Consumer Staples Sector | New Product Development - An Under-Appreciated Growth Engine: ICICI Securities
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ICICI Securities Report
We believe a good NPD strategy is an under-appreciated growth driver (in the long-term) for consumer staples – the benefit is far more than just a few points of extra growth (for a year).
A good NPD process, driven by top management, ensures (1) longevity – companies have to innovate to stay relevant in the long term, (2) expansion into adjacencies – highly DCF accretive, in our opinion.
While there are near-term risks of NPD failure (1) stock returns costs (can be minimised, though), and (2) (potential) conflict with trade channel, we believe the potential benefits far outweigh the costs.
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