Christine Mei

What do grocery data (how, when, and what you buy) and traditional credit scores have in common?  According to research by Professor Eric Anderson and his colleagues at Northwestern University - Kellogg School of Management, they both effectively predict how consistently you’ll pay off your credit card bills, making it an interesting alternative for lenders to gauge the creditworthiness of applicants who have no credit score. This could bring new customers to banks and improve access to credit for the 26 million in the US (and more than a billion globally) who are “unbanked.” Some findings: - People with consistent supermarket behaviors tend to pay their credit cards on time: They shop at regular times of the day and weekdays. They make repeat purchases. They spend about the same amount of money each time and look for bargains. Even controlling for credit scores, income, and socio-demographic factors, there was a correlation between grocery habits and credit risk. - It’s not just about how you shop but what you buy: Cigarette purchases are a big predictor someone will default (i.e., miss two consecutive credit card payments), as are those of highly processed foods and energy drinks. “The single greatest indicator of a non-defaulter. . . was spending a significant amount on vinegar salad dressing,” as well as ingredients that suggest healthier eating and home cooking, such as milk, flour, beans, and fresh produce. - Grocery data is most effective in determining the creditworthiness of credit card applicants who don’t yet have credit scores, but less effective in incrementally assessing those who already do. Similarly, the data is most helpful at predicting whether someone will default soon after they get a credit card; less useful once they begin to build a credit score. “‘That’s the world we’re heading towards, which is your data is going to be cutting across lots of different domains and being used in ways you may not have thought before,’ Anderson says.” On the one hand, it could provide access to a loan in the case of an emergency to those who might not otherwise be able to get one, and it can help lenders anticipate a default and intervene in advance, which is better for everyone. “Still, . . . the idea that the choices you make while filling up your grocery cart could impact other parts of your life in ways you don’t understand, or consent to, may sit uneasily with many.” #credit #data #shopping #shoppers #consistency #habits #creditrisk #supermarket #insights

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🚀 Mars-Kellanova Deal: A Game-Changer in the Global Snacking Industry Mars $36 billion acquisition of Kellanova is a bold move aimed at diversifying its product offerings and expanding into the rapidly growing savory snacks market. With Kellanova’s iconic brands like Pringles, Cheez-It, and Pop-Tarts, Mars is set to complement its existing portfolio and position itself as a leader in the global snacking category. This acquisition adds approximately $13 billion in annual sales from Kellanova, increasing Mars' total revenue to over $63 billion annually. 🔗 Key Highlights Brand Synergy: The combined portfolios create a snacking powerhouse, opening up opportunities for cross-promotion and innovation. Cultural Alignment: Both companies share a strong values-based leadership approach, ensuring a smooth integration process. Regulatory Screening: The deal is expected to withstand regulatory scrutiny, with analysts noting that while large, the acquisition should not raise significant antitrust concerns due to the complementary nature of the companies' product lines​. Financial Commitment: The deal’s valuation includes a premium of 44% over Kellanova’s 30-day trading average, reflecting Mars' confidence in long-term growth, despite the high investment​ 💪 Biggest Strengths Mars: Mars’ biggest strength lies in its proven brand-building capabilities and its leadership in the global confectionery market. With a 13.3% share of the global confectionery market, Mars has consistently demonstrated its ability to grow and sustain brands through strategic innovation and marketing. Kellanova: Kellanova’s strength is its diverse and globally recognized snacking portfolio, which includes some of the most beloved snack brands in the world. The company operates in 21 countries and markets its products in over 180 countries, giving it a vast global footprint​. ⚠️ Top Challenges Achieving Financial Returns: Mars will need to drive significant growth and cost synergies to justify the high acquisition price (16.4x of Kellanova’s last twelve months (LTM) adjusted EBITDA) Innovation Pressure: Refreshing Kellanova’s mature brands to meet evolving consumer preferences will be crucial. Navigating Market Dynamics: The competitive snacking industry requires Mars to stay agile and responsive to market changes. 👥 Consumer Impact Consumers can expect an expanded range of snacking options, improved global availability of Kellanova’s brands, and a stronger focus on “better-for-you” products and sustainability initiatives. This landmark deal sets a new precedent in the snacking industry, signaling a shift towards greater consolidation and the continued importance of innovation in driving growth. It’s a pivotal moment that will likely influence the future of snacking on a global scale. #Mars #Kellanova #Acquisition #BusinessStrategy #SnackingIndustry #ConsumerGoods #Innovation #Sustainability #Regulation #Strength Peak North

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INCREMENTALISM VERSUS FRESH THINKING While still a relative newcomer to PepsiCo in the early 90’s, the late Roger Enrico, former CEO of PepsiCo, coined the term ‘the tyranny of incrementalism’, stating that ‘real change will never come about if we first don’t free ourselves from the belief that somehow dramatic results will come about from un-dramatic actions’. Following that declaration, the organization made sweeping changes that brought about astounding growth over the following decade…more specifically at Frito Lay, where the org was delayered in favour of frontline-based decision making, with savings invested vigourously in product quality and brand marketing. The challenge today is that governments, businesses, and the general public, get too vested in past methods that may have worked well at one time (look at the many dated laws and tax schemes). Think about the public fervour that stemmed from unfamiliar paths such as free trade, the management of COVID, or emerging trends such as Ozempic use, carbon reduction goals (ESG) or the soon-to-be, cashless society. With change as an accelerating constant, there has never been a more critical time for fresh thinking. In the CPG world, we’ve witnessed a massive change in how consumers engage with brands (or not), as the demand for something that’s ‘for me’ has stolen the growth prospects from traditional brands and categories. The old playbook ain’t working anymore. In CPG, the vicious battle for the last 20 years has been for share of the profit pool between retailers and manufacturers. Rather than figuring out how to sell more (eg- innovation in products and processes), it’s about buying better, which has led to a profit blood-letting for suppliers in Canada. Now most of the Canadian divisions of multinationals are largely a stripped-down version of what they once were, robbed of whatever creative or local decision-making that existed previously. The ‘code of conduct’ is a good start, but it took a lot of will and hard work to get it to the alignment stage. Execution will be the true test of its success. Without proper research and insight, just being bold would be a fool’s game. However, even with a well-staged change plan, it still requires a high level of risk, all while suffering the pain of detractors, both internal and external. After all, who wants to risk losing their job? Politicians understand that one better than any. The brief attachment discusses the challenge of risk/reward and the role 'psychological safety' plays in the change process. Hope you're enjoying these early days of summer!

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Molson Coors is divesting its four craft beer brands and shutting down its own craft label as the brewing behemoth exits an industry it once longed to access. The whiplash further signals that big beer makers are no longer enamored with craft brands as that slice of the market posts negative growth for the first time in its history. Molson Coors announced Tuesday the sale of its craft beer portfolio — Hop Valley in Oregon, Terrapin in Georgia, Revolver in Texas and Atwater in Michigan — to Tilray, a Canadian company with interests in cannabis and beer. In addition, Molson Coors announced it would shut down its Colorado-based, in-house craft brand AC Golden at the end of September, according to a memo obtained by Axios. Molson Coors chief commercial officer Michelle St. Jacques said the moves allow the company to focus on its premium national brands, Blue Moon and Leinenkugel, as well as non-beer alcoholic beverages, such as seltzers and hard cocktails. "As we map our path forward, we recognize we need to sharpen our focus on the segments where we see the greatest opportunity for our collective businesses," she wrote in the memo to wholesalers. Global beer makers like Coors and Anheuser-Busch rushed to acquire craft beer brands at the height of their boom a decade ago, but fortunes have shifted. The overall beer industry sank 5% in production volume in 2023, but saw retail sales increase 3%. Meanwhile, craft beer production decreased 1% — its worst number since the industry came into view in the 1970s. AB InBev divested eight craft brands, including Breckenridge, 10 Barrel and Shock Top breweries, to Tilray last August. Constellation Brands sold its craft breweries — including the billion-dollar Ballast Point — in recent years. Tilray's two acquisitions from big beer makers now positions the company as one of the five largest craft brewers in the U.S. "Tilray Brands plans to continue to invest in the future of these craft breweries, accelerating their growth and capturing a wide range of new market opportunities," Irwin D. Simon, Tilray's CEO and chairman said in a statement. "Tilray Brands is a beacon for craft brands, and we are committed to driving their growth and success within our portfolio." To earn the "craft beer" seal, it must meet the definition of small and independently owned, set by the industry's trade group, the Colorado-based Brewers Association. Now that Tilray is the owner, all four of its new brands will qualify as craft — a symbolic but significant indicator to consumers.

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Grocery CEOs who want to build a legacy of leadership should seriously consider the education programs from the Western Association of Food Chains. New research has proved their power in retaining high-potential associates – but the real impact of the programs extends far beyond the P&L. #grocery #retail #education #talent #development #retention #culture #leadership

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One thing people underestimate about the Food & Beverage industry is how consumer trends have a DIRECT impact on M&A trends. IFT First in Chicago is one of the most important food shows I have attended that brought some of these trends to the forefront, bringing together thousands of exhibitors to showcase the latest innovations, technologies, new products, and ingredients in the food and beverage industry. Here are some key trends from this year's event that will have a direct impact on the M&A market: Ultra-processed Foods: Confusion around minimally processed, processed, and ultra-processed foods persists. Companies like Chobani are working to educate consumers and reduce stigma, a crucial effort for market acceptance. As strategic buyers look to become more acquisitive, they add a diligence stream regarding how their potential target's products are processed and whether they can substantiate their marketing/packaging claims. Health Benefits: Products emphasizing higher protein, sugar reduction, and clean labels are in demand, reflecting consumer priorities for long-lasting health benefits. Companies that continue to play in the more indulgent sectors will need to focus on ingredient quality and transparency to sustain growth. Alternate Sweeteners: As consumers seek to reduce sugar without sacrificing taste, innovation in alternate sweeteners is vital. Companies that can provide great-tasting products with low-sugar alternatives that consumers can trust will be in demand in the future. At Greenwich Capital Group LLC, we closely monitor these trends and ensure our clients and potential clients understand how to position their company before a sale. Companies ignoring these shifts risk negative perceptions in M&A processes, potentially impacting their salability and value by not aligning with consumer preferences. #IFT2024 #FoodInnovation #IngredientTrends #HealthyEating #FoodTech #MandA https://lnkd.in/gzcfRxkF

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The spicy food revolution is here, and the younger generations are leading the charge: Research shows that 47% of #GenZ and 45% of #millennials prefer moderately spicy or very spicy options.    Have you ever tried a Flamin’ Hot product in two different regions? You might have tasted two different spice mixtures – because even though love for spice is up worldwide, we adjust the spice level of our foods market-by-market based on consumer preference. The way I see it, the broadened popularity of spicy foods is a response to our world being more connected than ever. It’s an area ripe for growth and innovation, something we’re excited to lean into at PepsiCo! We’ll continue to grow to meet people where they’re at – and predict what’s coming next.    Read this breakdown of the growth in the spicy section of American supermarkets:

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Why do some legacy brands— survive and some do not? Professors at The Wharton School look at why for some brands—Sears, Toys"R"Us—nostalgia is not enough to ensure survival, and how others—Apple, Nike—have stayed relevant without betraying what they stand for. - Sears was once a retailer where you could get pretty much anything, and even some brands you couldn’t get anywhere else. But retail changes and Sears became a “store that lacked any sort of distinction, and the legacy part of its story just wasn’t enough.” Kohl's, on the other hand, builds on its past success but adapts as customer needs change. They have maintained large stores in non-mall locations for easier accessibility, but they renovate, inside and out, more often than other, similar retailers, and have developed their own store brands valued by customers. - Customers now look to retailers to be curators who have vetted what goes on shelf on their behalf. Costco Wholesale is an example of a retailer trusted by customers for the quality of their products and that has developed a strong store brand that is recognized as not always the least expensive brand in the store but one that the store stands behind. Nike, Apple, and Patagonia are all brands that have stayed true to the brand values, identity and emotional connection to the consumer, but who have stayed current by keeping their products cutting edge. Barbie, aside from the huge boost afforded by the movie, has evolved as the world has, introducing inspirational likenesses of ABT dancer Misty Copeland, NASA mathematician Katherine Johnson, artist Frida Kahlo and others, and making Barbie more inclusive of body types, skin tones, and abilities. - Gillette, on the other hand, was blindsided by Dollar Shave Club and Harry's Inc., which undercut Gillette’s prices and went directly to the consumer with a story and a subscription model, breaking consumers’ habit of going to a store for razors. Gillette has since launched its own subscription service, but not before losing market share that will be difficult to gain back. Johnson's baby , used by generations of parents for its promise of “no more tears,” saw sales fall as consumers became wary of its additives, a trend that J&J missed because it wasn’t monitoring consumer chat or sales online. Campbell's soup, despite being iconic, has had a hard time capturing younger consumers who don’t have the same warm memories of the brand and are skeptical of anything that comes out of a can. - Legacy brands are now up against with a wider competitive landscape; retailers who were once a big deal are now one of many physical and online stores, and the amount and accessibility of information about them is nearly inexhaustible. Not only can you find out what is offered elsewhere but there are reviews on everything from pricing to experience to the company’s politics and ethical policies. #nostalgia #brand #branding #retail #customer #consumer

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Explore the rise of boba tea in an article by Rex Huang. Read the article to hear Rex's take on future trends, from health-conscious options to sustainable practices. It's clear that boba is here to stay as a beverage industry staple.

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Julie Jargon for The Wall Street Journal reports on the detrimental effects of energy drinks on young people. According to the CDC, over 50% of American teens consume energy drinks. Despite having a substantially higher average caffeine content than other caffeinated beverages, energy drinks are mostly unregulated - and their caffeine content often goes unlabeled. This is yet another example of regulatory agencies foregoing the regulation of dangerous products to instead focus on the intensive regulation of products with long track records of user safety and benefits. My opinion: energy drinks are not supplements and should not be regulated as such. I hope this changes soon. In the meantime, if you have a teen who is consuming multiple energy drinks a day, help them sub those out for a safer alternative (such as a cup of Rarebird, Inc. Px Coffee or MUD\WTR). #PxCoffee Jeffrey Dietrich Shane Heath https://lnkd.in/e8jJgMi3

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Reflecting on this monumental moment, I wanted to wait until the news was "official" before sharing my thoughts and feelings... Almost 7 years ago, a good friend now who started as a good client invited me to his new office in NJ to explore a plant-based protein company he was considering acquiring. That's when I first encountered OWYN. Honestly, I wasn't sure what to make of it initially. Plant-based, vegan protein drinks weren't in my usual "repertoire" of ideation and marketing. But after trying the product that day, I knew I wanted to be part of the journey. And what an incredible journey it has been! Throughout the last 7 years, in my capacity as a "strategic advisor," I've embraced a multitude of roles and responsibilities, working closely with a diverse array of talented leaders. From individuals who made significant contributions from the outset and have since moved on, to those who have ascended to leadership positions, such as CEO Mark O. and Chief Sales Officer Matt OConnell, as well as "more recent" additions like CMO Julia Perez, who came in and made an immediate and substantial impact, our collaboration has been characterized by passion, mutual respect, and an unwavering commitment to innovation. Now, fast forward to today. After countless hours of strategic discussions, meetings, and partnerships, we've achieved something remarkable. We've taken a niche brand, crafted with the finest ingredients, and found the perfect successor in our recent acquisition. If you notice, even as a "consultant" I always will refer to it as we. When I work with brands, especially from day 1, I consider myself a true part of the team. Being part of a brand from inception to this pivotal moment is incredibly special. As a matter of fact, it's been a huge goal of mine since that fateful day 7 years ago. I'm eager to see what lies ahead for OWYN and hopeful that I can continue contributing to a product and brand that means so much to me and countless others, especially our consumers. #OWYN #PlantBased #Acquisition #Journey #Gratitude #Business #CPG #SimplyGood https://lnkd.in/emY6UT2g

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Great time with Elanie and Kay from the Renegade Nutrition Podcast! Their content is always so timely related to changes in the science of nutrition, it's impact on our wellness, and how we can all be better at 'biohacking'. We discussed the importance of polyphenols in the diet for longevity, data from blue zones, and Goode Health. Give it a listen (if you have an hour or listen at 1.75x speed) and follow Renegade!

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The Ready-to-Drink (RTD) alcohol market is witnessing explosive growth, fueled by a shift in consumer preferences towards convenience and premiumization. Modern consumers, particularly millennials and Gen Z, are embracing these easy-to-serve options that offer quality and variety without the need for bartending skills. The surge is also supported by innovative flavors and healthier choices, such as low-calorie and organic options.

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This would be another big M&A development in the food space if true. These two companies were in similar discussions eight years ago, which obviously concluded without a deal.  That prior deal fell apart presumably because the two sides could not agree on a price – HSY rejected a $23B bid and MDLZ walked away. So, what has changed to trigger a reopening of this discussion?  I can think of many possibilities, including the general struggle to find growth among all food companies and the margin and performance challenges specifically at HSY in recent months.  But the most obvious answer is another mega-deal in the food space: Mars-Kellanova.  Mars and Mondelez have long had a significant competitive overlap in global confectionary, but Mondelez is more tilted to snacking and Mars more tilted to confectionary in their historical portfolios.  Mars has changed that, assuming their Kellanova deal goes through.  With one move they will now be in much more direct competition with Mondelez across a much larger share of the global portfolio. Under the circumstances, a Hershey acquisition feels like a direct countermove by Mondelez. Ironically, I was speaking with some Mars friends about a month ago.  They asked how I thought other food companies might react to their impending acquisition of Kellanova.  I said, I have no idea, and I wouldn’t invest too much time and effort into the game theory possibilities.  Ultimately, everybody has to play their own game and control what they can control – worrying about hypotheticals can easily become a distraction. Hindsight is always 20/20, but I can’t help thinking this is a higher probability move I might have foreseen.  Like all M&A rumors though, we’ll see if it actually happens.  And if it does, my advice to Mars (and anyone else) still stands – control what you can control and focus on your own execution.  Even the biggest strategic moves mean nothing without executional follow-through. https://lnkd.in/g8ihHuDD

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💡 The Power Players of U.S. Retail! Take a look at this fascinating chart showcasing the top U.S. retail companies by market capitalization as of September 2024. 📊 From Chipotle Mexican Grill at $78.96B to the retail titan Amazon leading the pack at a staggering $1.957T, this ranking reveals the diverse strengths of companies across industries like e-commerce, fast food, coffee, and home improvement. A few things to consider: 🔹 What strategies have helped Walmart and Costco Wholesale sustain their massive scale in traditional retail? 🔹 How do brands like Nike and Starbucks continue to thrive in fiercely competitive niches? 🔹 With Amazon's dominance, what opportunities exist for smaller players to carve out their niche? What trends do you see shaping the future of this list? Let me know in the comments! 👇 Source: Retaildogma #RetailIndustry #MarketTrends #ConsumerBehavior #RetailStrategy

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Are consumers snacking less? PepsiCo released Q3 earnings this morning and lowered revenue guidance for the year.  Frito-Lay North America volume was down 1.5% for the quarter and down 2% FYTD.  The company noted consumer budgets are still stressed, resulting in more switching to private label and less convenience store purchasing. Normally, I would conclude people are snacking less on Frito-Lay, not necessarily that they are snacking less overall.  But two other recent quarterly reports have me wondering.  Both General Mills and McCormick reported a benefit from more in-home meal occasions during the quarter. For context, the shift in food consumption from at-home to out-of-home is a trend going back to the 1970s.  In the early 70s, the split was roughly 80% at-home and 20% away-from-home (in dollars).  At the same time, the share of eating occasions has steadily shifted away from the traditional three meals a day (breakfast, lunch and dinner) to unstructured between-meal or meal-substitute snacking.  By about 2010, the at-home away-from-home split was 50/50 and the snack vs. traditional meal occasions was also split 50/50 (occasions, not dollars). These are separate trends, but they are related. If people are eating more meals (vs. snacks) and doing so more at home (vs. a restaurant) that is an overlapping reversal of two long-term trends. If you run a business in the meals or snacking space, I am sure you are looking into it.  But if it is a reversal, it is almost certainly temporary because these trends are rooted in fundamental societal shifts that aren’t reversing – and the causes, like inflation, the pandemic, job insecurity or geopolitical supply chain disruptions, are temporary. Whether consumers are snacking less overall, or just on Frito-Lay brands, this is just a bit of noise in an otherwise still very strong signal – but sometimes noise requires attention and that seems to be the case at PepsiCo now. https://lnkd.in/g_FRTdja

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Doesn’t it seem every beverage category is in the early innings of a remarkable transformation? Even the largest (most sacred) packaged beverage categories are no longer safe…as carbonated soft drinks ($110B U.S. market) has been declining in volume for much of the last decade. It's my belief that consumers are moving closer towards this four-way intersection of taste, convenience, nutrition, and functionality. And functional sodas, that often have a focus on adding prebiotics, plant fiber, or botanicals to support gut health...fit right squarely in the middle of that, as the beverage category has been outpacing all others in growth over the last few years. What has always made this emerging category so intriguing to me stems from the fact that consumers can make a healthier choice without really changing a lot of their typical behavior. That’s a slam dunk in my world, but this story isn’t only being told by functional soda brands like OLIPOP PBC and poppi. In fact, I believe I’ve found the hidden gem of the entire category! In the episode, I chat with the co-founders of Mayawell about: ▪️ divine intervention behind them meeting and the inspiration behind Mayawell ▪️ product composition and why that differentiation is an important foundational brand pillar ▪️ early ups and downs that startups face when operating within nascent beverage categories ▪️ why marketplace maturity sometimes provides the clarity needed to make bold branding adjustments that bring the entire strategic narrative to life ▪️ breakdown the functional (prebiotic) soda categorical evolution ▪️ plus much more! #strategy #trends #markets #fmcg #cpg #beverages #guthealth #prebiotics #soda #sportsnutrition #supplements #hydration #water #vitamins #wellness #nutrition #health #innovation #marketing #branding #productdevelopment #retailing #merchandising #retail #grocery #business #businessintelligence #entrepreneurship Vicente REYES Oliver S. https://lnkd.in/eXZZydHy

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“How to build businesses that last.” Check out my book, Manufacturing Mastery: The Path to Building Successful and Enduring Manufacturing Businesses Amazon or Routledge - the publisher. Lessons in capitalism from Whole Foods and Trader Joe’s https://lnkd.in/ea8YQNWC from The Economist

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