CPG Trends 05 December 2023
Our November Roundup: greedflation, a free non-exclusive license from Unilever and the end of categories.
In this roundup, we discuss the end of categories, the possible impacts of Unilever's free non-exclusive license for 12 of its reformulation patents, Hotel Chocolat's new bar with 100% of sales to growers, and 'greedflation'.
3 minute read
The Competition and Markets Authority has criticised the grocery sector for contributing to food and drink inflation in this new report. This reflects growing concern and evidence that suggests a number of CPG companies have pushed through price increases that are greater than actual cost increases, and UK grocery inflation remains historically high. This move to retain high prices could be precautionary to protect against additional cost increases down the line, or it could be a matter of capitalising on the short term opportunity to increase prices that all competitors may be feeling. However, the short term gain may become ‘long term pain’ says Sevendots Partner Colin McAllister, as consumer catch on and veer towards private labels or lower priced brands, turning away from the big brands they used to purchase.
Additionally, we can see that some country authorities are taking more significant action – Unilever and Procter & Gamble have each been fined a million Euros by the Greek government for exaggerating profits in violation of consumer protection laws against inflation and ‘greedflation’.
Sevendots Partner Colin McAllister encourages companies to address this as follows:
“The CPG industry, although not alone, is coming under fire for having raised prices too much in the last 12 months. Whatever the truth may be, it would be wise for companies not to celebrate their positive financial results (as banks and energy providers are doing) but rather to underline how they have worked hard to make their organizations and supply chains more efficient and intend to pass on the benefit to consumers soon.”Colin McAllister
From Confectionary News
Luxury UK chocolate brand Hotel Chocolat has launched two new bars that pledge 100% of their sales to fund a ‘better way for cacao farming’. The Better Way Bar supports free shade tree seedlings for farmers in Ghana to help promote biodiversity, as well as hands-on pruning and education to increase yields and knowledge sharing on organic fertilizers. This represents an interesting communication and equity building exercise, which hopefully also supports farmers in a genuine and authentic way.
From ‘the end of categories’ to tech-enabled permissibility: The trends reshaping the future of food
From Food Navigator
This piece addresses the growing blurring of definitions between categories, demonstrating changing consumer attitudes that also enable companies to explore new opportunities for innovation. Blurring also continues between restaurants and retail brands, with restaurants becoming ‘product labs’. Reorganizing categories towards higher level consumer needs is an important step forward, and the article also mentions a new dimension within the taste and ingredient lens. There is more change to come, as innovation continues. Managing Partner of Sevendots, Andrea Bielli, says:
“The new retail environment is promoting a less rigid divide in categories, allowing brands to move across different segments and offers. This can also open up the potential to provide higher level solutions to consumers as an interesting development.”Andrea Bielli
From The Grocer
Unilever has decided to grant manufacturers of its ice cream a free non-exclusive license for 12 of its reformulation patents to help reduce carbon emissions. These patents are for ice cream products that remain stable at minus 12 degrees rather than the current standard of minus 18 degrees. This effort seems aimed at encouraging the entire ice cream industry to consider and actively reduce carbon emissions via energy saving measures – an attempt at tackling problems collectively, rather than individually. Sevendots Partner Miriam Mostarda says of this initiative:
“Unilever continues to prove its long-lasting commitment to be a force of change as it tackles its ice cream formulations to ensure the same product quality and organoleptic experience, at a lower temperature across its millions of freezers worldwide. With the extension of the reformulation patent to its competitors, Unilever elevates its sustainability agenda, turning it into a genuine and purposeful initiative.”Miriam Mostarda
There we go, another roundup from us at Sevendots! Keep up to date with us on LinkedIn, where we’d love to hear about what CPG news caught your eye this past month.