INNOVATING TO WIN TODAY’S SHOPPERS · 2019-04-18 · Millennials Total Population Mentioned /...
Transcript of INNOVATING TO WIN TODAY’S SHOPPERS · 2019-04-18 · Millennials Total Population Mentioned /...
Larry Levin
Executive Vice President
Consumer & Shopper Marketing
April 18, 2019
INNOVATING TO WIN TODAY’S SHOPPERS
New Product Pacesetters
Top Macro
Trends
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Trip Shifts: Many key channels driving Dairy sales are seeing trip growth
Total Trips
+1.8%
Food 38.1%
+1.1%Mass 3.8%
-2.1%
Club 4.8%
+2.1%Conv 2.6%
+6.2%
Drug 5.1%
-3.7%
Dollar 6.2%
+4.6%
Online 2.9%
+13.6%
Walmart 16.5%
+3.3%
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Five Macro Trends Driving CPG
Abundant And
Blurry Choices
New Dynamics
Of
Transparency
Getting Personal
With
Personalization
Ecommerce
Legitimacy
Innovation In
America
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Innovation is the Life Blood of CPG
But 9 Out of Every 10 New Products Fail
“Innovation is the oxygen of
the CPG industry and we
expect 9% of our topline
growth to come from new
products.”
Indra Nooyi
Former PepsiCo CEO
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Seven Deadly
Sins of New
Product
Innovation
F
A
I
L
U
R
E
forecast
assortment
incremental
languish
unclear
retread
elusive
90% of Launches Fail
to Meet Critical
Milestones
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New or Extended Brand
NPP Criteria
Existing Brand
in a New Category
30% Distribution
Starts the Clock on Year-130%+ Distribution
at Year-1 CompletionTop 100 Brand Launches
in F&B and Non-Food
New Products
that Completed Their
First Year in 2017
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Though Blockbuster Products Are Few And Far Between
200of these brands made
IRI NPP status
~13,000new brands were launched
in 2017
4of these brands
achieved >$100M
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26.8
22.9
19.6
11.4
14.5 14.3
NPP13 NPP14 NPP15 NPP16 NPP17 NPP18
Food & Beverage
Median Year-One Sales are Trending
Down as Consumers Seek Customization
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Million
Note: Numbers may not add to 100% due to rounding
<$20
$20-
$39
$40-
$59
$60-
$99
>$100
The Trend Continues: Blockbuster Products are Few & Far Between
YEAR-ONE DOLLAR DISTRIBUTION
37%
46%
67%
62%
66%
38%
37%
22%
27%
21%
14%
6%
4%
8%
8%
9%
8%
3%
4%
2%
4%
5%
4%
1%
3%
2 0 1 4
2 0 1 5
2 0 1 6
2 0 1 7
2 0 1 8
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17%
28%
20%
7%
19%
18%
14%
51%
41%
32%
42%
42%
24%
22%
24%
2015
2016
2017
2018
Less than $7.5 million $7.5-$9.99 million $10-$14.99 million $15-$20 million
Note: Numbers may not add to 100% due to rounding
A sizeable growth of smaller innovations landing under $15 millionShow a continued decline toward launches under $10 million
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Smaller-sized Launches Draw Limited Distribution To Match Demographic Targets—not Being
“Everything To Everyone”!
37% 40% 4
6%
58%
34%
54%
64%
79%
81% 85%
59%
67%
82%
81% 86%
UNDER $20M $20-$39.99M $40-$59.99M $60-$99.99M OVER $100M
FIRST YEAR PACESETTERS DOLLARS
Average Starting Distribution Average Quad 13 Distribution Latest 52 (ending 3/17)
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Helping
Smaller
Players Hit
It Big With
New ProductsSmall Companies
as a % of Total NPP Sales
Note: Large company has revenue of >$5B; medium $1B>x>$5B; small <$1B
62%
26%
26%
49%
12%
24%
NPP 2014 NPP 2017
+12 pts
Non-Food & Beverage
Small Companies
Medium Companies
Large Companies
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Giving Rise To A Proliferation Of New Brand Innovations,
Particularly Across The Store
FOOD & BEVERAGE NON-FOOD
2004 - 2015
2016
2017
12%
39%
40%
2004 - 2016
2016
2017
8%
14%
25%
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#1 Halo Top
$324.2M
T: 14.2% | R: 42.9%
#2 Good THiNs
$87.0MT: 11.4% | R: 29.8%
#3 Dunkin Donuts
Iced Coffee
$67.1MT: 4.2% | R: 52.9%
#4 Nestlé Splash
$55.2MT: 3.9% | R: 48.9%
#5 Lifewtr
$50.4MT: 1.6% | R: 48.4%
#6 SMARTMADE by
Smart Ones
$49.3MT: 3.3% | R: 42.5%
#7 HERSHEY’S
Cookie Layer Crunch
$47.7MT: 3.3% | R: 42.5%
#8 Hillshire
Snacking
$47.5MT: 2.8% | R: 46.5%
#9 Well Yes!
$47.3MT: 7.8% | R: 23.1%
#10 Cracker Barrel
Macaroni & Cheese
$46.6MT: 4.4% | R: 44.9%
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Dairy Rising Stars which could Reach Pacesetter Status
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…and the Next Wave Is Quickly Building!It’s About Experiences… and SolutionsAuthenticity Moves the NeedleThe Old Way is OBSOLETE!Changing Demographics are Changing the New Product Development Process
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23%
24%
20%
23%
10%
% U.S. POPULATION (U.S. Census)
Silent Generation
Baby Boomers
Gen X
Millennials
Gen Z
Millennials Now Account for One-Quarter of the U.S. Population
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23%
24%
20%
23%
10%
% U.S. POPULATION (U.S. Census)
Silent Generation
Baby Boomers
Gen X
Millennials
Gen Z
Millennials Now Account for One-Quarter of the U.S. Population
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13
$240B
2022by
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…and They Love to Tap into New Experiences Through New Products
% of Consumers Who Consider Themselves Avid New Product Adopters
5%
8%
7%
7%
10%
11%
17%
7%
10%
14%
18%
22%
23%
29%
Pet Care
Health Care
Home Care
Beauty/Personal Care
Electronics
Beverage
Food
Millennials Boomers+
+12 pts
+12 pts
+7 pts
+11 pts
Source: IRI 2018 New Products Survey.
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Natural Ingredients MatterImpact of Natural Ingredients when Considering
New Products, by Sector and Age | Top 2 Box
Source: IRI 2018 New Products Survey.
18%
17%
23%
23%
25%
26%
27%
27%
Millennials Boomers+
Beauty / Personal Care
Health Care
Food & Beverage
Home Care
+4 pts
+4 pts
+7 pts
+9 pts
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Healthy
Living is
Important
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And, Of Course, Millennials Are Very Self-Care Focused
Source: Harnessing the Power of Self-Care to Drive Sustainable Growth
2%
3%
7%
11%
18%
19%
40%Lifestyle (Diet, Exercise, F&B)
Doctor / Lab Visits
Prescription Medications
Dietary Supplements
OTCMedications
Alternative Therapies
PharmacistConsultations
Lifestyle by Age
18-34 YO 52%35-44 YO 48%45-54 YO 42%55-64 YO 35%
65+YO 26%
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37% of Consumers Say FOOD is Just As Powerful as MEDICATION
Placing Priorities on
Products that
Promote a Healthy Lifestyle
Better for You
Removal of Less Desirable Ingredients
Simpler Ingredients
Healthful Ingredients
Omega-3sFiber
ProteinFruits & Vegetables
Superfoods
Natural & Organic
Antibiotic-Free
Non-GMO
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Prefer to Buy from Green CompaniesTotal U.S. = 32%
Source: IRI Consumer Connect Survey,
The Quest for Wellness
Extends to the Environment
36%Millennials
30%Gen X
30%Boomers
32%Seniors
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Plants Are Now a
Common Ingredient
in Powerful CPG
Launches
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Set Your New Brands Up to Win With Millennials
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Note: IRI Shopper Loyalty™
A Halo on Top:
The Making of a Pacesetter
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Invest to Understand
the Preferences of High-Value Consumers
Note: IRI Shopper Loyalty™
1. Sea Salt Caramel Light
2. Mint Chip Light
3. Chocolate Chip Cookie Dough Light
4. Vanilla Bean Light
5. Birthday Cake Regular
6. Chocolate Light
7. Peanut Butter Cup Light
8. Cookies & Cream Regular
9. Chocolate Almond Crunch Light
10. Black Cherry Light
Preferred FlavorsTotal Buying Households
1. Chocolate Chip Cookie Dough Light
2. Birthday Cake Regular
3. Mint Chip Light
4. Sea Salt Caramel Light
5. Peanut Butter Cup Light
6. Chocolate Light
7. Vanilla Bean Light
8. Cookies & Cream Regular
9. Chocolate Almond Crunch Light
10.Chocolate Mocha Chip Regular
Preferred FlavorsMillennial Households
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Understand
That Millennials
Learn About
New Products
Differently
Source: IRI 2018 New Products Survey.
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Source: IRI 2018 New Products Survey.
Millennials
Total Population
Mentioned / Recco.
by Family or Friend
Information from
Website or Email
Smartphone
Apps
Info from Blogs / Social
Networking Site
In-Store Touch Screen
Digital Signs 11%
15%
19%
34%
20%
34%
27%
34%
56%
70%
Influence in Driving Awareness of New
Products | % of Consumers, Top 2 Box
Understand That Millennials Learn
About New Products Differently
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User-Generated Content Is a Trusted Source of Information
Source: http://www.adweek.com/brand-marketing/infographic-how-millennials-and-baby-boomers-consume-user-generated-content-175307/
47% of millennials trust user-generated content
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User-Generated Content Is a Trusted Source of Information
Source: http://www.adweek.com/brand-marketing/infographic-how-millennials-and-baby-boomers-consume-user-generated-content-175307/
trust content created by brands
47%vs.
25%
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Tap Into Instagram to Drive Imagery Through Pictures
Source: http://www.adweek.com/brand-marketing/infographic-how-millennials-and-baby-boomers-consume-user-generated-content-175307/
of millennials rate Instagram
as their preferred platform
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Tap Into Instagram to Drive Imagery Through Pictures
Halo Top Share of Earned Social Volume by Channel | 2017 Calendar Year
Source: IRI Social Advantage™.
59.4%
28.6%
10.9% 1.0%
Images Microblogs Blogs Forums
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And to Drive
Awareness
and Trial
Source: http://www.adweek.com/brand-marketing/infographic-how-millennials-and-baby-boomers-consume-user-generated-content-175307/
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Making Chobani Yogurt Drinks a $43M Pacesetter
ShopperSights Experian Marketing Service's Simmons
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Keep Diversity in Mind!
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Keep Diversity in Mind!
ConfidentConnectors
FreeSpirits
Conscious Naturalists
NewTraditionalists
StrugglingWanderers
ConcernedAspirationalists
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Keep Diversity in Mind!
NewTraditionalists
StrugglingWanderers
Different Segments Show Noteworthy Differences in Purchase Behaviors
Source: National Consumer Panel
214DollarIndex
142DollarIndex
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Keep Diversity in Mind!
NewTraditionalists
StrugglingWanderers
New Traditionalists Spend 2X More Than the Total Population on Chobani Yogurt Drinks
Source: National Consumer Panel
214DollarIndex
142DollarIndex
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Media MarketsTarget Pen
Index
Austin, TX 244
Washington, DC
(Hagerstown, MD)205
Dallas-Ft. Worth, TX 200
Salt Lake City, UT 198
Houston, TX 192
Denver, CO 187
San Diego, CA 154
San Antonio, TX 147
Minneapolis-St. Paul, MN 146
Seattle-Tacoma, WA 144
Target Advertising to High-Potential
Media Markets for Enhanced Impact
Top 10 Media Markets | Ranked Penetration Index and Where Target Millennial HHs Exist
ShopperSights DMAs
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266
248
221
220
197
172
163
156
156
169
Super Target
Whole Foods Market
H-E-B Plus
Sprouts Farmers’ Market
Hy-Vee
Wegman’s Hy-Vee
H-E-B
Smith’s Food & Drug
Jewel / Osco
Ensure
Distribution
Aligns with
Retailer
Preferences
Top Retail Banners Ranked by
Index | Target ACV > $800M
ShopperSights Chain Store Guide (CSG)
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600 N. Glebe Rd., Arlington, VA 22203
6701 Morrison Blvd., Charlotte, NC 28221
2425 N. Harrison St., Arlington, VA 22207
108 Purcellville Gtwy Dr, Purcellville, VA 20132
11806 Spectrum Ctr., Reston, VA 20190
112 S. Sharon Amity Rd, Charlotte, NC 28211
9720 Rea Rd., Charlotte, NC 28277
9600 Falls of Neuse Rd., Raleigh, NC 27615
42015 Village Center Plz., Aldie, VA 20105
4641 Duke St., Alexandria, VA 22304
$20.24M
$27.59M
$18.96M
$19.83M
$18.28M
$23.68M
$22.71M
$20.28M
$17.67M
$16.87M
Zeroing In
On Specific
Stores With
the Highest $
Potential
Top Store $ Potential
Ranked on Potential Index
ShopperSights Chain Store Guide Release
285
268
255
217
215
207
201
201
290
184
Product
Potential Index
Total Estimated
ACV Store Address
It’s Not About Perfect Distribution…..
It’s About Being Distributed Perfectly!
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Also Reach Out Through The Media They Consume
ShopperSights Experian Marketing Service's Simmons
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ShopperSights Experian Marketing Service's Simmons
Reach New Traditionalists on the
Websites They Frequent Most
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Also Reach Out Through The Magazines They Read
ShopperSights Experian Marketing Service's Simmons
P R E F E R R E D M A G A Z I N E S
Will you still love
me tomorrow?
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Being a Pacesetter doesn’t ensure long term success
Year 2 Principles
Minimally retain distribution and tell people you are there
Variety is the spice of life
Repeat, repeat, repeat
Do not underspend
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Support in Year 2 Drives Disproportionate Success
WHILE UNSUPPORTED PRODUCTS TRULY HAD TROUBLE FINDING THEIR WAY
4% of New Products
Achieve $20M
in U.S. MULO &
Maintain ACV in
Year 2
24% Maintained or
Increased Media in
Year 2
29% Sales Decreased
71%Sales Increased
76% Decreased Media
in
Year 2
36% Sales Increased
64%Sales Decreased
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Questions
FOR MORE INFORMATION,
CONTACT…
Larry Levin
Twitter: @larrylevin127
1.818.450.7614