• 👀 Walgreens' New Private Label Offerings
• ⏸️ Kroger/Albertsons Notch Small Win Against FTC
• 🥤 Pepsi CMO Moves To Kraft Heinz
• 🛍️ Whole Foods Sells its Extras
• 🦃 Making A Run For Regen Turkey

A combination of rising ingredient prices, raw material shortages and downsized product portfolios has left creativity in short supply for many CPG companies. According to a new Mintel report, only 35% of global CPG launches spanning the food, drink, household, health and beauty industries in 2024 have been genuinely new products – the lowest rate of innovation since Mintel began tracking new products in 1996. 

The global downturn in CPG innovation is most prominent in North and Latin America. In the U.S., only 25% of CPG launches were new products in the first five months of 2024, compared to the global average of 35%. 

What’s more? Food and beverage has seen the greatest innovation decline of all CPG sectors, accounting for only 26% of new products across all CPG innovation between January and May 2024 versus 50% in 2007. Per the report, F&B companies are favoring a renovation approach – like reformulations, new varieties, range extensions and new packaging – to offer consumers new, yet familiar, choices.

In the past few months alone we’ve seen an influx of brand refreshes from Lexington Bakes, Barritt’s Ginger Beer and MOSH as well as line extensions from Kooshy, Laoban, PLEZi and more. 

There’s some good news for smaller brands: Bigger no longer equals better. A lack of R&D investment from large brands after the 2008 financial crisis created an environment in which startups like OLIPOP tapped into the rise of digital technology and gained a foothold in their categories. According to NielsenIQ data, 45% of growth in CPG between 2016 and 2020 was driven by small- and medium-sized brands, while private label captured 30%. 

“As the digital transformation of CPG gathers pace, the old adage ‘innovate or die’ will never be truer, especially given that big brands have been growing more slowly than challenger brands and private-label. If big players fail to innovate more, this trend will dramatically increase as we enter the late 2020s,” the report reads. 

Should Big CPG make an innovation comeback, it will face two key hurdles: artificial intelligence (AI) and private-label brands. Here’s the lowdown:

• The rapid emergence of AI and ecommerce has lowered the barriers to entry for emerging brands, allowing them to build brand equity and sales online before shifting into brick-and-mortar retail. Also, tech advancements have cut year’s long innovation cycles down to just months.
• Continued inflation has supported a switch to private-label alternatives (see: recent private label refreshes from Walmart and CVS). In May, 31% of U.S. adults said they purchased more store brands over the past two months. 

Without genuine innovation, will consumers automatically return to big brands once they feel more financially secure? According to Mintel, unless the current innovation drought is reversed, the future profitability of, and potentially the survival of, established CPG industry players remain at risk.  

Go Deeper: Listen to this episode of CPG Week to learn about the latest private label trends. 

Walgreens is the latest retailer to revamp its private label offerings with the introduction of Nice! For You, a new tier of better-for-you food and beverage products.

🍿 The Nice! For You line includes over 150 items spanning snacks, coffee, beverage, frozen food, baking staples and more that are free from artificial flavors, artificial sweeteners, synthetic dyes and high-fructose corn syrup, with many organic and gluten-free options.

👏 Walgreens’ Nice! store brand debuted in 2011 and features more than 300 products. With this latest evolution, the pharmacy and healthcare provider joins Walmart, CVS and others that have overhauled their private label programs in recent months.

Go Deeper: Walmart Doubles Down On Private Label

Former Pepsi CMO Todd Kaplan has moved on to another major player, announcing via LinkedIn this week he is now serving as CMO of Kraft Heinz North America. 

🪜 Kaplan has served on Pepsi’s marketing team for over 17 years, moving up the ranks where he began as an assistant marketing manager; he has served as the company’s CMO for the past two and a half years. 

🤝 In his new role, Kaplan will work across all Kraft Heinz food and beverage brands; additionally, he will oversee the company’s joint ventures with NotCo and Just Spices. 

🗣️ What he said: “I look forward to leading the team to unleash the potential of these incredible brands through elevated creativity, a deeper connection to culture, and best in class marketing, media, and digital capabilities that can fuel the company’s next wave of growth.” 

In other people move news: Former Tacombi president and COO Johnny Hill announced via LinkedIn this week he has joined Cha Cha Matcha as CEO. 

The FTC’s case against Kroger and Albertsons’ proposed mega-merger has been put on a momentary pause while the grocery giants fight it out in other courtrooms around the country. 

🧑‍⚖️ The companies requested the delay last week, which has been “granted in part,” meaning the case will resume after a hearing for a preliminary injunction against the deal wraps on September 13 in an Oregon federal court. 

📆 The evidentiary hearing, scheduled for July 31, will still be held despite K + A’s push for a delay; further proceedings will be recessed until after the two grocery giant’s clear their docket of other, merger-related hearings scheduled throughout the summer.

💻 The July 31 proceedings will be held via video conference as requested by both parties and will be accessible to the public. 

In its latest effort to reduce food waste, Whole Foods Market has partnered with surplus food market app Too Good To Go, placing “Surprise Bags” of surplus items from its stores for sale on the app.

❓ The Surprise Bags will utilize excess items from over 450 Whole Foods stores and come in themes, like Prepared Foods with soups and ready-to-eat meals ($9.99 each) and Bakery ($6.99).

🟢 "As part of our purpose to nourish people and the planet, we continue to invest in new and innovative ways to keep unsold food out of our landfills and empower our customers to make environmentally conscious choices,” said Whole Foods VP of sustainability Caitlin Leibert in a release.”

Diestel Family Ranch announced this week it is now selling the first Certified Regenified turkey products. 

🌱 The U.S.-based sustainably raised turkey supplier has met Regenified's 6-3-4 Standards, which include monitoring soil health, adaptive stewardship, and ecosystem processes. 

🌽As part of the certification process, the company sourced 650 tons of Certified Regenified corn earlier this spring for turkey feed.

🗣️ What they said: "Every aspect of being a farmer impacts the world around us, and feed is a critical part of raising poultry. If we ignore the animals' feed sources, then we can't solve for the future. Addressing how the feed is being grown will bring the entire system closer to a regenerative state that supports the future of farming and our planet.” - Heidi Diestel, fourth-generation farmer