Jane Ewing

CPG industry trends in 2024: Rescuing the decade | McKinsey Megatrends impacting CPG - the highlights of which we know but - but how to deal with them is the question - interesting overview: 1) Population growth stagnation - target, focus and personalization - profitable growth pockets M&A&D work with entities that can identify the sting in the tail of too large portfolios and identify new opps - predictive AI to help generate those insights. Reinventing brand building and marketing, scaling commercial excellence across business. 2)Crop failures increasingly frequent - volatility mitigation supply chain is key. This multi-enterprise ecosystem at its core must be collaborative, connected, responsive, and innovation centric, most importantly sustainable in this green century 3)Better for you better for the planet - how we embrace and recognize the natural world and its biomass is good for the planet and good for you. 4) Prescription weight loss drugs coming - lifestyle change and healthier nutritional choices exist - an option play but not the norm.

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𝗔𝗻𝗱 𝗶𝘁 𝗶𝘀 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 𝘁𝗵𝗲 𝘀𝘁𝗮𝗿𝘁 𝗼𝗳 𝘁𝗵𝗲 𝗤𝟮 𝗲𝗮𝗿𝗻𝗶𝗻𝗴s 𝘀𝗲𝗮𝘀𝗼𝗻 We start where we left it in Q1: with a top-line miss & a bottom-line beat, this time for PEPSICO with challenges on volume front in the US (like most F&B companies in Q1) & lowered top-line guidance If this volume decline seems significant, we should keep in mind that it is extremely moderate compared to the pricing taken by PEPSICO over 2021-23 (+26%) Interestingly PEPSICO is the company that took the most pricing among the top 50 FMCG companies since 2021... more on this front in a dedicated article Full details below: Q2 FY24 •           NR: $22.5Bn •           OSG: 1.9%; Volume: -3%; Price/ mix: 5% •           GM%: 56%; +126 bps vs Q2 FY23 •           Adj. OP%: 18.3%; +103 bps vs Q2 FY23 •           Beat analysts’ consensus for earning but misses revenue Results by Divisions: •           Frito-Lay North America: $5.8Bn NR; OP: 27% (-80 bps vs Q2 2023); OSG: flat (Volume: -4%, Pricing: 3%) •           Quaker Foods North America: $561m NR; OP: 15% (-371 bps vs Q2 2023); OSG: -18% (Volume: -17%, Pricing: -1%) (driven by a quality issue & a plant closure) •           PepsiCo Beverages North America: $6.8Bn NR; OP: 14% (+379 bps vs Q2 2023) ); OSG: +1% (Volume: -3.5%, Pricing: +5%) •           Latin America: $3.0 Bn NR; OP: 21% (+19 bps vs Q2 2023) ); OSG: +2% (Volume: -5%, Pricing: +6%) •           Europe: $3.5 Bn NR; OP: 18% (+375 bps vs Q2 2023); OSG: +7% (Volume: +2%, Pricing: +5%) •           Africa, Middle East and South Asia: $1.6 Bn NR; OP: 15% (-81 bps vs Q2 2023); OSG: +12% (Volume: +1%, Pricing: +12%) •           Asia Pacific, Australia and New Zealand and China Region: $1.1 Bn NR; OP: 20% (+43 bps vs Q2 2023); OSG: +1% (Volume: -0.5%, Pricing: 1.5%) FY24 guidance: Updated its previous guidance for 2024 •           Approximately 4 percent organic revenue growth (previously at least 4%) •           At least 8 percent increase in core constant currency EPS (consistent with previous guidance) Time for all to refocus on organic (volume) growth Exciting times To read our last publication on how to accelerate organic (volume) growth: 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀: 𝗠𝗮𝗻𝗮𝗴𝗶𝗻𝗴 𝗙𝗶𝗻𝗮𝗹𝗹𝘆 𝗙𝗼𝗿 𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗹𝗲 (𝗩𝗼𝗹𝘂𝗺𝗲) 𝗚𝗿𝗼𝘄𝘁𝗵 𝗢𝗿 𝗛𝗼𝘄 𝗧𝗼 𝗦𝘁𝗼𝗽 𝗦𝗵𝗿𝗶𝗻𝗸𝗶𝗻𝗴 𝗧𝗼 𝗚𝗹𝗼𝗿𝘆 - 𝗙𝗿𝗼𝗺 𝗭𝗕𝗕 𝘁𝗼 𝗭𝗕𝗚® (𝗭𝗲𝗿𝗼-𝗕𝗮𝘀𝗲𝗱-𝗚𝗿𝗼𝘄𝘁𝗵) https://lnkd.in/eV5d39VE 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀 & 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: https://lnkd.in/ea4gy65y #fmcg #cpg Nestlé The Coca-Cola Company Coca-Cola Europacific Partners Coca-Cola HBC Coca-Cola FEMSA Carlsberg Group The HEINEKEN Company Keurig Dr Pepper Inc. Mondelēz International Campbell's General Mills Kellanova Bel Procter & Gamble Danone https://lnkd.in/e8BJHKNV

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Delighted to see my co written article with Deena Pitzele of The Partnering Group covered by Store Brands. As we look at Walmart launch of #bettergoods and unpick some of our view on the strategy behind the aspiration of achieving a $3b brand and ~300 lines. Is it to target new customers from competitive retailers such as Trader Joe's and Kroger or having seen how the #ukretailers and #australianretailers built their different strategies to combat the aggressive growth of Aldi UK and ALDI Stores Australia in the market, the start of their strategy focusing on the growth go ALDI USA #privatebrands #privatelabel #retail #usaretail #groceryretail #ownbrand #customerfocused #foodanddrink #growthstrategy #discounter #ukretail #australianretail #brandstrategy #productinnovation #consulting Greg Sleter Prof. Consulting Group Deena Pitzele (PLMA) Private Label Manufacturers Association Australia / New Zealand Food and Drink Exporters Association (FDEA) https://lnkd.in/e7gqA_HQ

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WE ARE IN A GLOBAL ECONOMIC FUNK, BUCKLE UP! When Stalwart Brands Like PepsiCo Trim Revenue Expectations We Should Pay Attention. We are still ducking Covid, two wars, inflation (prices remain high) as do interest rates. Asian markets have slowed down as have their factories. Oil prices are on the rise again. And one report says consumers plan to spend the same amount of money on Halloween (for example) as they did last year. One of the reasons PepsiCo and others are trimming revenue. Consumers are getting less for their money. Which means everything else is expensive and they will not buy more than they can afford. The grip of higher prices and keeping a roof over one’s head and food on the table is a bigger priority than splurging. Retail therapy today is more akin to balancing the home Economics budget and taking care of necessities. #retailing #strategy #ceo #technology #innovation

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88% of retailers believe consumers love to browse stores, but only 69% of consumers agree 📈 It's time for stores to step up their game and make shopping more fun and seamless, blending the best of online and in-store shopping. See how retailers can meet customer needs and create a better shopping experience. 🛍️ https://accntu.re/3WMz7mO #Retail #CustomerExperience #Accenture

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The Costco Wholesale phenomenon is a masterclass in #retail excellence, blending strategic product placement, bulk-buy bargains, and an engaging treasure-hunt experience to convert first-time shoppers into lifelong members.     By meticulously curating a chaotic yet efficient environment, Costco has achieved what many retailers aspire to – a deeply loyal customer base. And from the depths of the aisles, a key takeaway emerges: retail success lies in creating compelling, value-driven experiences that resonate with #shoppers on a personal level. Read more great insights on Costco’s successful #customer retention model from Phil W.: 

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Consumer escapism trends are on the rise. As people look for ways to de-stress, nostalgia, inspiration, aspiration, and self-care have become key themes in consumer shopping behavior. Read Circana's full report for more: https://bit.ly/4dwX46N

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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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Reckitt has announced plans to sell some of its home-care brands and review options for its infant formula business, signalling a major strategic shift.  This move aims to streamline operations and focus on high-performing "Powerbrands" like Durex and Nurofen. This restructuring, coupled with Mars' recent acquisition of Kellanova, points to a short-term period of consolidation in CPG. As market dynamics evolve, companies are strategically realigning their portfolios to maximize efficiency and profitability. Key Considerations must include Sales and Demand Planning. In this shifting landscape, robust sales and demand planning becomes crucial. It's not just about forecasting sales, but understanding how portfolio changes impact: -Price/Pack Architecture -Trade Promotion Optimization -Product Mix Optimization -Supply Chain Efficiency -Distribution Networks -Transportation Logistics -Raw Material Sourcing These strategic moves ripple through the entire value chain. A holistic understanding of how changes in one area affect others is essential for success in this consolidating market. Looking ahead it's likely that further M&A activity will occur. Those who can navigate these complex interdependencies will be invaluable. The ability to adapt quickly and optimize operations across the board will be key to thriving in this dynamic environment. Starting with Sales and Demand planning - being able to accurately forecast your entire portfolio across all the markets you serve - vastly improves the way your supply chain operates and how your products get into stores closer to that "just-in-time" holy grail, while also opening the door to profit, revenue and share gains. Focused AI, such as that found in Wisdom Analytics Inc. AI platform, brings a level of coverage, speed and accuracy that has previously been unavailable to the industry, making it your competitive advantage. Think of a hyper-focussed "brain", built to find the money 24/7. For more information and a 15-minute demo of our AI platform, please DM me! source: https://lnkd.in/ggqZ5qwj #TPO #RGM #PPA #FMCG #CPG #CPGIndustry #StrategicPlanning #MergersAndAcquisitions #SupplyChain

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Recommend following this one as an example of a brand designed for what’s next. 75% of calories are from protein. Half the weight of the bar is protein. In a share driven, economically challenged environment this level of efficiency will win. The density gives shoppers and retailers what they want with less diesel, packaging, water, shelf space and commodity use. Built for speed. Unsurprising coming from Peter Rahal of Rx, the name is great and the design is modern. Of course it needs to taste good, but RXBAR proved that you just have to taste good enough. One to watch!

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Excellent interview again by TobaccoIntelligence : “EU member states can take advantage of Sweden’s success story,” he said. “We need to talk about facts, and facts say that the EU has set a smoking incidence target of 5% before 2040, which Sweden has already reached, halving its smoking incidence rate in the past ten years.” According to Fiocchi, the drop in the number of Swedish smokers was largely due to their transition to smoke-free alternatives such as snus and nicotine pouches. “Sweden has the lowest tobacco smoking-related mortality rate in Europe and the lowest incidence of lung cancer and other tobacco-induced pathologies,” he said. “This is thanks to regulation policies granting access to and the convenience of new-generation products.” #harmreduction #nicotinepouches #snus #Stingfree #Stingfreesnus #EUforsnus #EU4snus https://lnkd.in/d_YMtNV5

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Our research shows that rising disposable income is not going to necessarily lead to more consumer spending. New embedded cost cutting habits plus a preference to save any excess cash means brands and retailers are going to have to continue to work hard to win the consumer £1, competing for market share rather than rising a rising consumer spend.

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Here are some interesting stories from the world of retail for Saturday, November 23: 🥦 Kroger said its chief merchandising and marketing officer Stuart Aitken is leaving the company after about four years in the role, at a time when the company is expanding its assortment of products. 📈 US consumer sentiment rose in November by less than previously reported, according to revised data from the University of Michigan. Its final consumer sentiment index edged up 1.3 points over the prior month. 📦 Walmart is investing in its last-mile delivery operations to improve convenience for shoppers while cutting its delivery costs. This is particualrly important for growing higher income shopper share. 💳 At least 50 of the largest US retailers boosted interest rates on their store credit cards in the months before the Federal Reserve began cutting rates, in moves that protected their profit margins. 💅🏼 Nail care brand Olive & June has entered into an agreement with Helen of Troy to be acquired for $240 million, which includes a $15 million earnout subject to performance over three years. ⛽️ Thanksgiving travelers can be grateful for the lowest gas prices since 2021. Average gas prices on cusp of a fall below $3, as most states boast prices below that key level. 🎁 Dupes may just be the hottest gift of the season. This year, 79% of shoppers said they would buy a dupe as a gift for their loved ones for the holidays, which puts it near the top of gifting lists. 👟 Puma has gone big in Las Vegas. The athletic footwear and apparel giant has opened its second North American flagship, a  25,000 sq ft, three-level store at the BLVD Las Vegas. 👚 Boohoo is grappling with significant financial challenges. The UK group's revenue fell from £1.76bn to £1.46bn for the year ending 29 February 2024, with a pre-tax loss widening from £90.7m to £159.9m. 🤖 Amazon doubles down on AI startup Anthropic with $4bn investment Amazon’s total investment in the AI company now totals $8bn, with its AWS unit as Anthropic’s cloud provider. ⛄️ Metaverse shop Walmart Realm is launching a holiday update which includes four new virtual shops inspired by social trends from Pinterest and TikTok, with gifts and holiday ideas curated by influencers. 🇨🇦 Higher sales at food and beverage shops drove a 0.4% increase in Canadian retail sales in September compared to August, reaching C$66.94bn ($47.82bn), Statistics Canada reported on Friday. 📉 Shares in Montreal retailer Groupe Dynamite fell more than 5% in Toronto after its C$300m ($215m) IPO. The group, which has 300 stores in the US and Canada under the Dynamite and Garage brands, closed at C$19.85. #retail #retailnews #economy #DailyRetailNews

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📰 BIG NEWS FOR UK RETAIL🗞️ Retail Royalty Allan Leighton joined Asda, from Mars in 1992 as Marketing Director and became CEO in 1996. He led a major turnaround, taking the company from financial struggles to success, culminating in its £6.7 billion sale to Walmart in 1999. After leaving Asda in 2000, Leighton pursued a portfolio career, holding non-executive roles, including The Co-op, Royal Mail, BrewDog, Dyson, BSkyB, Scottish Power. Today Allan’s return to Asda as Executive Chairman was announced, succeeding Stuart Rose, at a time when the company faced significant challenges. Asda has been struggling with declining sales and market share, dropping to 12.6% from 13.7% the previous year. Major operational issues, such as payroll glitches and IT system transitions, have disrupted store operations and employee satisfaction. Leadership instability has added to the uncertainty, following the departure of CEO Mohsin Issa. Financial pressures, including a £3.8 billion debt burden from its 2021 acquisition, have limited the company’s ability to compete effectively, particularly against discount rivals like Aldi and Lidl. Moreover, regulatory and economic pressures, including rising National Insurance contributions and an increased living wage, are expected to add substantial costs. Leighton’s leadership is seen as critical to navigating these challenges and revitalising the company. I sincerely hope that Allan succeeds in restoring Asda to its rightful position as a vibrant and innovative leader among UK grocers. Historically, Asda set itself apart with initiatives such as the introduction of George clothing, its diverse own-brand product range, cheerful and distinctive branding, and memorable seasonal campaigns. These initiatives not only defined its identity but also resonated with customers, my go-to as a student. #TheCPGGeek #IBMRetail #IBMConsumer #FMCG #ConsumerGoods #Retail Proud to be a #RethinkRetailTopExpert - RETHINK Retail #RethinkRetail #NRFRetailVoice - National Retail Federation #NRF #Asda

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As is often the case for consumer and retail businesses it is a rollercoaster of positives and challenges. We remain optimistic on consumer spending, certainly on food and certain non-food categories, as we run into Black Friday and Christmas spending. Retailers will need this though to face the cost headwinds coming in April 2025.

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𝐏𝐨𝐰𝐞𝐫 𝐨𝐟 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩𝐬 Five years ago, during a business trip to Korea, I traveled over two hours to visit one of our lip care contract manufacturers. We had just launched our lip care line with them in 2018, buoyed by exceptional consumer feedback. 𝐑𝐨𝐚𝐝 𝐭𝐨 𝐒𝐮𝐜𝐜𝐞𝐬𝐬 𝐢𝐬 𝐍𝐨𝐭 𝐋𝐢𝐧𝐞𝐚𝐫 However, gaining traction with key retailers was a challenge initially, leading to sluggish growth that didn’t meet our business case expectations. Our partner, having already invested in a production line on behalf of us, was facing less than 50% capacity utilization and understandably nervous. I felt responsible to reassure them of our product's potential and that growth would follow. 𝐒𝐭𝐫𝐞𝐧𝐠𝐭𝐡 𝐢𝐧 𝐚 𝐒𝐡𝐚𝐫𝐞𝐝 𝐕𝐢𝐬𝐢𝐨𝐧 Meeting the Owner and CEO for the first time, I realized we shared a common goal—exponential growth. I communicated our vision for the Vaseline lip care line and the building blocks to achieving it, stressing how crucial his team would be when (not if) we unlocked more markets and retailers. With a clearer understanding of our growth journey, we leveraged mutual trust and respect to brainstorm strategies for winning over retailers, including emphasizing our 𝘤𝘩𝘦𝘤𝘬-𝘰𝘶𝘵 𝘤𝘰𝘶𝘯𝘵𝘦𝘳 pack—a crucial factor in the impulse purchase category. This laid the foundation for our long-term commitment to our common goal - exponential growth. 𝐑𝐞𝐚𝐩𝐢𝐧𝐠 𝐑𝐞𝐰𝐚𝐫𝐝𝐬 𝐓𝐨𝐠𝐞𝐭𝐡𝐞𝐫 Though it took time, we eventually secured the necessary retailer listings, expanded into new markets, and got our 𝘤𝘩𝘦𝘤𝘬-𝘰𝘶𝘵 𝘤𝘰𝘶𝘯𝘵𝘦𝘳 pack listed in Walmart—a significant milestone and growth driver. With regular check-ins, our partner proactively invested in more lines and capacity on behalf of us, anticipating new listings. Today, despite the initial challenges, we have grown the lip care business by 10X since our first meeting, establishing Unilever International as the largest and fastest-growing lip care business within Unilever. This success was made possible by a shared vision with our partner, who also grew their factory to become one of the five largest lip care manufacturers in the world. A true win-win situation. 𝐑𝐞𝐜𝐢𝐩𝐞 𝐟𝐨𝐫 𝐚 𝐖𝐢𝐧𝐧𝐢𝐧𝐠 𝐏𝐚𝐫𝐭𝐧𝐞𝐫𝐬𝐡𝐢𝐩 This experience taught me valuable lessons about building strong business partnerships: ·       Align on shared vision and goals ·       Build mutual trust and respect ·       Leverage complementary strengths ·       Focus on long-term commitment ·       Recognize and appreciate contributions We often share our visions internally but sometimes forget that our partners are equally invested in our growth journey. Through this partnership, we’ve not only grown our business but also built a stronger and more cohesive team. Now, whenever I meet a partner, I make it a point to take a picture to remember the moment. Who knows where our partnerships will take us five years from now? #UniquelyUnilever #UnileverInternational

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PepsiCo: double (top-/ bottom-line) beat but with contrasting dynamics (international vs. US) The weaker demand from lower-income consumers in the US may well be a recurring theme in earnings call this quarter Specifically, volume fell 5% on Beverage in NA while Frito-Lay North America lost 2% volume in the quarter To be monitored carefully at a time consumption patterns are increasingly diverging in the US between lower-income consumers & the rest Full details below: Pepsico Q1 FY24 results summary: • NR: $18.3Bn • OSG: 2.7%; Volume: -2%; Price/ mix: 5% • GM%: 54.8%; -43 bps vs Q1 FY23 • OP%: 16.1%; +40 bps vs Q1 FY23 • Beat analysts’ consensus for revenue as well as EPS FY24 guidance: • Consistent with its previous guidance for 2024 • At least 4 percent increase in organic revenue • At least 8 percent increase in core constant currency EPS Interesting year ahead for PEP 𝗧𝗼 𝗴𝗲𝘁 𝗮𝗹𝗹 𝗼𝘂𝗿 𝗶𝗻𝘀𝗶𝗴𝗵𝘁𝘀, 𝗳𝗼𝗹𝗹𝗼𝘄 𝘂𝘀/ 𝘀𝘂𝗯𝘀𝗰𝗿𝗶𝗯𝗲 𝘁𝗼 𝗼𝘂𝗿 𝗙𝗠𝗖𝗚 𝗖𝗘𝗢𝘀 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗻𝗲𝘄𝘀𝗹𝗲𝘁𝘁𝗲𝗿: 𝗵𝘁𝘁𝗽𝘀://𝗹𝗻𝗸𝗱.𝗶𝗻/𝗲𝗥𝟴𝘃𝗗𝗽𝘃𝗘 #cpg #fmcg The Coca-Cola Company Mondelēz International Procter & Gamble AB InBev The HEINEKEN Company Carlsberg Group Danone Mars Bel General Mills Kraft Heinz Campbell's L'Oréal Nestlé https://lnkd.in/eCsuteg6

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