insightsdisrupting-cpg-briefing-180910033942/75/CB-Insights-Disrupting-CPG-48-2048.jpg)
![64
…to Pernod Ricard
“Connected [glassware] isn’t a gimmick…the bottles gibe us insights into how people drink our
brands at home.”
- Pierre-Yves Calloc’h, Global Digital Acceleration Director, Pernod Ricard
Source: Digiday
S M A R T E R C O C K T A I L S](https://image.slidesharecdn.com/cb-insightsdisrupting-cpg-briefing-180910033942/75/CB-Insights-Disrupting-CPG-64-2048.jpg)
Uploaded byBold Kiln
CB Insights - Disrupting CPG
The document discusses the transformation of the consumer packaged goods (CPG) industry through startups, new technologies, and changing consumer preferences. It highlights the challenges faced by CPG companies, including the rise of activist investors, new entrants, and evolving consumer tastes emphasizing wellness and personalization. The text outlines strategies such as vertical integration and innovation partnerships that established companies are adopting to navigate the competitive landscape.
More Related Content
Similar to CB Insights - Disrupting CPG
CB Insights - Disrupting CPG
- 1. 1 The startups, corporations,and emerging technologies transforming consumer packaged goods. Disrupting CPG
- 2. 2 The presentation willalso be sent to you. Feel free to share with colleagues. The resolution of some slides may be suboptimal due to the webinar software. Those slides will look fine in the presentation that we send you. Briefing recording will be distributed W I T H I N 2 4 H O U R S
- 3. 33 @cbinsights @zoe_leavitt #CPGinsights J O IN T H E C O N V E R S A T I O N O N T W I T T E R
- 4. 4 W H OW E A R E The technology market intelligence platform. CB Insights software lets you predict, discuss, and communicate emerging technology trends using data in ways that are beyond human cognition. We are a leader in the Expert Automation & Augmentation Software (EAAS) space.
- 5. 5 T R US T E D B Y T H E W O R L D ’ S L E A D I N G C O M P A N I E S “We use CB Insights to find emerging trends and interesting companies that might signal a shift in technology or require us to reallocate resources.” Beti Cung, Corporate Strategy, Microsoft
- 6. 6 TRANSFORM draws onthe experience of successful executives from today's top companies and the latest research on technology, growth and innovation to cut through the fog about the coming digital revolution. JOIN US ON DEC. 4 & 5 IN NYC RSVP TODAY
- 7. 7 Zoe Leavitt Zoe Leavittis a senior intelligence analyst at CB Insights covering consumer goods and retail technology. Zoe's research has been featured in the New York Times, Wall Street Journal, Good Morning America, and more, and Zoe was named the #1 voice in retail for 2018 by LinkedIn. Along with her data-driven reports, she leads the weekly newsletter CPG Insights. Prior to joining CB Insights, Zoe worked in equity research at Cowen and drove consumer analytics efforts at the consumer finance group of the Bank of China in Shanghai. Zoe graduated from Stanford University with a degree in International Relations. @zoe_leavitt [email protected] Senior Intelligence Analyst A B O U T T H E A N A L Y S T
- 8. 8 Contents 9 2 1 3 5 44 5 2 6 1 CPG: an industry in flux Vertical integration The post-storefront world Betting on wellness The race toward personalization Looking forward: personalized distribution
- 9. 9 The CPG industryfaces major challenges Activist investors Changing consumer tastes New entrants Dispersed points of sale TIME
- 10. 10 Pinnacle Foods Targetedby Activist Investor Jana Partners April 20, 2018 Activist investors reshape company roadmaps Sources: NYTimes, Food Dive, New York Post, WSJ, CNBC A C T I V I S T I N V E S T O R S
- 11. 11 CEOs face newpressures Since the start of 2017, we’ve seen CEO turnover at CPG companies including: *Nestle CEO Mark Schneider took office on Jan. 1, 2017 A C T I V I S T I N V E S T O R S
- 12. 12 CPG leaders killtheir darlings A C T I V I S T I N V E S T O R S / C H A N G I N G T A S T E S On a mission to kill “zombie brands,” targeting 125+ eliminations by year end Sold US candy business, prioritizing pet care, water, coffee, frozen food, and baby food Shifting focus toward pet care, which drove revenue growth in Q1’18 Launching major portfolio revamp focused on pet care and pet services On Aug. 30 Campbell’s announced plan to sell its Fresh and International divisions In 2016 P&G transferred 41 beauty brands to Coty and has since focused on reducing SKUs and adding natural ingredients
- 13. 13 Consumers demand moreout of food… Long-term benefits Visually appealing Experiential Lifestyle-oriented C H A N G I N G T A S T E S • High-protein, plant- based products with beneficial ingredients • Focus on mental and physical health • Vegan, gluten-free options • Bold colors in products and on packaging • Primed for social media • Farm-to-table or sustainably sourced products • Products bundled with services • Memorable points of sale • Personalized products • Brand emphasizes convenience • Promotes energy, sleep quality, and other lifestyle benefits
- 14. 14 …and expect moreout of beauty products Promising long- term benefits Visually appealing Experiential Lifestyle-oriented C H A N G I N G T A S T E S • Beneficial ingredients • Plant-based products • Chemical-free formulas • Bold colors on both products and packaging • Focus on social media • Farm-to-face products • Products bundled with services • Memorable points of sale • Personalized products • Emphasis on convenience • Suited for exercise, travel, and more
- 15. 15 Meanwhile, startups posenew threats… Disclosed funding: $750M Select investors: Healthcare of Ontario Pension Plan (HOOPP) Disclosed funding: N/A Select investors: CircleUp Disclosed funding: $104M Select investors: Kleiner Perkins Caufield & Byers, Tyson Ventures Disclosed funding: $506M Select investors: Bill Gates, Temasek Holdings, Khosla Ventures N E W E N T R A N T S
- 16. 16 … with moreon the way N E W E N T R A N T S
- 17. 17 Weakening incumbents &hot M&A environment attracts specialized investors N E W E N T R A N T S
- 18. 18 Tech leaders blurindustry lines *Table is illustrative, not meant to be fully inclusive of company efforts N E W E N T R A N T S / C H A N G I N G P O I N T S O F S A L E Controlling CPG points of sale Making CPG-related equity investments Shaping industry trends Using data to launch private labels N/A N/A Hema grocery stores Ele.me
- 19. 19 The great dispersal:points of sale multiply C H A N G I N G P O I N T S O F S A L E Smart homes Public venues Voice commerce Brick-and-mortar retail Mobile commerce E-commerce Virtual reality On-demand services Automated storefronts
- 20. 20 CPG leaders lookto startups, incubator partners S H I F T I N G F R O M R E A C T I V E T O P R O A C T I V E Acquiring companies Directly investing in startups Managing internal VC fund Launching externally-managed VC fund Supporting internal innovation studios Working with incubator/accelerator programs
- 21. 21 I N CU M B E N T S F I G H T B A C K Vertical integration
- 22. 22 Vertical integration: whynow? In the face of new competition, retailers can no longer rely on being middlemen; private labels can become valuable differentiators CPG manufacturers hope that controlling their own points of sale can help them build loyalty and capture shopper data Quote sources: Walmart, Covergirl
- 23. 23 Facing increased competition,retailers turn to private labels Albertsons is on track to launch 1,400 new private label products in 2018, more than double its 2017 rate. Its O Organics brand hit $1B in Jan’18. Kroger’s Simple Truth brand hit $2B in annual sales this year, and Kroger just partnered with Alibaba to sell its private labels in China. Target plans to expand its private label offerings and in Jun’2018 rolled out new home goods label Made By Design. Walmart aims to boost loyalty through private label growth; in Jun’2018 it launched wine private label Winemakers Selection. Sources: Albertsons, Kroger, Target, Walmart
- 24. 24 Who’s done itbest? Read more: How Sephora Built a Beauty Empire to Survive the Retail Apocalypse R O L E M O D E L S
- 25. 25 Marketplaces capture data;private labels turn data into sales “We’ll keep adding selection.” - Four words on Amazon’s private labels (from its Q4’17 earnings call) that should strike fear into brands’ hearts Amazon knows your customers better than you do Source: Amazon Patents Always-On Video Streams Of Friends And Relatives’ Homes Amazon owns the points of sale
- 26. 26 Big CPG movesinto physical retail through new flagships… These stores focus on providing memorable experiences and encouraging social media sharing.
- 27.
- 28. 28 Legacy companies useM&A to move online 4/18/17 9/20/17 2/15/18 3/15/18 5/23/18 4/30/18 1/10/18 11/15/17 $300M $3.35B $100M $200-700M
- 29. 29Source: Quartz In CPG,online shoppers need extra comfort.
- 30. 30 Transparency: it’s timeto take packaging out of online product listings So far, CPG companies have tended to show products online as they would in stores — by putting up photos of packages. Online, brands have more freedom to highlight the products within the packages, using photos to make their products more appealing to new shoppers. Read more: The 4 Trends Driving Packaging Industry Disruption
- 31. 31 Transparency: brands investin online reviews Through investments… …internal initiatives… …and paid relationships Read more: [Client Only] 60+ Startups in Influencer Marketing
- 32. 32 Visualization: augmented realityenables product testing Modiface enables virtual makeup try-ons on websites, mobile apps, and in-store screens for L’Oreal, Sephora, Estee Lauder, and other clients. The platform gathers visual shopper data, offers personalized suggestions, and supports sales. L’Oreal acquired Modiface in March 2018. Online CPG marketplace Boxed piloted augmented reality in December 2017 to let people test whether bulk packages would fit inside their cabinets. While it hasn’t yet gained traction, the experiment shows how AR/VR could support sales of even low-margin items. Boxed photo source: Business Insider
- 33. 33 Walmart considers visualstrategies online Recent Walmart patent applications show a focus on helping online shoppers gain a better view of products. Live streaming in-store produce sections Read more: Walmart Patent Aims to Solve the Biggest Obstacle to Online Grocery Shopping; Walmart Patent Wants You to Shop at Home Using Virtual Reality Showcasing products in virtual reality
- 34. 34Source: The Brick-and-MortarFood Space Goes Driverless [client only] Speed supports convenience
- 35. 35 N E WO F F L I N E C H A N N E L S The post- storefront world
- 36. 36 New offline channels:why now? People are less likely to visit centralized retail locations Increased competition from retailers’ private labels (online and offline) Brands’ desire to capture shopper attention in fragmented media landscape Source: Business Insider US mall visits fell by 50% from 2010-2013, according to Cushman & Wakefield
- 37. 37 The great dispersal:new points of sale integrate with daily experiences Smart homes Gyms School campuses Office buildings CarsTravel Public venues
- 38. 38 WeWork turns officesinto sales channels Office management giant WeWork has been a major distributor of coffee, beer, and snacks to its tenants for years. In July, it launched WeMRKT, a new retail space inside WeWork buildings that will stock CPG products made by WeWork member startups. Participants so far include Barnana and Sunniva Super Coffee. A D D I T I O N A L P L A Y E R S I N O F F I C E C P G S A L E S :S E L E C T B R A N D P A R T N E R S :
- 39. 39 Cargo markets toUber riders NY-based Cargo installs mobile-operated kiosks inside ride-sharing vehicles, selling snacks, beauty products, and other items. So far, it partners with Uber in the US and Grab in Asia. It focuses on gathering user data through its mobile app for CPG brands. Looking forward, Cargo’s model could support consumption by riders in self-driving vehicles. A D D I T I O N A L R I D E - H A I L I N G P L A Y E R S :S E L E C T B R A N D P A R T N E R S :
- 40. 40 Vengo stocks productsin gyms Vengo recently partnered with Blink Fitness to install its cashless vending machines with interactive digital screens in gyms nationwide. In its gym locations, Vengo will sell headphones, shower products, phone chargers, and other relevant items. Vengo also operates in hotels, university campuses, and other high-traffic areas. A D D I T I O N A L G Y M - B A S E D M A R K E T P L A C E S :S E L E C T B R A N D P A R T N E R S :
- 41. 41 Hotels offer immersiveshopping experiences… While many hotel chains sell products, brands have begun to connect with consumers by opening their own hotels. Yves St. Laurent showcases beauty products in its YSL Beauty Hotel, which will open in NY in Sept’2018. Japanese retailer Muji opened its first two hotels this year in China to promote its home goods and personal care products. AccorHotels partnered with fragrance maker Lola James Harper to open a hotel in Paris in late 2018.
- 42. 42 … while airplaneshelp startups get off the ground The strategy helps airlines seem more innovative and better serve passengers, while handing startups a captive audience.
- 43. 43 Appear Here helpsdrive pop-up retail economy CPG leaders from Unilever to Coca Cola, which don’t tend to operate their own stores, have experimented with pop-ups to attract shoppers and gather data.
- 44. 44 H E AL T H Y S T R A T E G I E S Betting on wellness
- 45. 45 Wellness: why now? Post-recession,healthy lifestyles and fitness routines became the new luxury status symbols Social media creates “always on” pressure for users and turns wellness into aspirational lifestyle People are seeking alterative strategies for controlling their own health Source: NYTimes “In 1966, more than three-fourths of Americans had great confidence in medical leaders; today, only 34 percent do.” - New York Times, Jan. 23, 2018
- 46. 46Read more: 150+Startups Cultivating The Wellness Industry Wellness takes off across verticals
- 47. 47 Startups, VCs, andcorporates tackle wellness from different angles Read more: The Rise Of The Wellness Economy [INTERACTIVE DEMO]
- 48. 48 Wellness funding takesoff, acquisitions multiply Read more: The Rise Of The Wellness Economy [INTERACTIVE DEMO]
- 49. 49 Leading alcohol playersshift priorities “The broader beer trends are concerning to me and … we’re going to be playing outside the traditional definition of beer.” — Andy Thomas, CEO of Craft Brew Alliance Read More: Beyond Beer: Major Brewers Are Investing In Cannabis, Kombucha, And More AB InBev created a new role, Chief Non-Alcoholic Beverage Officer, and aims to grow its non-alcoholic revenue from 10% of the total today to 20% by 2025.
- 50. 50 Big food companiesturn toward water In August 2018, PepsiCo acquired SodaStream for $3.2B. On the smaller side, Danone’s Danone Manifesto Ventures led a $10.6M investment into personalized at-home mineral water maker Mitte.
- 51. 51 Wellness startups promiseretailers a win-win Read more: A Wellness Win-win-win
- 52. 52 M A RK E T S O F O N E The race toward personalization
- 53. 53 Personalization: why now? Shoppershave long sought personalized products and services… …and new technologies are making the strategy more viable today, including: Source: U.S. News & World Report Big data Enhanced manufacturing capabilities DNA testing and microbiome analysis Machine learning
- 54. 54 Step 1: framingproducts within lifestyle needs “People don't want to buy a quarter-inch drill. They want a quarter-inch hole.” - Theodore Levitt, Harvard Business School Through product labels… …and e-commerce taxonomies
- 55. 55 Step 2: offeringpersonal product guidance “When you talk to users, everyone says, ‘I’m very different, I’m an outlier.’ Everyone says that.” – Christina Bognet, CEO, Platejoy
- 56. 56 Companies expand productselections, targeting a wider range of shoppers Source: Racked
- 57. 57 Step 3: fullypersonalized products “The future of beauty will be very linked to personalization and precision.” - Guive Balooch, Global VP Tech Incubator, L’Oreal Total funding: $7.5M Select investors: Lerer Hippeau, Maveron , Forerunner Ventures Total funding: $19M Select investors: Forerunner Ventures, Sherpa Capital Total funding: $9M Select investors: Y Combinator, GGV Capital
- 58. 58 Personalization vs. standardization:reducing the burden of choice Along with the rise of personalized products, we see a parallel trend in startups offering limited selections of one-size-fits-all products. Both strategies solve for the same pain point: too many choices.
- 59. 59 Personalization platforms collectnew data streams for brands … and observing.By asking…
- 60. 60 Can science supportDNA-based diets? “People search for things, they don’t pick the brand. When people talk about brand marketing, I’m just thinking, ‘What’s that?’” - Kozo Takaoka, head of Nestle Japan In 2016, Campbell’s invested in DNA-based meal plan startup Habit, but it has failed to gain much traction so far. Last week, Nestle began piloting a DNA-based nutrition service in Japan, offering users personally formulated beverage capsules.
- 61.
- 62. 62 Consumer leaders considerIoT-based personalized subscriptions: from Walmart… T H E F U T U R E O F C O M M E R C E ? Walmart recently patented methods of using connected appliances — including a smart trash can — to track shoppers’ consumption in the home and automatically reorder depleted products.
- 63. 63 …to Procter &Gamble… S E N S O R - F I L L E D H O M E S
- 64. 64 …to Pernod Ricard “Connected[glassware] isn’t a gimmick…the bottles gibe us insights into how people drink our brands at home.” - Pierre-Yves Calloc’h, Global Digital Acceleration Director, Pernod Ricard Source: Digiday S M A R T E R C O C K T A I L S
- 65. 65 Will self-driving carshost the kitchens of the future?
- 66. 66 Using IoT to setup in- home stores Walmart recently applied for a patent for an “unattended retail storefront” that would showcase unsold products in consumers’ homes, and charge them upon use. The kiosks could be restocked by drone.
- 67.
- 68. 68 The CB Insightsplatform has the underlying data included in this report W H E R E I S A L L T H I S D A T A F R O M ? CLICK HERE TO SIGN UP FOR FREE
- 69.