With special thanks to Siemens for sponsoring the research and interviews required to present this innovation special section.

GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 111 A Survey of Astonishing Accomplishment

To some naysayers today, “CPG What do you see?

innovation” is an oxymoron, but in fact Everywhere you look, you –– we –– see CPG products that nothing could be further from the truth. make our lives easier, cleaner, lighter, brighter, safer, better nourished, more satisfying and, in so many ways, sweeter. The breadth, depth and variety of innovation in product, formulation, packaging, manufacturing, marketing, distribution, What did our grandparents see? Well? business process, collaboration and co-invention that has characterized CPG for more than a century –– and that is What is the difference? occurring inside hundreds of companies as you’re reading this –– is nothing short of mind-boggling. The difference is a century of explosively creative response to consumer needs. In a word, innovation. Why is it that this remarkable record –– this staggering difference between our choices and those available to our So, this year, 2008, the 100th Anniversary of the Grocery grandparents or great-grandparents when they were our age Manufacturers Association, we celebrate this astonishing –– doesn’t take our breath away? CPG century with a decade-by-decade overview of a barely representative few of the thousands upon thousands of remarkable THE CPG CENTURY Only, perhaps, because we are, as psychologists might say, CPG accomplishments over the past 100 years –– innovations that “habituated” –– we have lost our sense of wonder because we cover the CPG spectrum from products and advertising we recall Years of live with all these options every day. from childhood to packaging and merchandising innovations 0 remaking today’s store to business systems and processes that will Consumer In the kitchen, flip a light switch –– a new CFL, say. Open serve as the springboard to CPG’s future. the refrigerator, the cupboard, the spice cabinet, the bread Packaged Goods box, the storage drawers, the pantry. Look in the laundry As this survey shows, if CPG has a creativity challenge, it 10 room, the medicine cabinet, the shower stall. Peer under the is that, over the past 100 years, it has set itself such a high kitchen and bathroom sinks. Check the desk, the toilet tank, standard –– an uphill climb for any sector. the trash compactor. Think about the garbage bin, the broom closet, the baby’s bassinet, the bird feeder. Consider the car, Indeed, after reading these pages, you, too, might well the cat box, the canine cookie jar. Glance in the mirror at conclude that a synonym for CPG is –– innovation. your smoothly shaved face, artfully enhanced eyes, youthful colored coif. In 2108, may we all look back on 100 years more. INNOVATION – Carol Fensholt, Editor & Publisher

112 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 113 “In fiscal 2007, we improved our innovation process. We have THE CPG CENTURY enhanced our ability to take creative concepts and turn them Years of 0 into successful products that capitalize on our branded portfolio Consumer Packaged Goods and reflect the marketplace trends we have identified.” 10 INNOVATION Richard G. Wolford, Chairman, President and CEO, Del Monte Foods s 1910

1909 1910 1911 1912 1913 1914

A decision in 1909 to Albacore tuna is In 1910, McCormick & Company Crisco, the first Del Monte In 1912, the National Five entrepreneurs Morgan Foods In 1914, the Wrigley contract with farmers for discovered in seasonal becomes one of the first producers shortening made replaces Biscuit Company invest $100 apiece in purchases its first Company introduces growing crops, rather than abundance off the of tea in gauze pouches, entirely of vegetable hand-soldered introduces the Oreo 1913 to set up the first truck in 1913 to ship Doublemint in the U.S. renting or leasing the land coast of in introducing tea bags to the oil, is produced by containers with cookie. The innovative commercial-scale product. By the 1930s, It goes on to become from them, assures Lakeside 1910, and the Bumble marketplace. Procter & Gamble “sanitary” three- combination of two liquid bleach company they become the one of the world’s most Foods of higher quality raw Bee brand is born. in 1911. Since it piece cans in chocolate cookie disks in the U.S. Four years nation’s largest private popular chewing gums products since farmers doesn’t contain 1911, ushering in with a crème filling later, they develop fleet operator with with sales in more than who grow vegetables for animal products, the the era of modern, goes on to become the a less concentrated more than 200 trucks. 150 countries. them are now paid extra for shortening is suitable mechanized best-selling cookie in version for household producing higher quality, for vegan and kosher . the U.S. use, and the Clorox more saleable product. diets. brand takes off.

114 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 115 “Pappas feels strongly that investment in innovation is essential. We want to pass on

“We’re taking a strategic approach to THE CPG CENTURY the business to the next generation as an Years of our businesses globally, with a focus on 0 innovative, efficiently-run enterprise, primed Consumer building brands, fostering innovation and Packaged Goods partnering with customers.” for whatever challenges the future brings.” 10

Tom Falk, Chairman, President and CEO Dean Pappas, CEO, Clement Pappas & Company INNOVATION Kimberly-Clark Corporation

Signatu re with OUTLINE version Symbol s For overall widths of MORE than 2 inches (Symbol is SMALLER in relation to type) 1920

1921 1924 1925 1926

For overall widths of LESS than 2 inches (Symbol is LARGER in relation to type)

1-Color 2-Color Machine wrapping is Since 1921, Betty Crocker Kimberly-Clark In the early 1920s, a Lever Brothers After studying Eskimos in the Arctic PMS PMS PMS In 1924, Mars introduces Clement Pappas Black 542 425 introduced into the production has symbolized a tradition (orCorporation other single PMS color) introduces cooperative is formed that launches its Clean Milky Way, the first of initiates cranberry and observing that food which is process for Hershey’s Kisses of service to consumers. a disposable cleansing makes butter from fresh, sweet Hands Campaign. three candy bars that processing in 1925 rapidly frozen at extremely low in 1921, with technology also The name of this fictitious tissue called Kleenex cream instead of sour cream, Part of a child health become part of America’s and pioneers the temperatures retains its freshness employed to add the signature First Lady of Food has to remove cold cream and sells it in one-pound policy, it educates confectionary culture. commercial production and flavor, Clarence Birdseye forms plume to the top of the foil become synonymous or makeup instead of packages with individually children about dirt Three Musketeers and of cranberry sauce. the General Seafood Corporation to signify to consumers that with helpfulness, using face towels. It wrapped sticks instead of in and germs and Snickers follow in the (a predecessor to Birds Eye Foods) it is a genuine Hershey’s trustworthiness and quality, also advertises Kotex, tubs. In 1924 a contest is held encourages them next decade. and unveils his “Quick Freeze chocolate. This plume proves and a major brand asset for its disposable feminine to name the product, and the to wash their hands Machine” in 1926. He then focuses to be so popular that it is General Mills. hygiene pad, in Good brand Land O’Lakes – a tribute “before breakfast, on marketing, entering into a joint trademarked in 1924 by The Housekeeping magazine, to Minnesota’s sparkling lakes before dinner and venture to make refrigerated grocery Hershey Company. initially offending readers. – debuts. after school.” display cases for his products.

116 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 117 “Virtually every consumer product company talks about innovation. The hard part is turning the talk into meaningful results. Our product innovation process has been THE CPG CENTURY completely reinvented. It results in rapid identification and development of fewer, Years of bigger and better ideas. Our innovation parameters are quite clear: Ideas that are 0 Consumer sticky…Ideas that expand our margins…Ideas that play our inherent strength in health Packaged Goods and wellness…Ideas we can own, arising from unique technologies we protect.” 10 INNOVATION Gary M. Rodkin, President, CEO and Director, ConAgra Foods s s 1920 1930

1927 1928 1929 1930 1933 1934

Edwin Perkins modifies At the advice of her In 1929, Hector The modern system of In the 1930s, the Three cranberry A schoolteacher decides to In 1934, Campbell Soup a soft drink syrup called pediatrician, Dorothy Gerber Boardi, an Italian brand management is Tasty Baking growers who want supplement his $65 monthly salary introduces Chicken Fruit Snack in 1927 by struggles to hand-strain immigrant and chef developed by Procter Company, looking to expand the in 1933 during the Great Depression Noodle and Cream concentrating it into a foods for her seven-month- at a restaurant in & Gamble in the early to capitalize on the market for their by selling pepper seeds. Now of Mushroom soups, powder. He packages it in old daughter. Her husband, Cleveland, obliges 1930s and remains the country’s penchant crop come up with a America’s largest producer of varieties that continue to envelopes and changes Daniel, moves the process customers asking standard for consumer for economy, new and innovative pimentos and bell peppers, Moody be two of the company’s the name to Kook-Ade to his Fremont Canning for jars of his tomato product companies launches individually- product made Dunbar vegetables are fresh three top-selling soups (and then Kool-Aid), which Company and, by late 1928, sauce to take home. He today. The system calls packaged, lunchbox- from cranberries, processed from proprietary seed sold to this day. The third ultimately becomes a pop- the first commercial baby adds pasta and other for one person to be sized pies. At a nickel introducing Ocean stock and employ proprietary is Tomato soup, which culture favorite for Kraft. foods from Gerber are ready ingredients, and Chef in charge of a brand a piece, Tastykakes Spray Cranberry roasting methods to carmelize the debuted in 1897. for the national market. Boy-ar-dee products and head up a team to are immediate hits. Juice Cocktail in 1930. natural sugars and give them a from ConAgra Foods market it. smoky, sweet flavor. are born.

118 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 119 “The twin pillars of success over the 116-year existence of Hormel Foods have THE CPG CENTURY been “Innovation” and “Quality.” Innovation includes the creation of flavorful and Years of convenient products by teams of employees, and it also includes technological 0 Consumer innovation aimed at enhancing food safety, improving work processes and Packaged Goods streamlining customer service, among other things.” 10 INNOVATION Jeffrey M. Ettinger, Chairman, President and CEO, Hormel Foods s s 1940 1930

1936 1937 1939 1940

In 1936, Oscar Mayer The world’s first instant McCormick & Kraft Macaroni & The first can of The J.M. Smucker E & J Gallo Winery’s commitment to Niche marketing makes its first & Co. rolls out the coffee is developed Company develops Cheese dinners debut SPAM luncheon Company’s apple protecting the land and enhancing appearance when Pepsi-Cola Co. President Wienermobile, an by Nestlé in 1937 and new metal in the U.S. and meat is produced butter jar receives wildlife habitat through sustainable Walter S. Mack makes an historic early mobile marketing branded Nescafé (a containers for its in 1937. Initial success in 1937. With The Wolf Award in agricultural practices originates marketing decision: to hire Pepsi’s first vehicle that promotes combination of Nestlé spice line in 1937. is due to rationing of America’s entry 1939 at the National with the Winery’s co-founders in black salesmen to target black consumers. the company’s hot dogs. and café). It becomes a The innovation milk and dairy during into World War II, Packaging Show for the late 1930s. In 2005 the company Blacks were then a consumer market staple beverage of the wins seven national World War II and Hormel provides best packaging. is recognized as the first U.S. totalling $8 billion, yet most corporations U.S. armed forces during packaging awards consumer demand 15 million cans of winery to receive the International never considered the demographic in their World War II. for the company for hearty, meatless the product to the Standards Organization’s ISO 14001 selling efforts. Mack’s hiring of Herman T. over the next two entrees. troops every week. certification, a status created Smith as its first black salesman was so years. to assist companies in reducing unusual it was noted in the March 18, 1940 impacts on the environment. edition of The New York Times.

120 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 121 THE CPG CENTURY “Our solid performance in the year was the result of various factors… Years of These factors showcase the strength of our business strategy which 0 Consumer is based on an unwavering commitment to product innovation, brand Packaged Goods leadership and distribution strength…” 10 INNOVATION Daniel Servitje, CEO, Grupo Bimbo s s 1940 1950

1941 1945 1946 1948 1954 1955

In 1941, Mars Rich Products opens its Grupo Bimbo begins The first heavy-duty Dial is the first A St. Louis inventor In 1954, C.A. Swanson & Sons There were no fluoride Bush Brothers introduces M&Ms, doors in 1945 when Robert operations in synthetic laundry deodorant soap develops a special develops the first TV dinner toothpastes before Procter expands beyond which become a E. Rich revolutionizes food City in 1945 and goes on detergent quickly developed in the U.S. aerosol valve and consisting turkey, corn bread & Gamble introduced its core baked convenient snack processing by discovering to become one of the becomes the Introduced in the creates Reddi-wip dressing and gravy, buttered in 1955. The American bean products by for the U.S. armed that the soya bean can most important bakeries dominant brand in the market in real whipped cream peas and sweet potatoes. Dental Association soon developing canned, forces during be frozen, thawed and in the world due to its category. Procter & 1948, the name Dial in 1948. ConAgra The initial production order recognizes Crest as southern peas in 1955. World War II whipped. This leads to the production, volume, sales Gamble introduces is chosen because Foods expands to – considered a gamble – is effective in preventing because the candy introduction of the world’s and brand positioning in test markets the soap advertises national distribution for 5,000 frozen dinners that tooth decay, and it wouldn’t melt in first non-dairy whipped of over 5,000 products. in 1946 and begins “around the clock” in 1954. come in a box resembling becomes the leading changing climates. topping, Rich’s Whip A major innovation is national distribution protection against a TV and retail for 98 cents. brand in the category. Topping. adding vitamins and three years later. the odor caused by Swanson sells 10 million the minerals to its products. perspiration. first year.

122 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 123 “We take a global approach to innovation, expanding and adjusting our portfolio to meet consumer needs around the world. THE CPG CENTURY More than 270 new products or adaptations Years of of other successful products were “Innovation is an essential component of our long-term growth strategy. We 0 Consumer introduced in 2007 alone.” know Sara Lee’s future success will depend on our ability to keep the product Packaged Goods innovation pipeline full of exciting new ideas that cater to real consumer needs.” 10

David Mackay, President, CEO and Director, Brenda C. Barnes, Chairman and CEO, Sara Lee Corporation INNOVATION Kellogg Company s s 1950 1960

1959 1959 1962 1968

Orange-flavored Tang Procter & Gamble Throughout the decade, Kellogg In the 1950s and 60s, A handful of The slogan, “With a Becel, the pioneering Playtex Following the death of its debuts in 1959 as a develops the first Company launches several (part of orchardists purchase name like Smucker’s, “health” margarine, is introduces the founder in 1968, Juanita’s Foods sugared, powdered, disposable diaper in ready-to-eat breakfast cereals Cadbury Schweppes) Tree Top in 1962 and it has to be good” is launched after the medical first plastic decides to exit the fish canning non-carbonated 1959. features that become consumer favorites. becomes the first form a grower-owned coined in 1962. community asks Unilever applicator business and begin producing breakfast drink a unique three-piece They include Kellogg’s Corn major soft drink cooperative. Since its to develop a cholesterol- tampon in 1968. canned Mexican foods. from General Foods construction to absorb Pops, Frosted Flakes, Honey company to introduce inception, that handful lowering food product. Although canning traditional Corporation. Popularity moisture, distribute it Smacks, Coca Krispies, and sugar-free drinks and of orchardists grew, at At first, it’s only available Mexican foods is initially takes off when NASA uniformly, and transmit Special K, the first high-protein to package soft drinks one time, to be 2,500 from pharmacies. viewed as heresy by many uses the beverage on fluid to the absorbent breakfast cereal. Tony the Tiger, in cans. grower-owners in the Hispanics, Juanita’s grows to Gemini space flights a core without passing it a cereal icon, bursts on the states of , become the world’s largest few years later. back to the skin. scene as a spokescharacter for Oregon, and . manufacturer of menudo, a Frosted Flakes. popular Mexican stew.

124 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 125 “The greatest challenge for any “ is well-positioned for consistent business leader is we cannot see the growth in sales and profits as we continue THE CPG CENTURY future. Our greatest responsibility is to develop innovative healthy, great tasting Years of that, nevertheless, we must make wise and convenient foods across our core 0 Consumer decisions not just for our companies, categories and geographies where we have Packaged Goods but for future generations.” leading brands and strong infrastructure.” 10 H. Fisk Johnson, Chairman and CEO William R. Johnson, Chairman, President INNOVATION SC Johnson and CEO, H. J. Heinz Company

Signatu re with OUTLINE version Symbol

s For overall widths of MORE than 2 inches (Symbol is SMALLER in relation to type) s 1970 1980

1970 1972 1975 1976 1979 1981 1982 1985 1988

For overall widths of LESS than 2 inches (Symbol is LARGER in relation to type)

1-Color 2-Color

PMS PMS PMS Black 542 425 (or other single PMS color) Church & Dwight is Rich Products signs S.C. Johnson makes In 1976, Red Gold Dr. Anthony J.F. O’Reilly Kimberly-Clark Backed by a $100 Consolidated Oscar Mayer Red Gold installs the the sole corporate a 25-year deal in 1972 the move in 1975 revolutionizes the becomes President and CEO Corporation introduces million advertising Foods Corporation Lunchables debuts in first state-of-the-art sponsor of the first which gives it naming to voluntarily and tomato industry by of Heinz in 1979, launching Depend incontinence campaign, the changes its 1988 and kicks off the evaporator in its plant Earth Day in April rights to the Buffalo unilaterally eliminate adopting the use of an era in which the company products. The first Coca-Cola name to Sara Lee lunch combinations in 1988, allowing it to 1970, and later that Bills brand new chlorofluorocarbons coreless tomatoes, becomes a leader in the television ads air in Company in Corporation in category in the U.S. concentrate tomato year introduces Arm football stadium. It (CFCs) from its which were first nutrition and wellness 1981 with actress June 1982 introduces 1985 to reflect its Kraft goes on to develop puree at a lower & Hammer Powder is one of the earliest aerosol products, developed four revolution, and penetrates Allyson encouraging Diet Coke which consumer marketing innovative varieties of temperature than Laundry Detergent, examples of the sale such as Raid insect years earlier. such challenging markets as people to “get back eventually orientation. In 1988, these convenient meals, traditional atmospheric the first non- of naming rights spray, three years South , Russia, the Czech into life.” becomes the top- the corporation including pizza, taco, cooking, resulting in phosphate detergent. in North American before the U.S. Republic, Hungary, South selling soft drink in reaches the $10 breakfast selections tomato products with sports. mandate. Korea, China, India, Egypt, the U.S. billion sales mark. and better-for-you consistent color, texture Botswana and Zimbabwe. chicken dunks. and flavor.

126 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 127 “We will place an increased emphasis on brand-building and “Every business has some central organizing principle that people use as the basis for making THE CPG CENTURY innovation, as we continue on decisions, meeting challenges, and creating opportunities. For P&G, it is innovation. Innovation Years of the path toward becoming a top- must be the central driving force ... at the center of the business in order to choose the right 0 Consumer tier consumer packaged goods goals and business strategy and make how-to-win choices. It is central to the job of every leader Packaged Goods company.” — ­­business unit managers, functional leaders and the CEO.” 10 Gregg L. Engles, Chairman, A.G. Lafley, Chairman & CEO, The Procter & Gamble Company CEO and President, Dairy Group INNOVATION Dean Foods

Signatu re with OUTLINE version Symbol

For overall widths of MORE than 2 inches (Symbol is SMALLER in relation to type) s s 1990 2000

1995 1996 1998 1999 2002

For overall widths of LESS than 2 inches (Symbol is LARGER in relation to type)

TM

Profitability & Sustainability

1-Color 2-Color

PMS PMS PMS Black 542 425 Georgia Pacific begins using its Fairbault Foods In 1996, Dean Knouse Foods In 1999, Flowers Unilever starts the 21st century Procter & Gamble launches (orKimberly-Clark other single PMS color) Corporation Ralston Foods is In 2002, Campbell celebrates its 100th Foods pioneers receives the DuPont Foods becomes the by launching two initiatives: Path a “connect and develop” opens an Innovation the industry leader Soup introduces Packaging Systems Optimization anniversary with the the refrigerated Award for “Excellence first commercial to Growth, a concentration on model for new products as Design Studio equipped in private label Soup at Hand, (PSO) calculator in 2002 to construction of a soymilk in Packaging” as wholesale baker to innovation and brand develoment an alternative to innovation with advanced virtual ready-to-eat and hot the first line of help its customers reduce new warehouse at category with well as DuPont’s top introduce a sugar- on a focused portfolio of 400 from within. The company reality technology that cereals, supplying sippible soups total packaging costs while Fairbault Industrial the introduction Diamond Award in free bread called brands (down from 1,600), and collaborates with suppliers, enables the company to over 50 varieties designed to achieving greater sustainability Park in 1995. of Silk. 1998 in recognition Nature’s Own followed in 2004 by Vitality, entrepreneurs and others, test merchandising layouts that compete with fit the lifestyle with a short lead time. Over $180 of its 46-48-ounce, Sugar Free. a mission “to meet everyday looks throughout the world and chart a shopper’s national brands of America’s million in annual savings are plastic easy-grip apple needs for nutrition, hygiene, and for technologies, ideas and product choices without in terms of taste, increasingly on- identified by computing potential sauce container. personal care with brands that products with potential, building physical mockups appearance and the-go consumer. savings in terms of raw material help people feel good, look good, then develops, improves or conducting in-store nutrition. cost, energy consumption and and get more out of life.” and markets them. surveys. greenhouse gas emissions (GHG).

128 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 129 “Across the entire spectrum of categories, our “At Campbell Soup Company, innovation continued focus on R&D and innovation as well continues to be critical to our success. The THE CPG CENTURY as consumer insights enables us to adapt and progress we have made as a company, Years of continually meet consumer needs, while still particularly throughout the last six years of 0 Consumer leveraging the global strengths our flagship our company¹s transformation, is based on Packaged Goods Carbonated Soft Drinks beverage portfolio.” the innovative mindset we apply to our work.” 10 INNOVATION Indra K. Nooyi, Chairman and CEO, Pepsico Doug Conant, CEO, Campbell Soup Company s 2000

2003 2004 2005 2006

In 2003, Kraft works with Campbell Soup Frito-Lay removes In 2004, Kraft introduces a PepsiCo introduces the Smart Kraft wins the first GMA CPG Award for Campbell Soup Co. wins the GMA CPG Sara Lee Foods establishes Safeway Stores using a new deploys breakthrough trans fats from line of South Beach Diet Spot on packaging in 2004 collaborative supply chain redesign with Award for its center-store category an ongoing R&D relationship collaboration process developed gravity-feed shelving Doritos, Tostitos (now called South Beach to help consumers identify Safeway, then the nation’s fifth-largest retailer turnaround of soup, a multipart effort to with Purdue University in by IDEO, a global design and in supermarkets in and Cheetos Living) products developed food and beverage choices and recipient of some 300 million pounds of redefine soup as a much-larger “simple 2006 by launching the Sara innovation firm. They create 2003. The unique snacks in 2003. by Arthur Agatston, that contribute to a healthier Kraft product annually. Facilitated by Palo Alto, meals” category starting in 2002. The new Lee Innovation Award, an a cross-functional team that system groups soups author of the best-selling lifestyle. The spot is placed on CA-based design firm Ideo, the effort sought to approach, “Integrated Category Planning,” opportunity for college improves Safeway’s stock in a highly-visible book, “The South Beach some 250 products, including improve customer collaboration and alignment. shifted the entire company’s thinking students to win $10,000 by position through a redesigned and efficient way and Diet.” The products meet Tropicana Pure Premium, Results: a 162-percent year-to-year increase in from a brand focus to a mega-category providing the company with supply chain and alignment makes it easier for consumer interest in eating Gatorade Thirst Quencher, total sales of one featured category, a seven- focus, reversing a 30-year decline in an innovative idea or product between the trading partners. In shoppers to find and the right combination Baked! Lays, Potato Crisps, percent improvement in full pallet shipments, condensed soups and incremental sales with the potential to enter the one category, Kraft experienced select their favorite of carbs and fats from a Quaker Oatmeal, Diet Pepsi, new-product speed to retail cut 50 percent, new from new convenience- and health-oriented marketplace. a 162% sales increase. varieties. variety of foods. and Life Cereal. innovation tools and a “true partnership.” packaging, products and merchandising.

130 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 131 “We use high levels of brand investment and innovation to nurture our Power Brands to above industry and company average growth rates. Our innovation rate at almost 40% of net revenue from products that launched in the prior three years THE CPG CENTURY strengthens the positions of our Power Brands within their categories, continually Years of enhancing their consumer appeal. These innovations are then supported with a 0 Consumer marketing investment that is amongst the highest in our industry – with our media Packaged Goods investment alone running at 12.4% of net revenues.” 10 INNOVATION Bart Becht, CEO and Director, Reckitt Benckiser s 2000

2007 2008

Masterfoods USA, Wm. In 2007, Furmano Foods Unilever wins GMA’s 2007 CPG Award for its Reckitt Benckiser becomes the first Sunny Delight Beverages responds Clorox wins a 2008 GMA CPG Award Kettle Foods wins a 2008 GMA CPG Wrigley Company and bases its product and groundbreaking collaboration with Ahold. major fast-moving consumer products to consumer expectations for for Green Works, the first line of natural Award for the marketing creativity Time/Warner Retail win packaging innovations Unilever and Ahold worked together to company to target a new standard in fresher tasting, more wholesome cleansers developed by a major CPG of its “People’s Choice” campaign ­­ the 2006 GMA CPG’s on collaboration and unite multiple marketing and merchandising carbon reduction by launching Carbon 20 products in 2007 by launching Fruit company. Products in the line, made from consumer Internet voting for their Award for collaboration on sees a sales lift of its personnel inside Ahold, spanning over 20 in 2007, a revolutionary program aimed at Simple, a 100% juice smoothie plant-based ingredients, are as effective as favorite Kettle Foods chip, which research identifying a $2 when it categories. This broad team ensured that reducing its total carbon footprint by 20% designed to provide two full conventional cleaners. Clorox also announces gets fans to connect with the brand billion industry opportunity moves from a red to a out-of-store and in-store programming met per unit by the year 2020. This “cradle to servings of fruit in every 8-ounce another first –– an alliance with the Sierra in a new way. from better checkstand yellow label. How? By shopper needs –– and were well-executed grave” approach across the entire product glass, and Sunny D 100% Juices Club. The oldest, largest and most influential merchandising; and that placing prototypes in the across more than 1,000 stores. Result: life cycle measures not only the carbon – an all-natural, no-sugar-added grassroots environmental group in the US will failure to adequately retail aisle to determine Shopper trips to the store rose 90 percent, impact of raw and packaging materials, line of chilled juices with no added counsel and guide Clorox on its journey to merchandise front end which label stands out multiple category buying rose 80 percent, manufacturing, logistics and distribution, preservatives. becoming a more sustainable company. results in losses averaging on the shelf. sales per trip rose 25 percent, and total but also consumer use of products, where $100,000 per store per year. store sales rose by 138 percent. the greatest carbon impact can occur.

132 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008 Fo r u m 133 Congratulations to members of the Consumer Packaged Goods industry on 100 years of innovation. Siemens PLM Software is proud to be a part of this milestone and we look forward to being a part of this industry’s successful innovation for the next 100 years.

About Siemens PLM Software Siemens PLM Software, a business unit of the Siemens Industry Automation Division, is a leading global provider of product lifecycle management (PLM) software and services with 5.5 million licensed seats and 51,000 customers worldwide. Headquartered in Plano,Texas, Siemens PLM Software’s open enterprise solutions enable a world where organizations and their partners collaborate through Global Innovation Networks to deliver world-class products and services. For more information on Siemens PLM Software products and services, visit: www.siemens.com/plm/consumerproducts

134 Fo r u m GMA Ce n t e n n i a l Sp e c i a l Iss u e 2008