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Last week, some of the largest consumer goods companies convened in sunny Florida to strut their stuff at the Consumer Analyst Group of New York conference. Some companies highlighted their past year's performance while others showcased their new products.
Here are some of the trends that emerged from the conference.
1. From supersized to miniaturized
For years, restaurants have tempted us into ordering up. They've inquired if we "want fries with that" or "would like to supersize" or even "want to save money by getting a larger soda." But bigger isn't always better. In fact, consumer goods companies have found that when they reduce a product's packaging size, we customers will actually still pay the same amount of money.
Kellogg (NYSE: K ) passed higher grain costs on to consumers by reducing the size of its Corn Pops and Apple Jacks cereal boxes by 15% in 2008. At about the same time, Hershey (NYSE: HSY ) introduced Reese's "Minis," which were smaller than the Reese's "Miniatures" and cost more. At last week's conference, Hershey announced it would launch more of our favorite sugary treats in smaller sizes. Following the company's success of its Reese's Minis, Hershey's Drops, and Rolo Minis, Hershey plans to unveil Kit Kat Minis, and Twizzler and Jolly Rancher bites.
2. Drinkable breakfast, lunch, and dinner
Occasionally scarfing down a quick meal on the go is one thing. But apparently, we Americans are so busy that we can't take the time to cook an actual meal, sit down, and savor it.
As a result, both Kellogg and General Mills (NYSE: GIS ) want to redefine the way we think about breakfast, specifically cereal. Kellogg will roll out Breakfast To Go, a milk-based protein shake, while General Mills is currently testing its dairy-based BFast breakfast shake. Both companies point to the success of Up&Go, an Australian company's breakfast drink. The product enjoys more than one-tenth of that country's cereal business. American cereal makers are hopeful that trend will catch on stateside, too.
PepsiCo (NYSE: PEP ) has already unveiled similar concepts in emerging markets. After recently entering the dairy business, the maker of Quaker oatmeal launched a Quaker cereal powder drink in China. And, last year in Brazil, PepsiCo started testing a Quaker oatmeal drink. PepsiCo also recently rolled out Kickstart, a new breakfast drink combining the flavor of Mountain Dew with fruit juice and caffeine.
And, if you're still craving liquid at lunch and dinnertime, Campbell Soup (NYSE: CPB ) has got it in the bag. Literally. Last year, the company launched Campbells Go! Soup pouches, touting them as a more convenient way to consume soup on the go. The company hopes to give its 143-year-old brand an updated look and feel, especially to busy 20-something consumers.
Campbell Soup CEO Denise Morrison says that repeat purchases of the pouches are strong. However, she admits that getting consumers to try the $3 soup pouches (versus about $1.10 per can) has been a challenge. But it seems the plan is working so far. Sales of ready-to-serve soups were up 4% in the most recent quarter from the same period last year.
3. Liquefied snacks
Believe it or not, companies want to liquefy even more of our food. And who better to think of creative ways of doing so than PepsiCo? Not only is PepsiCo one of the largest beverage companies on the planet, but it's also the leading U.S. salty snack food maker.
PepsiCo thinks there's real value in the "coincidence of consumption of snacks and beverages." According to the company, roughly half the time a U.S. consumer buys a salty snack, they also purchase a refreshment beverage. Because of this, PepsiCo boasts enormous ability to capture cross-selling opportunities.
But at last week's conference, CEO Indra Nooyi took that one step further by indicating that PepsiCo is looking at ways to "drinkify" its snacks. Personally, the thought of throwing back a can of liquid Cheetos is downright unsavory. Hopefully she had something else in mind.
Foolish bottom line
Thriving consumer goods companies must keep their ideas fresh by continually developing desirable new products or repositioning already-sought-after brands. Not every new product will be a smashing success. As a result, prosperous companies must possess other attributes like great management, solid financials, and a sustainable competitive advantage.
PepsiCo has quenched consumers' thirst for more than a century. But recently, the company has left shareholders craving more. With increased competition and loss of market share, many investors wonder if this global snack food and beverage giant is simply fizzling out. Are more bland results ahead for PepsiCo? In The Motley Fool's new premium report on the company, we guide you through everything you need to know about PepsiCo, including the key opportunities and threats facing the company's future. Simply click here now to claim your copy today.