Mars & Conair Peer Inside the Crystal Ball
As the consumer goods industry looks forward to the post-pandemic recovery, companies must evaluate which changes will be permanent, which were done too quickly, and which must evolve in order to stay relevant.
A recent webinar asked digital leaders from Mars, Conair, SAP and Deloitte to look inside their crystal balls for predictions about how CGs will focus their time, energy and CapEx. Read on to learn how Mars, Conair and others are adjusting operations and expectations based on new consumer behavior, and why the laggards who fail to invest will undoubtedly be unable to sustain a future.
Albert Guffanti: Good afternoon, everyone. My name is Albert Guffanti, group publisher of CGT and RIS here at EnsembleIQ. I'm thrilled that you've joined our highly anticipated webinar today entitled “Checking the Pulse of the Recovery.” I will be today’s moderator and am really excited to introduce our panelists, in just a moment.
Today's webcast is an extension of the work being done by CGT, SAP and Deloitte to benchmark the industry's response to the COVID crisis. This ongoing survey, which you'll hear more about, is called the Industry Pulse Check. We'll take a look back on what some of the findings are that we uncovered during the height of the pandemic. More importantly, how have these priorities changed for consumer goods organizations looking back a year later?
Let's dive into the topic of discussion for today. What does 2021 hold for consumer products companies? As we slowly transition from pandemic to recovery, we do so within an ecosystem that has been significantly transformed, and in some ways permanently. Where should you focus your resources and energy? From source to shelf we know that advanced technologies like blockchain, machine learning and artificial intelligence will play a critical role in how CP companies meet their consumers in the moment of need.
Leaders will deploy solutions according to new agile and fail-safe supply chain, and hyper accurate short-, medium-, and long-range forecasting models to accelerate the journey into the next phase of the new normal, all while taking care of the environment for a sustainable future. Our panel will share their short- and mid-term perspectives on how CP companies need to adapt to profitably serve customers, regardless of the sales channels they prefer.
With that, I'm extremely excited to introduce our panel of experts today, and they also happen to be good friends of ours. First off is Jon Harding, global CIO of Conair/Cuisinart. We also have Shubham Mehrish, VP of digital at Mars Inc.; Joe Lucca, managing director at Deloitte; and finally, Harris Fogel, global VP at SAP.
Jon and Shubham both also serve on my Executive Council board, so it's really great to have all these experts represented and sharing their perspectives. Gentlemen, great to have you as part of today’s webinar. Before we dive into the conversation, I'd like each of you to give us a brief background on your role, your organization, and what you're focused on. Jon, let's start with you.
Jon Harding: Hi, Albert. I’m with Conair/Cuisinart, a global consumer products company. Hopefully, most of you have some of our products at home. I'm the head of IT and digital, so our focus currently is continuing to improve our digital and IT capabilities to drive our business.
Shubham Mehrish: Hi, everyone, I’m Shubham Mehrish. I run digital for Mars. What that means is all of our big data platforms, artificial intelligence and machine learning teams, and digital technology infrastructure. Mars, as some of you may know, is the world's largest confectionery company and also the world's largest pet care company. So, I’m happy to be here, thanks.
Joe Lucca: Hi, good day everyone. I’m Joe Lucca, a leader in Deloitte’s retail and consumer product practice. My focus is primarily playing at the intersection of supply chain technology and the consumer industry, focused on large scale enterprise business transformation with some of our key clients. Hopefully, most of you are familiar with Deloitte; we're the world's largest privately held consulting firm.
Harris Fogel: I'm Harris Fogel. I run SAP’s global consumer products, focusing on the fast-moving consumer goods segment. I have 30 years in the CPG industry focused on various topics, and am really proud of my team. We run strategy and manage the solution specific to the industry, ranging everywhere from product innovation, all the way through sales and marketing — things like trade promotion, management sustainability, retail execution, and the list goes on. Really honored to be here as part of this panel. Thanks to you, Albert, and the CGT community for hosting us.
Guffanti: We're extremely excited about this webinar. It's a critical webinar at this point in time for all of us in the industry as we attempt to navigate the changing landscape in front of us.
As I said when I kicked things off, at the time this survey was called the Pulse Check survey, it was conducted when there was an extraordinary amount of change and shifting going on on a daily basis. We all remember waking up and not knowing what the news was going to have in store for us. We really had blinders on, we couldn't see, really, what was going to happen in the next month.
This survey really represents an important point in time, and it represents an ongoing discussion that we intend to have with the industry. So, we can have breadcrumbs and a point of reference as we navigate this. Hopefully, we don't have to deal with this, but if another crisis should present itself, we have the documentation.
So, the Pulse Check Survey, as you can see here, represented a wide array of respondents in the industry. We have many different categories represented: food, beverage, health and personal care, consumer electronics, and so on. But also, a good distribution of company sizes, from small, medium, large, and enterprise-size organizations, both in number of employees and annual revenue.
What the survey has created for this webinar is a series of topics that we're going to really dive into. Yes, the topics are based on some of the survey findings, but we're really going to have a conversational-style discussion on some of these areas, for example: What's different about your customers now than a year ago? How has your customer strategy evolved? How are you better driving your supply chain? What does your supply chain look like in terms of agility and resiliency? Then we'll dive into smart manufacturing.
After we get through that, we will have a discussion — really looking forward — on what are our panels going to be focusing on? Again, coming out of the research during the height of the pandemic. At the time, there were clear top three priorities that the consumer goods organizations were articulating to us that they're focused on.
No. 1 priority, which makes sense at the time, was the health and wellness of employees. While I'm sure that still continues to be a priority, it'd be interesting to have the discussion on what the other priorities are.
The second priority, post-COVID-19 recovery and financial liquidity — that speaks to the dire nature of the time that the survey was conducted.
Then, thirdly, supply chain resilience. That was by far, for CGT, one of the top topics of discussion that we were having with the industry.
So as we look at that, Harris, I'm going to turn things over to you and have you kick off some of the more drill-down categories that we are going to be discussing in the rest of the webinar.
Fogel: Thanks, Albert. First I’d like to ask Shubham: These were the priorities that we saw early on in the survey, the last six months or so. We know things have changed, the vaccine's out there, we're seeing a decline in the hospitalizations and recovery somewhat. How have the priorities shifted for your organization? Were there a couple of things from the Mars perspective, that fast forward to today and looking out a few months you're focused on now?
Mehrish: Yeah, it's been very fascinating for us, a very interesting journey. As I mentioned, we have two quite different businesses and both are high-scale businesses — in confectionery and pet care. As some of you may have been following, just about everybody that I know has a pet now. So, there's a massive amount of tailwind on our pet care business, while our confectionary business has some headwinds. People aren't going out and about as much, we have a huge commitments business, which is obviously challenging, people are not meeting people.
We are seeing a very clear divergence in how we are gearing up to respond to some of these changing facets of our business. As things stand today, our priorities are largely — at least my priorities — around marketing transformation and new business model creation. What I mean by those is, on the marketing transformation side, how do we rethink impulse? How do we rethink change in mobility and consumer patterns? What pattern impacts our business? How do we shape marketing around that?
In terms of the new business model creation, it's all about direct-to-consumer and e-commerce, are we geared for it? What's our technology strategy, our AI strategy to cater to that, and our marketing strategy as well? It's been a very interesting shift of potential from health MLS, financials, hunker down to now we're looking at the future and seeing what's the new normal, and what do we do differently?
Fogel: Thank you. Jon, from the Conair/Cuisinart side, what are you guys focused on now versus where you may have been focused 6 months or so ago?
Harding: We're still focused on some of the things you mentioned, Harris. Obviously, employee health and wellness are very important to us. We were able to keep our warehouses open throughout this period, so it's been critical to look after our employees in those facilities. I would say for the last 12 months since this started, we've been responding to the uptick in online purchases — online purchases through our great retail partners, all of our online retail partners, our omnichannel retail partners, and to a lesser extent, our own direct-consumer sales.
A lot of our focus has been enabling all of that. We're making significant investments in warehouse systems and even do a better job around fulfillment. We were doing good before, but the increase in the smaller packages has obviously caused us to invest more. Our supply chain and many of our products are manufactured overseas, so we've been weathering some of the charts, some of the shipping challenges, the container shortages, commodity shortages, etc. There’s lots going on; it has definitely accelerated our digital transformation.
Fogel: That's absolutely a key theme, right? What do they call it? Five-to-one — 5 years of acceleration and one year — absolutely makes sense. Jon, I heard a CNBC interview with David Taylor of Procter & Gamble last week, and he talked about the dynamics of the changing consumer over the last year. At the beginning of the pandemic, he mentioned that people were pantry loading and hoarding.
Now, fast forward, consumers aren't doing that anymore, but they're consuming more consumer products. That was obviously in his business. What have you seen from a consumer perspective from your business? Have you seen a change in behavior? Obviously, you had mentioned online, but any other changes you have seen?
Harding: Well, similar to what Shubham mentioned. In certain categories we’ve benefitted from this, particularly people being at home and cooking more. Cuisinart has fantastic products, which we've seen a lot of demand for. Early on, we saw a rush on hair cutting kits, I guess that didn't go so well for some folks, so that flattened out a bit now.
We've also seen the need to not just be able to meet our consumers online, but also have great consumer experience throughout. So throughout the path to an online purchase, but also post purchase. We're investing in overtime, improving our post-purchase consumer service capabilities. It's definitely caused us to examine all aspects of our consumer interactions.
Fogel: Very good, thanks. Shubham, from the Mars' perspective, and you probably will have two different perspectives as well on the pet care side and the confectionery side, what are you seeing from a consumer behavior perspective?
Mehrish: Yes, as I mentioned, our pet care business is booming. For those of you who are not aware, Mars has an end-to-end ecosystem of pet care businesses — we are in everything from DNA testing for dogs, to a Fitbit for dogs (a product called Whistle), to pet food. Some of our brands, Pedigree, IAMS, etc., in the U.S., Whiskas and such. Then we also have a huge portion of our businesses with hospitals, so if you think about it, we're a lifecycle pet care business, and each and every element of that business is growing as consumers have more and more pets.
What we are seeing and facing is what happens when consumers start going back to the office, right? What do they do with their pets? What that means is maybe pet services will grow around grooming and dog walking, etc. It's going to be pretty fascinating to see how consumer behavior changes as people become more mobile for our pet care business.
On the confectionery side, I think it's going to be quite interesting. It's still early days yet, and since we are not a public company, you may have seen harsher results. They have reported reasonably strong reserves. It seems that people are coming back to old habits, so we will see that pick back up in that business.
But we are still seeing some elements of battery loading, to be very frank. It may be a change in behavior, frankly, where people are buying more in bulk as an example, and buying more online. On the pet care side, it's more subscriptions now. Subscribe & Save is going through the roof on Chewy and Amazon, as an example.
Fogel: Right, that's great. As a VCA CareClub member thank you for keeping my pet safe. We appreciate that perspective. Let's stick with you for a minute, and probably maybe more on the confectionery side, but I'll let you decide. We're seeing channel shifting, obviously, from a consumer perspective.
I was speaking to one of our CIO customers last week, and they happen to be in the beverage alcohol business. Before you didn't see a lot of direct-to-consumer in the beverage business, but now like Uber buying Drizly, you can get alcohol beverages delivered to your doorstep. Are you seeing any changes in that perspective as well?
Mehrish: Well, since your question is more on the confectionary side, clearly for us, there's a whole lot of impulse that's gone away effectively, right? Because if you're buying your products on Instacart, you don't usually go for that strip of gum at checkout anymore because you're buying it online. You don't see the physical availability and they're not in front of you. So clearly, I think, on the confectionery side we're still trying to figure out where this is going in that sense.
Fogel: Okay, very good. Jon, I think you mentioned that earlier, but from the channel shifting it seemed like you were seeing a lot more direct-to-consumer as well from your business. Any other shifts and channels strategy that would be interesting?
Harding: Similar to Shubham, we have some product categories which are partly impulse driven, like hair brushes and accessories. But again, people might pick them up at their favorite pharmacy and there's obviously been, in some places, less store traffic. We've seen that impulse effect a little bit. Again, that was a big challenge, people don't buy a single set of barrettes online that frequently.
So, we're thinking about that. What kind of assortments can we offer? What can we do? How can we link this with other products we have? There are a lot of upselling and cross-selling opportunities that we're looking at. Overall direct-to-consumer, both our own and especially our retail partners, has increased greatly.
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Guffanti: It'll be interesting to hear from you how technology is playing a role in helping you decide which chess pieces to move and how to really identify these trends that may either be temporary or permanent as well. So we'll have that conversation in a few.
Lucca: Yeah, thanks. As I look back at some of the initial research on the supply chain lens, what really stood out is that companies who experienced far fewer disruptions are the ones that had maybe two key characteristics. First, more agility in their planning processes, and second, those who had deeper relationships with their supply networks.
What we've seen is agility being much greater than predictability, right? Being able to be more responsive than relying on historical data. If you think about it, 10 months ago we were throwing out historical data for supply chain planning purposes.
We've also seen a lot of doubling down in the market on demand sensing and leveraging things like external data. If you think back a year ago about the data that Johns Hopkins was putting out, you could effectively watch those impacts across the globe daily and begin to start to forecast where the next pinch point could be from a manufacturing and supply chain perspective.
Think about the supplier side. We talked about those supply networks, really the supply chains over the last 10 years have become much more global, trying to drive more efficiency and cost out. What we've seen is that the balance of supply chain risk with efficiency is becoming a bit out of skew. I'm seeing more of my clients drive things like local sourcing, having a better diverse set of suppliers across regions, and the ability to quickly shift source of supply if it's impacted.
It has really exposed that the supply chains are no longer linear and that they're truly more digital supply networks. Shubham, from a supply chain perspective, what have you seen as ways in which you've been able to stay agile?
Mehrish: Yeah, great question. Just for the benefit of others, Mars is a very proud manufacturer. Unlike some of our peers, we own over 80% of our manufacturing sites — we have over 150 factories around the globe, across our pet care, confectionery, and food businesses. This has provided us with a 100-year relationship with our supply chain, with farmers, with communities, whether it's cocoa, rice, or wheat, or any such crop, or meat products that go into our pet food business.
We've been blessed in that sense because while pet care was booming, it was all about getting supply through the door, focusing on a rationalized set of skills, a smaller set of skills that were flying off the shelves, and focusing on that customer service level that is desired for the pet care business. On the Mars side we always have had a nice balance of in-house manufacturing, and it is still largely that way. So from a supply standpoint, we've been pretty blessed, given our strategy in the past.
You mentioned demand sensing. What we have done over the last few years — and I can't divulge a lot here — we have leveraged artificial intelligence to ramp up the way we do demand sensing. That is paying huge dividends, especially at times of disruption, where we are adjusting Johns Hopkins case stamp data to predict demand for our products at a skill level. We've really amped up artificial intelligence and its use in demand sensing. Again, a combination of in-housing, in-house manufacturing, and AI-based sensing to help us keep on top of our supply chain.
Lucca: Thank you, that's awesome. It's great to hear more folks leveraging those external sources of information, which is really critical. Jon, you talked a little bit earlier about some of the challenges in the supply chain space around fulfillment, and shifting direct-to-consumer with packaging in your packet quantities — things like that. Anything else in the supply chain space, either on planning or supply, that you've experienced?
Harding: Sure, we're very fortunate that we have a great relationship with our strategic suppliers of finished goods. We co-develop products with those buyers — we’re the opposite of Mars, in that sense. Now those relationships, which are very long-term, have been critical during this period for us to cope with. First, disruption at the point of manufacture, which is mainly in Asia. Then, the disruption as the pandemic arrived here in the States or in Europe. We've been able to balance that by working with our supply chain partners.
From a planning perspective, we're investing in newer planning systems right now to try and improve our use of external data. We still rely a lot on getting data from retail partners, which is helping us on the demand side, as well as the traditional market research data from the likes of IRI, Nielsen, and GFK. However, we're definitely using newer toolsets internally to analyze and respond to that, so we've made a lot of investment around all of that.
Lucca: I think that will continue to come, right? As we talk about making those investments, I'm reminded of the quote from one of my client CEOs, who always reminds his leadership team that the pace of change will never be less than it is today. We've seen this acceleration in level of change and that's really driven through the consumers and through technology. As consumer trends get shorter and technology enhances our ability to influence those trends, that rate of acceleration just grows exponentially. It becomes a challenge to remain current, so investing in those technologies early is important.
Another thing in the research that we've seen, and I think we can all feel it, the overwhelming majority of CP companies have said that they're really doubling down their investment in technology on the shop floor. That could drive a bunch of things, right? It could be to drive employee safety, manufacturing efficiency and flexibility, quality and regulation, adherence, getting better data, and more predictability on the shop floor.
In general, we see that more companies are moving towards what we would call a smart factory. A lot of companies have completed pilots or POCs in the space long before the pandemic scaling things from whether it's sensors and getting into IoT, or robotics. A lot of companies have focused on analytics and leveraging sensor data on the shop floor to get better predictability through analytics. We have invested tremendously in actual smart factories and labs that we've built out physically with a bunch of partners.
We're actually leveraging industry 4.0 technologies, partnering with different tech vendors and universities to develop that into a tangible vision of what a smart factory looks like. Over the last 10 months, this has accelerated the need for what our clients want in that space. It is now, and will continue to be, a game changer for agility. Jon, I know a lot of your manufacturing is third party, but anything from a sensing perspective IoT that you’re investing in coming out of this?
Harding: Yes, we're definitely investing in warehouses to get more productivity tracking, data about picking, about parcels, etc. This helps us to do the best job we can to fulfill as fast as we can. That would be our focus in this space.
Lucca: Great. Shubham, anything from your side on smart factory?
Mehrish: Yeah. Since, we own a lot of our manufacturing sites it's easier to make change happen. We’ve been retrofitting most of our sites with sensors. Now that we have the sensors in place, we are working with a couple of our partners to build the technology tools to leverage that data because there's a whole firehose of data that we're getting. The typical use cases so far are predictive maintenance line changes, quality and food safety controls.
As an example, we have image recognition software running to figure out issues with Skittles: size and color, the mix in a pack, the right blend of colors, etc. We're doing a lot of interesting things there, and we can scale quickly because we own all our plants. We've also been experimenting with augmented reality and other technologies to train factory staff, as an example, online changes and such. I would still say that's in the pilot phase, we haven't really rolled it out as aggressively as the sensor pilots.
Lucca: Perhaps maybe the next step is the warehouse, as well. We've seen a lot of great use cases with augmented reality in warehouse ops to ensure better accuracy. Albert, I'm going to hand it back to you to look into the crystal ball.
Guffanti: Thank you very much, Joe, and thanks, everyone. Fascinating discussion so far. My question here is, as you mentioned, the crystal ball. I recall one of our first webinars that we did about a year ago within the “Curb the Panic” series. Shubham, it was Sandeep Dadlani, your chief digital officer, who was one of our panelists.
He said at the time, there's going to be three types of organizations: The ones that stick their head in the sand and hope this all goes away; the organizations that are organized and hope to really make the tweaks and incremental changes to their business in hopes that the pandemic isn't too disruptive; and then the third type, who are identifying micro trends, looking at the crystal ball, and completely transforming their businesses.
Clearly, Shubham and Jon, it's safe to say that you fall into that third category. As you look at 2021 and beyond, what are some of the groundbreaking or innovative things that you're looking to introduce and implement as a result of this tectonic shift that we've been through? Shubham, let’s start with you.
Mehrish: Sure, I’ve talked about a couple things already. The work that we're doing in the factories, from a supply chain standpoint, is definitely one of those — we have a huge amount of CapEx every year in our factories.
The second is the demand sensing work that I talked about, which is AI-based sensing that is pretty breakthrough. Then a lot of my focus is on new business models and marketing transformation. If you think about it, when was the last time you watched linear TV and it wasn't a sports cast? You scratch your head to think about it — when was the last time your connected TV was ad supported? Netflix isn't ad supported.
It's a fundamental transformation that we are facing for most CPGs. How do you reach consumers with marketing and advertising budgets? How do you build that mental availability with your consumer base given how regional channels are fragmenting? Then, new business models. We are experimenting with a lot of new business models, everything from direct-to-consumer, e-commerce, and more traditional omnichannel models.
Our retailers are innovating and we have to stay in-step with them. Walmart is truly becoming an omnichannel company, and I have to move my assortment, my supply chain to keep in-sync with that. A lot of interesting things that we are facing and happy to go into details.
Guffanti: Thank you very much. Jon, what about you?
Harding: Yes, we are very focused on all aspects of supporting our direct-to-consumer business and our retail partners direct-to-consumer business. That's everything to do with marketing to individual consumers, everything to do with getting all of the content ready that's needed for our partners’ sites and our sites. We've put a lot of time into product information management, making sure people can get the images, making sure we have the right video content, a lot of effort around that, and then the core direct consumer itself.
Not only have we got more direct-to-consumer capabilities on our websites, we've also experimented in our professional business, which is where we sell high-end, heavy-duty haircare products to stylists. There, we've actually had a lot of success with an app that allows a stylist to customize that tremor. They can pick their blades, choice of components, and that's custom built. It's a nice way you can rotate the item on the screen using various video capabilities as you pick and choose how you want it to lock, which for someone that uses that equipment all day is obviously a very interesting opportunity.
That kind of personal customization, we've been experimenting in that area and seeing a lot of success. It's a tremendously exciting time as we look at how do we sort of grow our direct-to-consumer business while also still partnering with all of our retail partners and enabling what they want in terms of content, communications between our systems and their systems?
Guffanti: I noticed that. Both you and Shubham mentioned your relationship with your retailers and this is actually one of the questions that came up. If you were able to succinctly categorize your relationship with your retailers now compared to a year ago — more collaborative, more trusting, more alignment, all three, something else — how would you categorize it?
Harding: You're talking to the IT guy here, but my sense from being closely partnered with my sales colleagues is that it's improving, definitely. It's more collaborative, there are things where I get involved on data — we're getting more data than ever from partners, more direct links than we have ever had before web retail. So definitely improving. It's exciting, for those of us who've been in the industry for a long time and believe that growth for everyone will come through partnerships. So yes, that’s definitely improving.
Guffanti: Shubham, would you agree on that?
Mehrish: Yes. The relationship with retailers for us has always been based on a principle of mutuality. We have five principles you can find on our website, this being one of them. I agree with Jon, we're getting more and more closer because we are realizing we are in it together.
Not all retailers are actually coming out at the other end the same way. We have our JBP process — which is the joint business planning process that happens once, or now, multiple times a year — becoming much more analytical, data focused, solution focused, as opposed to render focused. We see a tremendous change in how we work with our retailers, frankly.
Guffanti: Terrific, thank you for that. It seems like a lot of our audience is focused on e-commerce, and you've both mentioned how that has changed. The common question is: realizing e-commerce is growing and is more of a factor now, how aggressively do you turn that e-commerce dial? Do you go all in? How do you manage that with your retail channel? How does DTC come into that?
Let’s start off with how aggressively do you really turn that e-commerce dial knowing that it's a high growth area at this point? Shubham, I'll start with you.
Mehrish: This is an interesting one. You have two kinds of players in e-commerce now. There are the pure players and the omnichannel players. Obviously, with omnichannel players, there is really no conflict because we are helping the omnichannel player (be it Walmart, Target, whoever), to actually succeed. So, yes, we are all in on e-commerce. We suspect that e-commerce sales will quickly become 30% of our business, definitely for pet. Confectionery may follow depending on how well we do from an assortment standpoint and consumer behavior standpoint. We are really accelerating the e-commerce economy.
Guffanti: Jon, what's your take on that?
Harding: I would say we are all-in. We define e-commerce as, one or two really, our own direct-to-consumer sales, but bigger and number one is how we support the omnichannel retailers and the pure-play online retailers.
One of the ways we're doing that is for certain types of products and orders, fulfilling directly out of our facilities to the end consumer on behalf of those folks — so-called dropship — to consumer. That's another aspect of this, it has grown tremendously for us during the last 12 months.
We had these capabilities before and we were doing it for some folks, but that's definitely grown. I think that's an example of where the partnership is closer, because it requires a much greater degree of integration. Of course, that makes us an omnichannel shipper, so that's another reason we're investing in our warehouse technologies all the time
Guffanti: Interesting, thank you. Next question for both of you. When you think about the shift and the topsy-turvy nature of things, there's got to be disruption everywhere, including your competitive landscape. As you look at that, how has that changed at all? Have you noticed smaller competitors that may be more agile rising up a little quicker, or capturing more share? Are there new categories that are opening up? How does the competitive landscape in your business emerge with all the transition that's happening? Shubham, I'll start with you on that.
Mehrish: I think it's interesting. In the beginning we saw that the less well-capitalized competitors really faltered because of the pandemic, but now things are getting stable. We are seeing some consolidation in our competition and we'll see more of that — you see winners buying the losers or smaller companies. I think we're starting to see, in pet care, the emergence of a new set of competitors because of the high growth of that category.
I suspect we'll see a higher competitive intensity in the pet care business than the confectionary business. That's what I see. I do see a competitive intensity going up in the high-end confectionary business and high-end chocolate business, which has been the trend for a while, but I think it's going to be much higher in the pet care side with lots of M&A activity going on as well.
Guffanti: Thank you very much. Jon, any insights from you on that one?
Harding: I think we've seen things stabilize. We were fortunate to have the number one leading position in a lot of our categories and some of our brands are very strong, particularly here in the U.S. — Cuisinart being the obvious one. So we definitely have not succumbed to any competitive challenges.
Guffanti: I think we have time for one more question. Now that impulse purchases may have waned a little bit, how do you manage the gap there? Is there anything that you're doing to stimulate impulse purchases, via e-commerce, etc.?
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Mehrish: I think the second half of the question, I think we and our competition have tried in the past to do impulse through digital. That's always been a challenge, because it's hard for the instant gratification not to be there — you’re asking somebody to add a Snickers bar at checkout when they'll get it the next day — it's always a struggle. What's happening, interestingly, is that somebody will step into the void, not just from a manufacturing standpoint, but from a retail standpoint as well. Let me give you an example.
I don't know how many of you have come across Gopuff. Gopuff is a retailer that is available in over 200 cities in the U.S. and they promise 30-minute delivery at $1.95. That's a player that's going into the convenience and impulse channel and trying to fill that void through an online microwarehouse-type setup, or micro-fulfillment setup near big cities.
We suspect activity on both sides. On our side to think through impulse differently and bundle things differently maybe partner with players like Uber Eats to push confectionery as an example. But I am also seeing activity on the retailer end, where new cares will emerge to solve for impulse because it is a big category.
Guffanti: Jon, is it less so on your side, or are you having to manage impulse as well?
Harding: Impulse for us is mainly in our hair brushes and accessories category — like Scünci the original scrunchie, for example — they’re similar to assume. We're working on how to develop assortments that are cost effective for people to order online, and how do we pick up on this? We are fortunate because the people are still going to pharmacies, and so on. So we still have impulse, it's just not quite the same. We've definitely lost impulse in some stores.
Guffanti: Well, thank you, gentlemen. Harris and Joe, I want to give you the last minute. If you have a last word or observations on the webinar, feel free to chime in.
Lucca: I'd just like to say, first and foremost, thank you so much to you and your team for hosting us, and to Shubham and Jon, great insights from both of you. To what each of you and your organizations are seeing, very consistent with what I'm seeing, as well as some of our other clients in the market. I really appreciate your time today.
Fogel: I agree completely, great dialogue. Fascinating to hear what's happening with artificial intelligence and how you're leveraging that to improve the efficiency of the organization. Then, obviously, leaning in on the channel shifting and where the consumers are going. There's so many other questions we could have got into. Would have loved to ask you about product innovation — how you're getting consumer feedback to innovate? We know that's a critical element and then we're all concerned about sustainability and where is that going into the organization? How do we focus on the social economy?
But listen, this was fantastic, I look forward to the follow up. Thank you to everyone, and thank you to Albert and CGT.
Guffanti: Yes, I echo that, there’s certainly no shortage of topics for us to discuss. Unfortunately, that is all the time we have for today. I want to thank all of our panelists for your time, your insight, and everything you contributed to today. I also want to thank everyone for joining us, I hope it was a valuable use of your time. Have a great rest of the day — be safe and be well.