2019 “Better for You” CPG, Retail, and Grocery Awards
Welcome to the 2019 J. Schall Consulting “Better for You” CPG, Retail, and Grocery Awards Show. This is the pinnacle of award shows that are light on tradition, peppered with randomness, and heavy handed with personal bias.
Before we get started, there is a few things to know about the 2019 J. Schall Consulting Awards…
- Categories were selected at random and will likely change next year.
- Winners were not selected at random. They were thoughtfully selected (by a prestige panel of one) and educational value will be provided as I explain my logic behind the winners.
- If any winners would like a trophy, please contact me and I will write something nice on my business card. To make it extra special, I will also frame it for the perfect headquarters entry way display piece.
But…without further ado, let’s give out some totally random “Better for You” CPG, Retail, and Grocery Awards!
Best Acquisition by a Strategic for a “Better for You” CPG Brand
Winner = PepsiCo acquisition of Cytosport
I like this acquisition for three main reasons; price, category growth, and complementary offerings. Firstly, I think the $465 million price point was good (teetering on great), as it was only $15 million than what Hormel Foods originally bought the company for in 2014. Secondly, convenient nutrition and protein RTD beverages are growing close to double-digits YoY. As PepsiCo expands Cytosport’s Muscle Milk brand into its full scale of distribution points, it should see immediate growth from its estimated $300 million in sales over 2018. Lastly, I like the pairing with Gatorade and how many options they can leverage together from marketing to product development. (Note: I also think the Evolve plant-based brand that accompanied Muscle Milk will end up being a huge PepsiCo “better for you” brand)
Runner-Up = Simply Good Foods acquisition of Quest Nutrition
Best Acquisition by a Private Equity for a “Better for You” CPG Brand
Winner = VMG Partners (through the creation of Velocity Snack Brands) acquires popchips
I have been a fan of VMG’s investments in the “better for you” CPG world for quite some time and really loved them going deeper with the creation of Velocity Snack Brands. This platform will acquire, incubate and grow a portfolio of leading snack brands, which they started with popchips. popchips has good visibility and recognition in the market, while also having some compelling product extensions. (Note: VMG Partners also had high-profile exits this year of “better for you” brands Quest Nutrition for $1 billion and Drunken Elephant for $845 million.)
Runner-Up = Butterfly Equity acquires Bolthouse Farms
Best Overall M&A Activity in the CPG Space
Winner = PepsiCo
PepsiCo was active with three major acquisitions in 2019 (which built on three more from 2018. The food and beverage CPG giant bought Cytosport, BFY Brands (maker of Popcorners), and Pioneer Foods. Pioneer Foods was their biggest acquisition of the year and gets them more access to the emerging market of Africa.
Runner-Up = Butterfly Equity
Best Grocery Retailer of the Year
Winner = Kroger
What I liked best about Kroger was their enthusiasm to test, test, and test some more, which is a deep-rooted ethos of winning in today’s business landscape. They had so many major announcements, such as a strategic partnership with Walgreens, investing deeper in its Restock program, launching a new experiential store design in Cincinnati, and announcing more Ocado warehouses.
Runner-Up = Walmart
Best Retailer of the Year
Winner = Nike
yes they are a brand first, but Nike has done an amazing job in making themselves a D2C retailer that is controlling its own destiny, they have built out compelling apps for sneakerheads, experiential stores, giving the middle finger to Amazon because it wasn’t net-net positive for them on what they needed out of partnership)
Runner-Up = LuluLemon
Best Internet Retailer of the Year
Winner = Shopify
I could have said Amazon since that Death Star is more impressive every year, but the moves that Shopify made this year like acquiring 6 River Systems a robotics start-up to help with its fulfillment network is really impressive on top of its now being THE online platform for small businesses push to DTC
Runner-Up = Amazon
Best Experiential Store Design
Winner = Nike’s House of Innovation
If you are going to give up the convenience of e-commerce, physical retail needs to be special. Nike’s House of Innovation is special! This is customization to the extreme and its the epitome of creating an exclusive experience. Shoppers have access to customize everything from apparel to shoes and get personalized advice from Nike Experts that will shop for you based on your tastes. Nike has integrated technology into all friction areas of the traditional shopping experience, such as searching for sizes or finding the complete look shoppers see on a mannequin. In my opinion, this is peaking into the future of retailing…
Runner-Up = Starbucks Reserve Roastery
Top Retail CEO of the Year
Winner = Chipotle’s Brian Niccol
In early 2018, Brian took over as CEO of Chipotle during a time of great need when the fast-casual restaurant was dealing with food safety issues. Chipotle was lost, but Brian turned the restaurant around through freshening up the menu, launching a rewards program, and adding omnichannel technological advancements that have them growing digital business at close to 100% YoY to close to 20% of their total business. He also was able to bring back the stock to its peak before the food safety issues.
Runner-Up = Target’s Brian Cornell
Best “Better for You” Retailer Private Label
Winner = Target’s Good & Gather
Though Good & Gather didn’t launch until late 2019, I believe it drastically changes how all retailer’s approach “better for you” CPG private label in the future. Target showed that it’s no longer about copying the best-selling branded products, its about having your own identity and approaching all the products in a way that aligns with the retailer’s brand.
Runner-Up = Kroger’s Simple Truth
Best “Better for You” Beverage Brand
Winner = Kitu Life Super Coffee
This “better for you” beverage is exploding in distribution points, sales velocity, and social media chatter. While 2019 was a huge year, I predict you will be seeing it everywhere, if you haven’t yet, in 2020. Super Coffee hits on several popular “better for you” product trends by adding protein, high quality MCT fats, and coffee (which is still the functional beverage king).
Runner-Up = OWYN
Best New “Better for You” Beverage
Winner = Recess
While this CBD beverage officially launched in late 2018, Recess has been my 2019 example of what CBD brands, regardless of product format, should aspire to be. Recess have great packaging, strong brand messaging, innovative product attributes, and marketing tactics in a space that is hard to operate in right now.
Runner-Up = Monster Energy Java Monster Oat Milk
Best “Better for You” Food
Winner (tie) = Beyond Meat & Impossible Foods
This was the year that everyone became enamored by alternative meat companies. After Beyond Meat became publicly traded and the stock skyrocketed, consumers wanted to try it and big CPG portfolios wanted into the alternative meat market. While Beyond Meat has the financial market buzz propelling it, Impossible Foods might have had the bigger strategic partnership for the alternative meat market with Burger King offering an Impossible Whopper.
Runner Up = Kind Snacks
Best New “Better for You” Food
Winner = RightRice
It seems every few years the public hates on a subset of macro-nutrients. In 2019, it seemed to be carbohydrates and specifically starchy ones like pastas, rice, and bread. RightRice is the perfect product to leverage that consumer carbohydrate hate because they swap vegetables for traditional rice. I also really enjoy the clean packaging, strong entrepreneurship team, and added elements of being a purpose-driven brand.
Runner-Up = Oui by Yoplait
Most Powerful “Better for You” CPG Trend
Winner = Flexitarianism
It is hard to imagine a more powerful trend in the “better for you” CPG market than flexitarianism. Flexitarians are defined as actively and purposefully moving away from a consuming and purchasing animal-based products. This lifestyle movement is driving only food CPG, but every category. Flexitarians forced CPG portfolios to re-think product development maps and every aspect of their business. While the percentage of vegan/vegetarian U.S. households will not rise significantly, popularity of flexitarianism is creating a massive difference in purchasing habits collectively that will show up in the CPG industry for many years to come.
Runner-Up = Sustainability
