What's top of mind for marketers and investors right now? Judging by last week's Consumer Analysts Group of New York meeting last week in Boca Raton, Fla., it's the specter of acquisition, the need for cost cutting -- oh, and Satanism and a glue shortage. Here we present seven takeaways from the conference, in which 28 consumer packaged-goods companies laid out a road map for the year ahead to analysts.
Price cuts ahead
For those who are into signs, Edgewell Personal Care, maker of Schick and private-label blades for such retailers such as Walmart, saw its stock plunge exactly 6.66% --the supposed mark of the devil -- on Feb. 23 after P&G Chief Financial Officer Jon Moeller announced at the conference that Gillette will cut razor blade prices a whopping 12% on average starting March 30. The devil is in the details, of course, and P&G provided few. A spokesman said all Gillette blades, even high-end Fusion ProShield, could see some reduction. Mr. Moeller said prices on some blades could fall as much as 20%. An Edgewell spokesman noted that P&G already had been cutting blade prices, though Nielsen data from Deutsche Bank show only by 1% for the 12 weeks ended Jan. 28. The move aims to reverse share gains by cheaper blades that include Edgewell's private labels, Harry's (which moved into Target last year) and Unilever's Dollar Shave Club.
Zero-based budgeting takes hold
Unilever Chief Financial Officer Graeme Pitkethly, speaking on Feb. 23, didn't say much new about an earlier-week announcement that his board is exploring "strategic options" in the wake of the scuttled offer. But he did note that Unilever in 2015 already had hired the same consulting team that 3G Capital, principal owner of Kraft Heinz, used to implement zero-based budgeting. Among ZBB's marketing impacts, he said, have been new ways of making sure people see ads the right number of times, so they don't get oversaturated but so Unilever gets maximum bang for the buck from each ad produced. The Kraft bid showed that Unilever probably needs to shift its thinking and communications more toward short-term results as opposed to its generally longer-term focus, Mr. Pitkethly said. "This has certainly been a trigger moment for Unilever and we will not waste it," he told the crowd.
Acquirers are on the hunt
With Unilever off its plate, 3G and Kraft Heinz are free to look elsewhere. And while maker of Heinz ketchup didn't present, analysts at CAGNY were buzzing over the quiet presence of 3G co-founder and Kraft Heinz Chairman Alexandre Behring. He sat near the front during just about every company presentation taking notes. One analyst joked that it was an "in your face" presence that implied "I've got my eyes on you." Another, however, noted that Mr. Behring has been at CAGNY seven straight years, but no one noticed until now. Clorox Co. Chairman-CEO Benno Dorer, speaking Wednesday, joked that digital "was the biggest buzzword in the industry until last Friday," alluding to Kraft's Unilever offer. Mr. Behring wasn't the only one piquing curiosity about his presence at CAGNY. Johnson & Johnson, which has only 23% of its sales in consumer products like Tylenol, baby powder and Neturogena skincare, is mostly covered by healthcare analysts who weren't there. So the first question Jorge Mesquita, exec VP-worldwide chairman of consumer companies at J&J faced, was "why are you here?" He said consumer analysts are an important part of J&J's investor base. He also made clear from his remarks that J&J isn't looking to sell or spin off its consumer unit. But he didn't rule out acquisitions.
Ad spending will rise -- or maybe it won't
Will all this consolidation talk lead to more or less ad spending? Hard to say. P&G's Mr. Moeller noted that category growth appeared to broadly slow in January, but that P&G is committed to stick with its spending plans. (Others, such as Church & Dwight Co. CEO Matthew Farrell, blamed P&G price promotion for those category slowdowns.) Colgate Chairman-CEO Ian Cook said that after two years of pulling back on ad spending in favor of trade promotion or to compensate for negative currency effects, the company is committed to increasing 2017 spending regardless of what happens with currency. Unilever has hiked marketing spending as a share of sales fairly steadily over the recent years, Mr. Pitkethly said, but it's not committing to continue that as it expands operating margin.
There's a glue shortage
Blame slime. Tweens are making the slimy green stuff at home for fun, and each recipe calls for three bottles of Elmer's Glue, said Newell's Mr. Polk. That's driven sales up 16% in the latest four-week period from a year ago. "Try finding Elmer's Glue these days," he said. "It's hard. But we're working on it."
Food marketers are keeping it clean
Marketers remain eager to trot out new products meant for trends of convenience and health -- not necessarily both in one product. Among new entries: microwaveable cups of scrambled eggs and Jimmy Dean breakfast meat from Tyson Foods. J.M. Smucker Co. is also increasing capacity to make millions more of its frozen Uncrustables peanut butter and jelly sandwiches. But clean label and better-for-you halos are not going away. At its luncheon, Campbell Soup Co. served Chunky Chili Mac Soup and Milano cookies alongside gluten-free Chicken Tortilla soup made with Swanson Organic Chicken Broth, an organic saltine version of Pepperidge Farm Goldfish crackers and a tomato and fennel salad made with a Bolthouse Farms brand garlic-flavored yogurt spread and dressing called "Maio."
Diets will be personalized
Campbell President-CEO Denise Morrison discussed the future of personalized diets as she outlined her company's investment in Habit, a nutrition plan and meal delivery service that includes foods based on DNA and blood samples people send in. "We are quickly moving to bespoke diets," Ms. Morrison said. She tried the service (created by Neil Grimmer, one of the co-founders of the Plum Organics baby food business Campbell previously acquired) and showed off that she has lost 15 pounds.