CAGNY 2025: Day 1

Welcome to CAGNY 2025! I’m excited for what this week holds, and especially, to hear from our industry’s leaders. The question to answer: How will we win in today’s increasingly disrupted market? In my prior post, I talked about the fact that the fundamentals still matter – meaning that, at the end of the day, we still make, market and sell consumer goods – and we need to do this in a way that delights the consumer and drives shareholder value.

I also want to point out that both technology and new ways of working are dramatically reinventing how we succeed in the fundamentals. You would have to have been hiding under a rock (on Pluto) to have missed the excitement around gen AI. Over the past year, this buzz has translated into more measured and pragmatic action as companies seek to understand how to utilize AI/ gen AI, other technologies and process redesign to transform both market opportunities and their enterprises at scale.

What is clear is that technology and new ways of working are impacting every part of the value chain and every role in the organization. We wrote a piece of thought leadership on this, and the key takeaway is that there is massive value at stake. One of the core principles is that we are saying goodbye to silos – that is, we are moving to a world of end-to-end processes that cross functional walls – moving from siloed activities to shared outcomes. We define these mega processes as follows:

In a nutshell, what we are describing is the translation of strategy into planning, brought to life with the invention of the consumer offering, and made real through the creation and delivery of the brand promise. These are the most fundamental of the fundamentals – but as I stated above, how we do this has markedly changed. We can no longer consider product innovation without also thinking about potential constraints further down the line (e.g., raw material supply). Every organization I talk to continues to complain about the walls between marketing and sales. And we have seen the profit draining impact of demand and supply mismatch.

Today we heard from 通用磨坊 , Conagra Brands , 可口可乐公司 , 亨氏 , The Hershey Company , 亿滋食品 , Sysco , 味好美 and Ingredion Incorporated . Let’s see how they are approaching each of these areas…

Insight to Plan – From strategy to resource allocation

Insights drive discovery, and a number of companies talked about how they were obtaining and using their insights capability. Conagra’s SVP of Growth Science, Bob Nolan, described the company’s ecosystem of insights.

At the highest level, market and consumer insights are driving ongoing company choices and investments. There are a lucky few companies who have been advantaged for a number of years, due to their prominence and continued expansion in higher growth areas (e.g., snacks and beverages). Coke’s Chairman & CEO James Quincey repeated a point he has used in the past, which is that there is still substantial headroom for growth in beverages, even for a company already known around the world – and this is driving the company's continued expansion in sparkling and still.

Facing constrained growth in the food industry, other players continue to reallocate their resources towards the faster growing parts of the market, while also being mindful in the ways they manage the less vibrant parts of their business.? While yogurt is growing, General Mills Chairman & CEO Jeff Harmening explained that the company plans to divest Yoplait as the brand features do not match well with the low-sugar/ high protein demands of today’s consumer; at the same time, the company has announced their acquisition of Whitebridge Pet Brands’ North American premium Cat feeding and Pet treating business – its 5th pet acquisition. As you can see from the below charts, the company has rotated 30% of its sales since FY18 – and added 1pp of growth through this shift.

And finally, disciplined resource allocation remained a theme. Sysco’s presentation focused strongly on discipline, including optimizing ROIC.

Both Kraft Heinz and Ingredion CEOs discussed their portfolio strategies – diverse segments with different attributes necessitating distinct approaches. Note that, in the past five years, KHC has shifted its portfolio from 61% to 75% focused on Accelerate brands.

Innovate to Scale – Inventing the consumer offering

It all begins with the consumer offering for the unmet need; as in past years, product innovations discussed today skewed towards brand extensions and renovation vs. truly breakthrough innovation. ?Thematically, companies focused on (1) leveraging the strength of winning brands in adjacent areas and/ or (2) fast growth demand spaces like health & wellbeing or indulgence. Speed to market and failure rates remain thorns in the industry’s side, and companies increasingly turn to new ways of working and external partnerships. Kraft Heinz is on target to deliver $2B in incremental net sales from innovation, having increased their innovation contribution from 1.6% to 2.9% as a % of organic net sales between 2022 and 2024. Their Mexican Food agile pod launched 7 new Mexican foods in under 12 months, with a 50% reduction in time to market – and $32M in sales in 2024. Some of their new products are bringing new consumers to the brand – for example, 11% households purchasing Philadelphia Chipotle Whipped were exclusive (i.e., had not been buying any other cream cheese)

KHC also partnered to develop a machine learning model to reformulate their portfolio – for example, in Brazil, the company was able to reduce added sugar and sodium in ketchup without adversely impacting taste. (This kind of reformulation has clear applicability in the cases of health & wellness, raw material shortages, sustainability and more.)

Companies increasingly are talking about the use of AI-powered innovation engines. ?McCormick has developed SAGE – Smart Agile Growth Enabler – an AI-enabled product development tool that bolsters the speed and generation of new ideas. Overall, McCormick has doubled the net sales contribution from innovation since 2022, and brought new consumers to the category – adding 6 million new households in 2024. When the company extended the Cholula hot sauce brand to salsas, 75% of buyers were actually new to the Cholula brand. The company is launching items in half the time as well as testing more new ideas through ecommerce. Renovation remains a key – and successful – part of their efforts; the red cap packaging renovation led to a 14% increase in velocity in 2024

Engage to Advocate – Winning engagements with consumers and customers

Unsurprisingly, increasing investment in brand building remains a core strategy; for example, companies frequently grew advertising as a % of revenues. Companies also regularly discussed the shift in marketing mix, as well as multimodal investments, including influencers, celebrity endorsements and more.

Coke called this “doing what we do best… even better.”

Sometimes engagement is as simple as making it easy for consumer to find what they want. Both Conagra and Kraft Heinz include clear labels on the packaging of products which target functional benefits important to GLP-1 users.

Revenue growth management remains a hot topic across the board – including for Mondelēz, who has been particularly hard hit by rising cocoa prices. Chairman & CEO Dirk Van de Put, stated that they were utilizing the full RGM playbook to protect chocolate consumption.

Evolving retail channels (e.g., club, dollar and hospitality), in-store execution (McCormick’s famous category shelf) and joint business planning all have their parts to play – as does sales. Sysco’s Chair & CEO Kevin Hourican called the investment in their salesforce a simple numbers game: The more feet they have on the street, the more they will sell. Of course there's a bit more to building sales capability, and he went on to describe the company’s five-part plan.

Plan to Deliver – Delivering on the promise

Supply chain initiatives are generally discussed by the CFO as the focus tends to be on the drive to productivity. Pretty much every company had supply chain initiatives ranging across better sourcing and procurement, digitizing the shop floor, network rationalization, logistics and more. Companies are also talking about investments in demand and supply planning – or, as Hershey describes it, integrated dynamic planning.

Sysco took it a step further to call out the fact that their supply chain capability is a critical competitive advantage and growth driver. As they asked during the presentation: With what player besides Sysco can a customer place an order as late as 9 pm, specify local produce, and have it arrive on a tri-temp truck?

Finally – and unsurprisingly – improving the resilience of cocoa supply was of concern to those companies heavily impacted, and Mondelēz outlined the steps they were taking - which other CPG companies should note, given that supply shortages and barriers look to be a continuing and unpredictable problem that could impact anyone. (Hint: Check out the lower righthand box on cocoa alternatives from plant cells; I think science will increasingly have to come to the rescue!)

Attract to Belong – Shaping and growing talent and the organization

Talent remained only a small part of the discussion today (as is the case most years.) I am glad when companies (like Kraft Heinz) call out their progress on employee engagement scores. As we know: what gets measured gets managed. Coca-Cola shared the below chart with a number of encouraging metrics.

And don’t forget the sales development plan that Sysco described above. But, for as little time as companies spent talking about people during today, I will tell you that this comes up as a serious and genuine area of concern for the leaders I meet regularly. Particularly in the era of AI, companies are thinking about the implications for the entire organization – from front-line to the most senior individuals – and questions on the shape of the workforce and navigating the change are truly troubling leadership.

Architect to Run – Powering the enterprise with data and tech

This section always gets a bit robbed, because, in truth, data and technology underpin everything that comes before it. We’ve already discussed how product innovation marketing, RGM, and supply chain are all being reinvented with digital. One of the specific factors the industry is facing is the move to S/4 – and it’s always interesting to listen to players who have already been through the journey – like Hershey.

Or a company who is going through the transformation – like McCormick & Co.

Execute to Value – Structuring and running the enterprise to optimize value

More and more, in my conversations with industry executives, I am hearing about shared services/ global business services. Regardless of the exact structure (captive or outsourced), companies are seeing this as a way to drive efficiency, effectiveness and agility.?In the section above, we see that McCormick lists Global Business Solutions in its Digital Transformation Priorities, and Kraft Heinz outlines their approach below.

And that brings us to the end. I’ll see you tomorrow!

Want to hear more? Check out my posts from CAGNY 2025: Day 0, CAGNY 2025: Day 2, CAGNY 2025: Day 3, CAGNY 2025: Day 4 and CAGNY 2025: What didn’t we hear?