Consumer Products Companies Increasingly Leverage Procurement Outsourcing for Cost Savings

ICG Commerce Expands Market Penetration and Continues Momentum as Leading Procurement Outsourcing Specialist for Consumer Products

PHILADELPHIA - Tuesday, April 06, 2010 - Procurement outsourcing began to emerge as a strategy in 2006, with 
several leading consumer products (CP) companies among the early adopters. Since then, more than 20% of top-tier U.S. 
CP companies have signed procurement outsourcing agreements in an effort to reduce indirect costs, drive bottom line 
improvements or reinvest to drive growth.  ICG Commerce, the procurement outsourcing specialist, has been selected as 
the provider of choice in 50% of these deals, and almost doubled its market penetration in 2009 alone, adding Pinnacle 
Foods and several others to an already strong CP client base.  Adoption of procurement outsourcing is poised to 
accelerate in 2010 as companies look for next-generation cost savings opportunities coming out of the recession.   

“Based on increased pressure to quickly meet changing business demands, CP companies continue to be the leading 
adopters of procurement outsourcing,” said Rachael Stormonth, senior vice-president at Nelson-Hall, a leading 
Business Process Outsourcing (BPO) research firm.  “Companies such as Unilever, Kimberly-Clark, Sara Lee and 
Chiquita are using procurement outsourcing to reduce non-core costs and increase the effectiveness of their 
procurement function.”

Also in 2009, as part of a focused effort to enhance its offerings and delivery, ICG Commerce formed a Consumer Products 
Executive Advisory Board to provide strategic counsel on business issues facing the industry.  The Executive Advisory 
Board met on February 2nd and 3rd in Philadelphia for a roundtable discussion of industry challenges such as private-label 
pressure and continued commodity cost increases – both of which are driving the need for cost reductions – as well as 
discussion of the opportunities presented by procurement outsourcing. 

Click here for excerpts from interviews with these Advisory Board members during the meeting. 

“In 2010, the ability to drive earnings per share improvements continues to be a challenge with a short list of solutions,” 
said Jon Feeney, Managing Director Research, Consumer Research Group, Janney Montgomery Scott LLC and guest 
speaker at ICG Commerce’s February meeting.  “Those companies who focus aggressively on productivity will be 
most successful.  I have seen a number of CP companies implementing strategies involving procurement outsourcing to 
improve productivity and reduce costs and expect this trend to continue.”

For most of 2009, consumer products leaders reduced costs through traditional one-time measures such as employee 
layoffs, plant closings and product price cuts.  In 2010, even with economic conditions stabilizing, companies 
are looking for new ways to fund innovation and growth.  Procurement outsourcing provides an important opportunity 
to further strengthen top and bottom line performance. 

“CP executives’ primary focus has traditionally centered around the consumer-facing side of the business, and especially 
of late, understanding changing consumer behaviors with the downturn,” said Manly Molpus, a member of ICG 
Commerce’s CP Executive Advisory Board. “More recently, leaders are stepping back to look at the overall business from 
top to bottom, with a focus on costs too -- and procurement outsourcing represents an important opportunity to improve 
operations and optimize spending.”

Also discussed during the roundtable was the emerging trend among CP companies to include marketing services 
spending in procurement outsourcing initiatives. Marketing is an area long underserved from a procurement support 
standpoint, largely because of a shortage of procurement resources with marketing subject matter expertise. In response 
to demand from customers, ICG Commerce has built out a specialized marketing services procurement capability to 
address this need. 

“We are expecting procurement outsourcing to continue to emerge as a key trend among forward-thinking CP companies 
looking for the next-generation of cost savings,” said Carl Guarino, CEO of ICG Commerce.  “In 2010, ICG Commerce will 
continue to enhance its solution and the support we provide to the consumer products industry with the strategic direction 
of our Advisory Board and our customers in the industry.” 

About ICG Commerce, Inc.
ICG Commerce, the procurement outsourcing specialist, is driving a fundamental change in the way today’s 
businesses achieve financial agility and fund growth.  ICG Commerce is the only procurement outsourcing specialist 
with superior market intelligence integrated into an operational approach, resulting in hundreds of millions of dollars 
in realized savings.  ICG Commerce is a privately held company and member of Internet Capital Group's (Nasdaq: ICGE) 
network of partner companies.