CAGNY 2021: CPG Companies Talk Sustainability Commitments, Plant-Based Innovation

At the annual Consumer Analyst Group of New York (CAGNY) conference, held virtually this year, many leading CPG companies discussed navigating the pandemic in 2020 and laid out their plans and strategies for 2021. Several companies previewed new innovations, particularly in the plant-based meat space, while others highlighted progress against their sustainability goals as well as unveiled new climate-friendly ventures.

Mondelēz

Mondelēz CEO Dirk Van de Put highlighted the company’s approach to innovation in snacking during its presentation, with a focus on “brands with purpose, with sharp growth strategies.” The company’s new strategies include executing on fewer projects with a greater focus on core renovation, bringing products to market more quickly and nurturing brands with on-trend products through its SnackFutures hub.

Van de Put also outlined the company’s “deliberate and intentional” approach to sustainability. He announced the company’s new impact investing platform, Sustainable Futures, which will incubate and finance ventures with social and environmental impact both through co-investments to address climate change and seed investments to support social ventures. Its first social venture will support an NGO in India that will establish a woman-owned enterprise for upcycling plastic packaging.

“We don’t have all the answers, but we do know that alone, we can never achieve significant progress in the fight against systemic issues like climate change,” Van de Put said. “Sustainable Futures is our first foray into impact investing and gives us the opportunity to work with others in supporting environmental and social projects that can help drive meaningful, long-term change.”

The company will also look to increase its better-for-you snack offerings, both through innovations in its core portfolio of brands, like gluten-free Oreos, as well as strategic acquisitions like Hu, which Van de Put said the company intends to scale to grow its presence in the premium chocolate category. He also said the company aims to continue increasing its foothold in the snack bars segment with Perfect Snacks by rapidly growing distribution.

Mondelez CFO Luca Zaramella said the company will also simplify its portfolio in 2021, by removing 25% of its SKUs and focusing on the “highest value, most disruptive innovation.” The company will also focus on building out its ecommerce business by optimizing its product assortment and availability, he said.

General Mills

As the company continues to reshape its portfolio through M&A, General Mills’ primary acquisition focus will be bolt-on deals within its core markets that build on its platforms and capabilities, chairman and CEO Jeff Harmening said. The company will also look to divest brands that comprise fewer than 5% of company sales.

General Mills aims to grow through brand building and remaining relevant with consumers, which will include “relentless innovation,” Harmening said. To accelerate this innovation, the company has shortened the gap from idea conception to first consumer transaction from months to weeks. This innovation will also be driven through its internal start-up accelerator G-Works, as well as its 301 Inc. Investment Arm.

On the sustainability front, General Mills this week rolled out Nature Valley bars made with a plastic film wrapper, which can be recycled to create new products like synthetic lumber and decking equipment. The wrapper, which does not affect the product’s freshness or shelf-life, can be recycled at designated Store Drop-Off recyclable locations. This innovation is part of the brand’s commitment to achieve 100% recyclable packaging by 2025 across its entire portfolio of snacks.

CMO Ivan Pollard said the company will look to increase its ecommerce media investment in 2021 while keeping a strong presence on television. The company will aim to drive growth in its marketing efforts by “leveraging cultural capital for good” by featuring influencers and their causes on packaging and campaigns, like previous campaigns with athletes Serena Williams and Lebron James.

Kellogg’s

In its presentation, Kellogg’s Chief Growth Officer Monica McGurk said the company worked to grow its ecommerce presence in 2020 through targeted consumer campaigns as well as engagement through social media platforms like TikTok. This ultimately doubled its ecommerce business, which accounted for 8.5% of global retail sales in 2020. The company optimized ecommerce search through a pilot program with Bear Naked Granola, leading to higher customer acquisition online and driving 112% sales growth year-over-year for the brand.

The company has also improved its innovation capabilities and pipeline with new labs and pilot facilities, and Nigel Hughes, SVP of Global R&D and Innovation, said the company will look to innovate in three areas in 2021: simple enjoyment (cereal, salty snacks), well-being (better-for-you) and plant-based innovation through Morningstar Farms. Its well-being offerings will continue to focus on keto-friendly, plant-based and no added sugar products, as well as those that support digestive health. This year, the company plans to launch several new innovations from MorningStar Farms and its subline, Incogmeato, including Veggie Meatballs and Bites and new Incogmeato Chik’n Nuggets and Bites.

Chief Sustainability Officer Amy Senter offered an update on the company’s sustainability goals, reporting that the company exceeded its 2020 carbon emission reduction target, cutting these emissions 25% since 2015. She also said the company will reach 50% renewable electricity in its manufacturing by 2022. Kellogg’s plans to double down on plant-based growth (86% of its products are plant-based currently), as well as launch recycle-ready packaging for products like cereal.

“As we emerge from this pandemic, we know that being a company with a strong purpose and strong performance is key to balance growth that will benefit our shareholders, employees, community and the planet,” she said.

Nestlé

Following the company’s third consecutive year of improved growth and margins in 2020, Nestle’s presentation focused largely on its sustainability efforts, which EVP and CFO Francois-Xavier Roger said is “integral to the company’s long-term success.”

In 2019, the company pledged to reach net zero greenhouse gas emissions by 2050, and Roger said the company expects to reach a 20% reduction in emissions by 2025. Nestlé is investing in sustainability through supporting regenerative agriculture, adjusting its operations and supporting sustainable packaging, using recycled and compostable materials.

Laurent Freixe, EVP and head of Zone Americas at Nestle, said Nestlé is focused on investing in growth in 2021, which includes driving consumer engagement by building carbon neutral brands and communicating responsibly sourced ingredients, as well as driving product innovation by expanding plant-based offerings.

Roger said the company sees opportunities for products with low carbon emissions such as plant-based brands like Garden Gourmet and Sweet Earth, and has 10% of its R&D employees working on developing new plant-based products. In addition to expanding plant-based offerings, the company will focus on driving new business models through partnerships with companies like reusable CPG packaging platform Loop, which Nestle invested in last year.

ConAgra

In its presentation, ConAgra president and CEO Sean Connolly discussed the impact of the pandemic on its sales in 2020 and how changing consumer habits has informed the company’s 2021 innovation pipeline.

The COVID-19 pandemic accelerated ConAgra’s performance across frozen, snacks and staples, with retail sales across these categories experiencing double digit year-over-year growth in 2020. It also “supercharged” new trial and new buyer acquisition, as Connolly said the brand gained 4.5 years’ worth of new buyers, most of whom are millennial and Gen Z consumers, within a year. The company plans to capitalize on the trends that have emerged amid the pandemic, including at-home cooking, increase in frozen food purchases, at-home entertainment and snacking with products that meet these eating occasions.

The company also announced new innovations slated to launch in the next few months. The Gardein line will expand with Chick’n Filets and Nuggets, Falafel Burger and plant-based Chili.

The company will also roll out more keto-friendly offerings for brands like Healthy Choice and Duncan Hines. To capitalize on the rise in at-home cooking, Bird’s Eye will roll out frozen Sheet Pan Meals and Veggies & Sauce Stir-Fry meals. Experiential and seasonal flavors will also launch across several brands in its portfolio, including Salted Maple and Apple Cider Donut Boom Chicka Pop varieties. The company is also currently developing sustainable packaging for several products in its portfolio, including plant-based fiber bowls for its Healthy Choice brand, set for a broader rollout in 2022.