Posts tagged with "PepsiCo"

Kind expands into four new supermarket aisles—including frozen desserts

February 11, 2020

New York City-based Kind, the snack brand—which claims to have created the ubiquitous modern bar category (specifically, to-go bars with easily identifiable ingredientsn 2004, is attempting to extend its success to four new categories, according to a report by Fast Company.

“Since day one, KIND has been obsessed with upholding our brand promise – to create innovative, premium foods that are both healthy and tasty,” Daniel Lubetzky, founder and executive chairman of the 16-year-old company, said in a press release. “While these categories are new for us, each is consistent with how we’ve always entered new categories – with an eye to creatively elevate people’s overall experience.”

Starting this month, you’ll see Kind expanding into four grocery sections:

  • Frozen desserts.Kind Frozen bars are plant-based, creamy frozen treat bars made from nutrient-dense nuts, layered with smooth dark chocolate and nut butter;
  • Treats. Kind Bark comes in dark chocolate flavors with various combinations of nuts.
  • Cold foods. Kind Nut Butter Bar is the company’s first-ever refrigerated, smooth and creamy nut butter protein bar.
  • Kind Clusters mix nuts with seed and fruit clusters, halfway between granola and snack mix.

Jumping into new aisles is a risky, high-failure venture for food brands, but, Fast Company notes, these forays are essential for growth: Kind has hovered around 5% of the bar market for years, facing steep competition from copycats and much larger competitors like Quaker Oats (owned by PepsiCo) and Nature’s Valley (owned by General Mills). The company has previously experimented with expansions into breakfast bars, granola, and fruit snacks.

Along with bitter rival Clif Bar, Kind is one of few still-privately owned ambitious food companies. (Kind received a cash infusion two years ago when Mars, the candy bar and pet food company, took a minority stake, paving the way for today’s category expansions.

Research contact: @FastCompany

Consumer brands to test refillable containers, delivered and returned in ‘milkman-style mode’

January 25, 2019

Fill ‘er up: The world’s biggest producers of shampoo, detergent, and packaged food will test selling their products in reusable containers—adopting a “milkman-style mode” to address mounting concerns about plastic waste, The Wall Street Journal reported on January 24.

Procter & Gamble, Nestlé, PepsiCo, and Unilever are among 25 companies that, next summer, will try selling some products in glass, steel, and other containers designed to be returned, cleaned, and refilled.

While critics already are questioning high costs and entrenched consumer behavior will tank the project, the companies say that such efforts will reduce waste from single-use packaging. It also could represent an effective way to woo eco-conscious consumers, glean data, and foster brand loyalty.

“I sometimes wonder if it’s a fair accusation that we’re in the branded litter business,” Unilever Chief Executive Alan Jope  said at a conference on January 22, the Journal reported, adding that the company must do more on plastic waste. “That’s what people care about right now.”

Unilever is known for its food and refreshment brands (Breyers, Hellmann’s Knorr, Lipton), home care solutions (Domestos toilet bleach), and beauty and personal care products (Axe, Dove, Vaseline).

The company, based jointly in London and Rotterdam, will sell nine brands in refillable containers as part of the initiative, which will be run by Trenton, New Jersey-based recycling company TerraCycle—and will start with 5,000 shoppers in New York and Paris in May, the Journal reports. The pilot will extend to London later this year and cities including Toronto and Tokyo next year, according to TerraCycle.

Unilever estimates that a refillable steel container for its Axe and Dove stick deodorants will last eight years—long enough to prevent the disposal of as many as 100 traditional deodorant packages.

Refillables once dominated industries such as beer and soft drinks but lost out to convenient, affordable single-use containers. In 1947, refillables made up 100% of soft-drink containers by volume and 86% of beer containers, according to the Container Recycling Institute, a nonprofit. By 1998 those figures dropped to 0.4% and 3.3%, respectively.

While a handful of entrepreneurs have founded businesses that sell shampoo and detergents in refillable containers, and some grocery stores sell in bulk to consumers who bring their own containers, the practice is niche, according to the Journal.

“From a philosophical point of view, we have got to lean in and learn about this stuff,” Simon Lowden, president of PepsiCo’s Global Snacks Group, who also leads a task force on plastic waste, told the business news outlet. “People talk about recyclability and reuse and say they’d like to be involved in helping the environment, so let’s see if it’s true.”

PepsiCo will sell its Tropicana orange juice in a glass bottle and Quaker Chocolate Cruesli cereal in a stainless-steel container as part of the trial.

Cincinnati-based Procter & Gamble will sell ten brands—including Pantene shampoo in an aluminum bottle, Tide laundry detergent in a stainless-steel container , and an Oral B toothbrush with a durable handle and a replaceable head.

“It’s really about a new delivery system and making sure once people are hooked into this they stay with the product,” P&G’s Chief Sustainability Officer Virginie Helias told the newspaper.

Shoppers whom the companies select for the trial will be able to order hundreds of products—including Nestlé’s Häagen-Dazs ice cream and Clorox’s wet wipes—from a website for home delivery. Products will arrive in a reusable tote with no extra packaging. Once finished, users schedule a pickup for empty containers to be cleaned and refilled.

Participating consumers can sign up for a subscription-based service that replenishes products once empty containers are returned. TerraCycle will handle delivery, returns and cleaning.

The products will cost roughly the same as the versions in single-use containers, but users will also have to pay a deposit of $1-$10 per container. Shipping charges start at roughly $20, decreasing with every item added.

 “Recycling is not the answer to garbage,” said TerraCycle CEO Tom Szaky. “The real problem is how do we solve waste, and the root cause of waste is disposability.”

Proponents of refillables say they can reduce greenhouse-gas emissions, waste and energy use. A bottle refilled five times as part of the project has an impact equivalent to five single-use bottles when accounting for the use of resources and the release of pollutants, estimates TerraCycle. Each use after that is incrementally better for the environment, the company believes.

The project isn’t likely to be profitable anytime soon given its small scale. Companies have had to invest between six and seven figures per product to subsidize prices and develop packaging, among other things.

“You simply have to start somewhere to test it and see what the barriers are and who actually buys into the model,” Unilever’s Research-and-Development Chief David Blanchard told the Journal, adding, “If there are sufficient people then you can scale it.”

Unilever participated in a 2010 pilot to sell laundry detergent in refillable containers, but that effort failed in part because consumers didn’t like the inconvenience of washing containers and returning to stores for refills, Blanchard said. The coming trial is more convenient because consumers don’t have to clean the containers or physically return them to stores.

Research contact: @SaabiraC

PepsiCo has eyes on the booming cannabis market

October 3, 2018

On October 2, PepsiCo  announced better-than-expected third-quarter earnings that showed signs of growing consumer demand for its namesake cola, teas, Gatorade, and other beverages in North America

Now, following in the footsteps of competitor, Coca-Cola, Pepsi is reportedly taking a hard look at how the cannabis industry—and cannabidoil (CBD) products, in particular—can push those profits exponentially in the near future.

Coca-Cola last month said it is “closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages,” after reports surfaced it may be eyeing the cannabis-infused drink market, CNBC reported.

Indeed, Hemp Business Journal says that companies that jump on the CBD bandwagon now will enjoy an uptick as the market for the legal cannabis derivative explodes—to an anticipated $1.8 billion by 2020.

“I think we’ll look at it critically, but I’m not prepared to share any plans that we may have in the space right now,” Chief Financial Officer Hugh Johnston told Jim Cramer and Sara Eisen on CNBC’s Squawk on the Street on October 2.

Cannabis, which still is illegal at the federal level in America, but is legal in some states and in Canada, has attracted increasing attention from food and beverage companies as either an opportunity for future growth—or conversely, a threat to their brands, CNBC reports.

In mid-August, Corona beer-maker Constellation   announced an additional $4 billion stake in Canadian cannabis company Canopy Growth, following up on a previous investment in October 2017.

The CBD is derived from the marijuana plant that some people believe provides therapeutic relief. It does not include THC, which is what gives cannabis-users a “high.”

Research contact: @LaurenSHirsch

On the bubble: PepsiCo to acquire SodaStream in $3.2B transaction

August 21, 2018

PepsiCo and SodaStream International formally announced on August 20 that they have entered into an agreement under which PepsiCo has agreed to acquire all outstanding shares of SodaStream for $144.00 per share in cash, which represents a 32% premium to the 30-day volume weighted average price. The transaction has been valued at $3.2 billion.

The companies said that the deal would enable them to combine PepsiCo’s strong distribution capabilities, global reach, R&D, design and marketing expertise with SodaStream’s differentiated and unique product range—thereby, positioning SodaStream “for further expansion and breakthrough innovation.”

Founded in 1991 in Israel, SodaStream claims to be is “ the number-one sparkling water brand in volume in the world and the leading manufacturer and distributor of sparkling water makers; saying, “We enable consumers to easily transform ordinary tap water into sparkling water and flavored sparkling water in seconds. By making ordinary water fun and exciting to drink, SodaStream helps consumers drink more water.”

The transaction is another step in PepsiCo’s Performance with Purpose journey, the beverage and snack food company said—promoting health and wellness through environmentally friendly, cost-effective and fun-to-use beverage solutions.

“PepsiCo and SodaStream are an inspired match,” said PepsiCo Chairman and CEO Indra Nooyi. “[CEO] Daniel [Birnbaum] and his leadership team have built an extraordinary company that is offering consumers the ability to make great-tasting beverages while reducing the amount of waste generated. That focus is well-aligned with Performance with Purpose, our philosophy of making more nutritious products while limiting our environmental footprint. Together, we can advance our shared vision of a healthier, more-sustainable planet.”

For his part, Birnbaum commented, “Today marks an important milestone in the SodaStream journey. It is validation of our mission to bring healthy, convenient and environmentally friendly beverage solutions to consumers around the world. We are honored to be chosen as PepsiCo’s beachhead for at home preparation to empower consumers around the world with additional choices. I am excited our team will have access to PepsiCo’s vast capabilities and resources to take us to the next level. This is great news for our consumers, employees and retail partners worldwide.”

“SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalyzing our ability to offer personalized in-home beverage solutions around the world,” said Ramon Laguarta, CEO-Elect and President, PepsiCo.  “From breakthrough innovations like Drinkfinity to beverage dispensing technologies like Spire for foodservice and Aquafina water stations for workplaces and colleges, PepsiCo is finding new ways to reach consumers beyond the bottle, and today’s announcement is fully in line with that strategy.”

According to their joint statement, the acquisition has been approved unanimously by the boards of directors of both companies. The transaction is subject to a SodaStream shareholder vote, certain regulatory approval,  and other customary conditions, and closing is expected by January 2019.

A Forbes analysis of the carbonation maker found, “SodaStream had said some time back that the global market for at-home beverage systems has the potential to grow to $260 billion, while the market in the U.S. could generate a cumulative $40 billion. “Of course,” the business news outlet said, “this estimate used the aggressive assumption that these systems will penetrate about 87% of the domestic households, which seems improbable.”

According to small business and marketing advisor Brandon Gaille, the average American consumes 44 gallons of soda every year—a 20% overall decline from peak rates in the 1990s. Sales of sparkling water jumped 8.6% between 2009 and 2011 while soda sales slumped.

Research contact: @Trefis