Presenting at the 2023 dbAccess Global Consumer Conference in Paris, Newell Brands president and CEO Chris Peterson and CFO Mark Erceg provided an update on the company’s strategic priorities, capital allocation framework and Evergreen Targets as part of focusing and sharpening performance.
In the presentation, Newell defined core capabilities, which informed the integrated set of where to play and how to win choices it will pursue going forward. The company also outlined the major changes the leadership team is executing such as resource distortion to focus on the company’s biggest value pools, including the largest and most profitable brands, and fastest-growing channels and winning retailers, as well as top countries by sales. In the material supporting the presentation, Newell pointed out that 25 of 80 brands account for about 90% of the company’s sales and profit while also noting that 10 of 50 countries represent about 90% of sales.
Newell intends to make meaningful improvements in front-end capabilities including consumer understanding, brand management, innovation and go-to-market execution. The company stated that it would conduct proprietary consumer research, develop in-depth ethnographic insights and marry insights with advanced analytics to develop consumer knowledge it could apply throughout the company. It also will institute an innovation process focused on top brands, implementing project tiering, establishing centralized tracking for margin accretion and developing multi-year technology platforms.
Newell plans to turn its scale into a competitive advantage, enabling cost savings that provide fuel for reinvestment as it unlocks distribution opportunities and rationalizes supplier base.
In addition, its strategic moves include transitioning to a high-performance organization as the company transforms its culture and moves with speed and agility to realize its full potential in part by attracting, developing and retaining high-quality talent while valuing diversity and domain expertise.
The company also indicated that it would invest primarily in mid- and high-price point segments and target Millennials and Gen Zers.
In the presentation, Peterson said, “Our presentation highlighted a pivot in our front-end strategy and outlined the focused and deliberate choices we are making to strengthen the company’s consumer-facing capabilities while distorting investment to our most attractive value pools. We will leverage and further build upon the strengthened operational foundation we’ve established while harnessing the scale of our portfolio to drive competitive advantage. I am confident that our clear strategic choices, paired with our experienced leadership team and talented employees, will enable the company to accelerate financial performance going forward. We see a significant runway for value creation by unlocking the power of our brands, scale and operational discipline to drive sales growth, margin expansion and cash flow generation as we transition to a high-performance organization.”
