Driving a Baby Boom Through Innovation

What matters more to parents than the safety of their children? Nothing—and that means that when it comes to the products that take center stage in the first years of a baby’s life, parents are willing to research carefully, compare features and select innovative products that offer greater quality, safety and comfort for their baby.

This insight is critical to the successful growth story of Newell Brands’ Graco business. Since we adopted the Growth Game Plan, our Baby business has delivered an unprecedented set of results stringing together multiple years of industry leading growth and more than doubling the operating margin in the business from where we started in 2011. We have driven this transformation by investing in product based innovation that has enabled us to premiumize the category and through highly effective brand communication. We funded these investments by significantly reducing the cost structure in our business and leveraging the scale of the corporation. Our innovation has been the best in the industry introducing innovative functionality, safety features, and other fit, form and finish benefits that delight moms.

The Graco 4Ever 4-in-1 Car Seat, launched in 2015, has become the company’s biggest innovation to date, contributing more than $100 million in sales since its introduction. In 2016, we introduced the Graco Extend2Fit 3-in-1 car seat based on the insight that many parents transition their children from rear to forward-facing earlier than experts recommend, simply because their children lack leg room as they grow. The Extend2Fit car seat grows with a child, adjusting to maximize children’s safety and comfort at every stage.

The types of investments we’ve made, including significantly increased advertising support, wouldn’t have been possible for many of our competitors. This illustrates Newell Brands’ unique opportunity—because of the scale of our company, and the cost savings we are generating from Project Renewal and transaction- related synergies, we can quickly and strategically allocate major investments where we know they will have the greatest impact.

Our Baby business, one of our Win Bigger businesses, will continue applying the Growth Game Plan into the future. We expect this strong momentum to continue, and foresee major opportunities to grow share in emerging markets over the long term, as child safety becomes a legislative priority in these regions. Parents’ love for their children isn’t going away—and as long as we successfully apply the Growth Game Plan, neither is our potential to grow this business.

Writing New Chapters of Growth

At Newell Brands, small insights can lead to big ideas. Take Paper Mate InkJoy Gels, which were inspired in part by a consumer insight related to the frustration left-hand writers know all too well: a hand smudged with ink after writing a letter or taking notes. Paper Mate InkJoy Gel Pens offer smooth, colorful ink that dries three times faster than the leading gel pen^* resulting in reduced smearing. This functional point of difference driven by a new ink system is complemented by a new fit and finish for these pens making InkJoy Gels one of our most successful new products ever launched on Paper Mate.

Writing is one of our most important businesses and one of our Win Bigger categories. Over the last five years, Writing has also become one of our strongest success stories. In Writing, we identified a category with significant potential for market share consolidation and geographic expansion. We transformed the category by investing in insights, introducing new products with innovative features and supporting those products with advertising and promotion—all in a category in which competitors spend relatively little.

This has led to product innovations such as Sharpie Clear View Highlighters, the relaunch of Mr. Sketch scented markers and expansion of the Paper Mate InkJoy platform, for which we increased demand by significantly boosting advertising and marketing support. Our brands have gained tremendous momentum in our home market, increasing market share by nearly 400 basis points over the last five years and now expanding that successful model to Canada, Mexico and Latin America. Late this past year, we also launched Paper Mate and Sharpie into Shanghai where we will test and learn as we build these great brands.

In Writing, as in all of our businesses, the Growth Game Plan is never complete. We’re continuing to invest in innovations while keeping a finger on the pulse of trends like the adult coloring craze and crafting activities like slime, the popular kids’ craft made from Elmer’s glue. These on trend opportunities offer tremendous growth potential as we head into 2017.

^* vs Pilot G2 based on average dry times of black, blue, red, and green. Individual dry times may vary by color.

Cooking for Growth

Food has a different meaning today than it did just a few years ago—look no further than the “foodie” movement. For an increasing number of people around the world, food is a passion, an experience and a way to bring family and friends together.

To capitalize on this trend and meet the needs of a new generation of home chefs, Newell Brands has a host of products to help create delicious meals: Calphalon cookware, bakeware and cutlery; Oster blenders, toasters and kitchen tools; iconic slow cookers made by Crock-Pot; and coffee makers and espresso machines from Mr. Coffee. Our appliances and cookware make the job of connecting family and friends over food so easy.

The demand for great home-cooked food isn’t limited to the United States. Our brands are growing rapidly across Latin America where Oster stands out as a very powerful and well-known brand across almost all of our appliance and food preparation product categories. We see significant potential for growth in emerging markets over the long term, given the rise of the middle class and the consequent increase in consumerism in these markets.

We are developing a pipeline of great new products which we will bring to market over the coming few years, applying the best of our insight and design capabilities. Our concept test results in both cookware and appliances are strong and the product design work is in full swing. These businesses are what we call Develop for Growth businesses and we expect from late 2017 forward to bring a steady stream of new ideas to market that will both drive category growth and market share increases. This building pipeline of ideas is an example of the company’s expanded capability agenda in action.

Setting the Mood for Growth

Our Home Fragrance business has been one of our fastest growing businesses over the last number of years as part of Jarden.

Yankee Candle, the Division’s flagship brand, is known for its apothecary jars and unparalleled scents. Over the years the brand has expanded its offering into all kinds of new forms including pillars, melts without wicks, appliances and most recently car fresheners. Yankee is famous for fragrance.

Innovation is at the heart of the Home Fragrance growth model. Nothing demonstrates this more than the division’s launch of a new capability that allows consumers to upload a photo or piece of artwork online and create customized labels for their candles. This new capability enables our consumers to gift Yankee Candles in a more personalized way, making the moment they are celebrating even more meaningful. In 2017, Yankee Candle will bring this capability into all of our retail stores. Another exciting innovation is being deployed into the commercial channels where Yankee has launched new Scent Systems. Through this innovation, Yankee Candle has begun to take its famous fragrances to commercial environments like the hospitality and building services channels, giving the operators of those facilities the ability to control fragrance dispersal through a mobile app.

Our Home Fragrance business has a rapidly growing business in Europe where we have developed a $200 million business in a relatively short period of time. We’ve set our sights on the large growing market for home fragrance worldwide and see significant potential for expansion both in Europe and beyond. In early 2017, we opened a new factory in the Czech Republic that will enable broadened geographic development in continental Europe.

On January 1, 2017, we completed the acquisition of Smith Mountain Industries and the WoodWick brand. WoodWick offers a differentiated product from Yankee Candle, with candles that crackle as they burn. This addition of WoodWick to the portfolio will strengthen our presence and relationship with our retail partners as we look to continue to build out a multi-brand portfolio of Home Fragrance offerings.

We have a big ambition in Home Fragrance and are at the beginning of what should be an exciting journey.

Activating a Portfolio of Great Outdoor Brands

The millennial generation craves experiences in the great outdoors—a trend that bodes well for our Outdoor & Recreation and Fishing divisions. This trend extends across multiple countries with great opportunity in North America and Europe.

We have a tremendous set of brands with Coleman’s broad portfolio of tents, stoves, coolers, lanterns and other outdoor equipment; Camping Gaz in Europe offering a very similar portfolio to Coleman; Marmot’s technical apparel, shelters, hiking packs, sleeping bags and other alpinist gear for more serious outdoor activity; and Contigo, bubba, Avex, and Rubbermaid hydration and thermal beverage containers that enable enthusiasts to bring their favorite beverages on the go. When coupled with our leading portfolio of Fishing Division brands including Abu Garcia, Shakespeare, Ugly Stick, Penn, Berkley and Gulp among others, we are in an unparalleled position to grow.

Outdoor enthusiasts care about the quality and functionality of the items they buy, often spending time reading reviews and researching features online. The growth of premium outdoor brands shows us that this is a category in which consumers are willing to invest if the brand offers value-enhancing features. Our early concept testing of new product ideas shows great promise and gives us confidence that we can accelerate the growth of the outdoor products franchise, as we invest in consumer insights and design to bring these new concepts to life.

We have driven solid performance through the 2016 transition year for these businesses and expect momentum to build through 2017 as we work to expand distribution in advance of our strengthened new product pipeline coming to market in 2018 and beyond.