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Snacking on (and Drinking) Cereal: CPG News, Week of Feb 1-5

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February 5, 2021
by Veronica Drake
7 Minutes

A Couple Good Reads

Five Problems With Today’s Demand Planning—and How to Solve Them, Supply Chain Brain

What Forecasters Can Learn From Punxsutawney Phil On Groundhog Day by Eric Wilson, Institute of Business Forecasting & Planning 

Investments & Acquisitions

Future Meat Technologies, a pioneer in the cell-based meat space and responsible for helping lower the cost of cell-based meat by 28,000 times, announced $26.75 million in new funding that will be used to further expand its accessibility to consumers.

Pea-based snack brand Peatos closed a $12.5 million Series B this week, less than six months after its $7 million Series A.

Chobani is reportedly considering an IPO this year that it hopes would value it between $7 billion and $10 billion, a move that could fuel its efforts to branch out into new product categories.

Startup Pairwise, which uses CRISPR gene-altering technology to improve the taste and texture of fresh produce, raised a $90 million Series B.

Kraft Heinz and Hormel Foods are nearing an agreement that would transfer ownership of Planters to Hormel for a reported $3 billion.

New Products and Partnerships

Father and son pair Surinder and Daven Kumar have launched TruEats Modern Baking Co., a startup that uses ingredients like chickpeas, buckwheat, and mung bean in a line of better-for-you baking mixes.

Kraft Heinz is seeing pink for Valentine’s Day, announcing a giveaway to 1,000 winners who will receive a box of Kraft’s classic macaroni and cheese with a limited edition candy flavor packet that gives the dish a pink hue and a lightly sweet flavor.

Functional water brand Hellowater is partnering with Brandt to create a line of toxin-eliminating and immune-protecting beverages.

Kellogg Co. and McKee Foods Corp. are teaming up to release a cereal version of Little Debbie Cosmic Brownies, which is set to be available in May. The release follows the announcement of a Little Debbie Oatmeal Creme Pie cereal in December. 

Nestle’s Carnation brand will add three new Kellogg’s cereal flavors to their drink lineup, including Froot Loops, Frosted Flakes, and Krave.

Shopping in 2021

With 2021 here and everyone looking toward a future without Covid-19, IRI has predicted that shopping habits will likely look different compared to last year. With vaccination of the population underway, year-over-year reports are likely to show declines in many categories as they fail to keep up with the stockpiling frenzy that was seen at the same time last year. Products that were particularly popular with consumers are especially going to be affected by the change, including canned soup and shelf-stable pantry items, which they’ve reported could fall by as much as 20%. Meanwhile, for categories that fell out of favor with shoppers during lockdown, like face makeup, bottled water, and candy, the data company has found that these negative effects will wane as the year goes on and life returns to normal. 

With a swift adoption of ecommerce by brands and consumers alike in 2020, it’s expected that online shopping will remain part of shoppers’ experiences, with the potential for growth in the first half the year regardless of vaccine rollout. Despite this, IRI recommends that brands have physical products available in brick-and-mortar stores as well, since a resurgence of people leaving their homes will mean a recovery for physical shopping. Additionally, while brands should prepare for a continuation of smaller holiday celebrations through at least the first six months of 2021, other food trends like prepared meals and innovative flavors will be sought after by shoppers. 

Follow the Data

PepsiCo is looking to enhance its data-driven demand accelerator DX, a platform that uses analytics to identify its most valuable customers and use that insight to tailor marketing efforts. The company is now seeking to extend the platform’s reach to nourish its category growth efforts, which would allow it to identify the best capabilities to solve problems and provide market visibility. “The vision is we're going to get to this flywheel effect across the world where we have the best capabilities fully democratized, across all markets, which allow us to accelerate as much growth as we can for our categories in all of those markets,” says PepsiCo VP and Head of DX, Jeff Swearingen. “But also more consistently deliver against the needs and the desires of consumers.”

The information would also help predict demand and consumer behaviors, a capability that has become invaluable over the last year as many brands faced challenges due to unpredictable supply chain events. Through DX's interactions with customers, those insights can inform company actions and allow PepsiCo to create a shopping experience that aligns with what consumers are looking for. “Most of those puzzle pieces, if not all of them, are on the table today,” Swearingen says. “It’s a matter of just assembling the puzzle, and I think when we do that, we create a much richer experience for consumers, and a much more fulfilling experience for consumers.”

Delivering CPG

UPS has said it expects continued elevated demand for its services, which the company will not have the capacity to meet for the foreseeable future. The delivery giant saw a 2020 Q4 increase of 10% in daily volume of packages, while its revenue per piece was up 11.2% year-over-year, driven largely by a holiday season fueled by online shopping. The courier noted that it saw the most growth in its customers with small- to medium-sized businesses, with revenue up 17% year-over-year and volume up 29% year-over-year. As demand remains strong, the company has said it will move to more personalized pricing, although exactly what that entails has not yet been announced. Although its capacity remains limited, the company has made expansions this year, retrofitting facilities to be able to move more packages per hour and adding 11 aircrafts to its fleet.

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