The S&P 500 consumer staples sector is up over 12% this year.
We are seeing consumer packaged goods companies highlighting their use of artificial intelligence in their earnings reports.
Procter and Gamble utilizing the tech for supply chain visibility, and PepsiCo also announcing expanded AI reload agents across beverage segments.
CPG brands will see demand spikes in Q2 and Q3 around Easter, Mother's Day.
Memorial Day and the 4th of July and to meet that demand they use AI for things like forecasting inventory needs and also keeping shelves filled while joining me live here at the New York Stock Exchange this morning is founder and CEO of Chris great to have you here.
Thank you so much for joining me.
I do want to get your take on what we're seeing when it comes to both the supply as well as demand side in CPG.
It's incredibly exciting times now.
We as an industry has kind of gone from Just collecting a lot of data, making sense of all of the data.
In the past it was more of a recommendation on what to do, but the big change now with AI is that you can actually start taking actions and take actions on scale, so it doesn't become just emails and reports, etc. but these agentic systems now can truly set up missions to have more products on the shelf, better assortment, lower prices.
Etc. and now you can kind of close the loop and you can identically take all of these incredible actions that was never possible before.
Yes, and agentic AI is something that all of us are watching closely across all industries here.
But when it comes to CPG, what are you seeing on a day to day basis?
And can you give us a sneak peek of what's really happening on the ground?
Yes, think about how complex it is.
So you think the Procter and Gamble or the Mars or the Model.
And the large consumer goods companies typically they have hundreds of different brands.
They have hundreds of thousands of different SKUs, and they sell them in millions of different stores and they have different prices and they have different kind of supply chains and all of that.
And it's very difficult today.
It's raining in New York.
Last weekend it was 70 degrees and it was snowing the week before, so there's an incredibly Complex complexity in this, so we're seeing two categories the ones that really lean into AI and think AI first, they're going to be in one category, and the ones that don't and don't use this.
I think it's a little bit similar to what we're seeing for the software companies.
They're going to have some terminal value of zero at one point, and the ones that do lean in are the ones that are going to continue to expand and to use it as an opportunity.
Yes, and when we're talking about some of these CPG companies, if we're looking at the multinational corporations, we know that in terms of geographic location there are so many factors that come into play and given the current conflict in the Middle East, we're constantly reminded of supply chain risks.
So tell us a little bit about the trends as well as events that actually factor into product demand.
Yes, absolutely.
So you have consumer demands, so those are typically now for Super Super Bowl.
I just looked at the data jalapenos this year was spiking right.
And my kids made fun of me this morning for saying jalapenos wrong, but that's spiking for Super Bowl, for instance, for Valentine's Day, you can see strawberries or the big grapes are going up 30 to 40%, but it can also be very local small events type of thing and those are very weather driven, so it's the most complex kind of industry to understand.
Signals, but then it's very hard to continue to increase consumer prices.
That's something we all want to see come down.
It's very hard to take out more margin in terms of pushing suppliers down because of the supply chain challenges.
So I think a lot of what we're going to see is the use of AI to drive cost reductions throughout the industry.
Low consumer prices because we know that retailers to operate on thin margins here and can tend to lose billions of dollars on out of stock as well as inventory waste, especially if there are new trends but we all know that agentic AI can help in that solution.
So what are some events that you're paying attention to as we head into the summer months here.
Now we're looking at everything that's kind of events that are happening and very often these things are local in a way and it was hard in the past to factor all of that in, but now with AI you can actually look at all of these local events, local weather, barbecue season happening, allergy season, all of these types of things that was very hard with more big instruments to kind of take the actions.
And now now that actions are automated as well, now you can actually start taking all of these types of signals so out of stocks when you order online, for instance, we all have that problem some substitute product or something.
Like that or they delivered the wrong thing, that I think is a very big focus for retailers now is to get inventory accurate in the stores so when the shoppers come and actually look for it, they can deliver it and have a good kind of consumer experience.
So that's probably one of the bigger ones that we are focused on.
And finally, before I let you go for viewers across America that are watching right now and of course they're trying to manage their monthly costs as well as budget.
What would you say to them when it comes to finding the best values out there for CPG for consumers or consumers, consumers, I think a lot of the products that are retailers are actually putting out have high quality and lower prices.
And very often they can shorten down the supply chains a little bit, so I think consumers are often gravitating towards those type of products, but we saw also during Valentine's Day that a lot of innovation is happening and there's new products and Things that come to market as well.
So it's I love and it's fascinating, incredible industry.
It changes every day and now with AI it changes almost every hour.
Well Ari, it was great talking to you.
Thank you so much for joining us today and thank you so much for sharing all of your insights.
Thank you.
