CPG supply chain

The Stockout: Retailers, CPGs at odds over packaged goods pricing

CPGs have been playing catch-up on cost recovery

A frequent topic over the past two years has been the increasingly contentious relationship between consumer packaged goods companies and their retail partners. In that time, CPGs have gone to retailers asking for price increases more frequently in response to persistent cost increases. Even with frequent price hikes and fewer promotions that resulted in on-shelf prices up ~15% year over year (y/y) on top of near double-digit increases the year...

https://www.freightwaves.com/news/the-stockoutstrongstrongretailers-cpgs-at-odds-over-packaged-goods-pricing

Will consumers sacrifice everyday items for the rare splurge?

CPGs’ worst nightmare

For certain CPG categories, I would argue that the worst thing that could happen isn’t a recession but consumers getting religion on healthy eating and avoiding the center of the grocery store altogether. Healthy eating aside, earlier this week The Wall Street Journal highlighted a second concern that may be gaining traction — the newspaper described a new consumer phenomenon that is called “split-brain” budgeting, which refers to shoppers splurging on some items while...

https://www.freightwaves.com/news/will-consumers-sacrifice-everyday-items-for-the-rare-splurge

Nothing smooth about butter

High butter prices expected to persist

Butter is currently second only to eggs for the title of most inflationary food item, up 25% year over year, compared to 13%-14% for the entire grocery category. Inventories of cold butter at the end of July were the lowest since 2017. Those stocks are usually built up early in the year and drawn down most heavily during the winter baking season. In anticipation of rising demand as consumers bake their Thanksgiving desserts, butter manufacturers are warning...

https://www.freightwaves.com/news/nothing-smooth-about-butter

General Mills expects supply chain disruptions to persist

General Mills’ supply chain disruptions to persist

At a Wall Street conference earlier this month, Jonathan Nudi, General Mills’ president of North American retail, said, “We’re seeing 10 times the number of disruptions in our supply chain from an ingredient standpoint coming into our plants than we ever experienced before. And this gets really challenging because we can’t see them coming in many cases. So a truck is supposed to show up with oil at our refrigerated dough plant in Tennessee and...

https://www.freightwaves.com/news/general-mills-expects-supply-chain-disruptions-to-persist

Last-mile solution can optimize urban routes for an entire fleet

Inflationary increases in grocery and household goods are some of the more noticeable rises hitting stores, and although consumers are just starting to feel it, logistics companies for some time have been grappling with the issues behind some of these price increases.

Prices of ingredients and raw materials have noticeably increased over the last year due to higher wholesale costs, especially in the consumer packaged goods sector. At the same time, transportation costs are also high in part due...

https://www.freightwaves.com/news/last-mile-solution-can-optimize-urban-routes-for-an-entire-fleet

What the retail rout means for CPGs

Ranked 39th on the Transport Topics list of top brokerage firms, Axle Logistics takes a consultative and streamlined approach to your shipping needs. Email [email protected] to connect with the team today! 

Retail rout

This week saw a rout in retail stocks with shares of Walmart and Target down 21% and 31%, respectively, during the past five trading sessions. The retailers have January fiscal year-ends so the just-reported quarter includes February-April, a period that had more than its...

https://www.freightwaves.com/news/what-the-retail-rout-means-for-cpgs

Does reacting to real-time supply chain data beat forecasting?

Numerous companies, including CPG companies, at FreightWaves’ The Future of Supply Chain conference last week highlighted the difficulty of accurately forecasting. We heard that sentiment expressed from numerous companies, including transportation companies and intermediaries as well as CPG companies and other shippers. Basically, market forecasts are almost always too reflective of current market conditions without fully incorporating upcoming changes in market conditions. For example, in a...

https://www.freightwaves.com/news/does-reacting-to-real-time-supply-chain-data-beat-forecasting

CPGs still consider freight costs to be ‘headwinds’

CPG companies expect continued inflation on transportation costs this year. While there are plenty of signs on the horizon that suggest that a freight recession may be forthcoming, 2022 freight costs for most CPG companies are expected to be higher than they were in 2021. Procter & Gamble and Mondelez are among the major CPG companies that have warned analysts of higher freight costs on their earnings calls the past two weeks. 

The SONAR chart below is an illustration of why a loosening freight...

https://www.freightwaves.com/news/cpgs-still-consider-freight-costs-to-be-headwinds

CPG margin pressure no longer surprises Wall Street

Procter & Gamble highlights the combination of commodity, freight and foreign exchange as having a combined 22% headwind on core EPS in its fiscal 2022 (ending June 30). The company’s organic sales grew 10% in its just-reported fiscal Q3 2022, broken down into pricing, volume and sales mix contributing 5, 3 and 2 points, respectively. Despite 5% higher prices and 170 basis points in productivity savings, the company’s core gross margin contracted 400 bps. The implication is that the company’s...

https://www.freightwaves.com/news/cpg-margin-pressure-no-longer-surprises-wall-street

The Stockout: Branding agency Interact highlights packaging innovation and pitfalls

On last week’s The Stockout show, I interviewed Fred Hart, partner and creative director of Interact, a branding agency in Boulder, Colorado.Fred works with a wide range of CPG companies on packaging and branding that stands out in crowded fields of products. The show can be seen here. 

For those without the 26 minutes to spare, or who just prefer a written version, here is my paraphrased high-level advice on CPG packaging and branding from Interact:

Items should appear differentiated on shelves...

https://www.freightwaves.com/news/the-stockout-branding-agency-interact-highlights-packaging-innovation-and-pitfalls

+ More