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  • Adam Hill

It’s a new day for the CPG industry. Companies can no longer rely on old ways of doing business



A year ago, companies were preparing for business as usual while trying to grapple with changes in consumer preferences, accelerated innovation and increased competition. Buzz words such as nimble innovation, best in class product development and cross-company collaboration were the order of the day.


And then 2020 happened, bringing with it massive upheaval including extreme uncertainty. Companies scrambling to adapt to all the changes from short- and long-term funding, deciding on whether to shift businesses strategy to mitigating risks. Finance teams around the world have had to create financial projections to not only survive instability but thrive. Financial forecasting and planning for the coming year, something that is relatively straightforward in a normal year, caused an unparalleled level of uncertainty.


Historically, planning is typically conducted with very little, or no, collaboration between departments. Data is produced independently from one another, resulting in a collection of disparate planning spreadsheets, sat in silos, which have been created without consideration of their impact on other areas of the business.


Suddenly business leaders were looking to the data and finance teams to make rapid business decisions including scenario planning, supply chain, manufacturing impact or even emergent trends.


Companies have had to plan for multiple scenarios, ignoring “baselines” for goal setting and targets. Financial based incentive schemes had to be reimagined. Keeping top performers motivated was a balancing act of being realistic and affordable. To overcome this challenge, companies have turned to planning tools to have immediate access to a single source of truth, combining all data to create rolling forecasts enabling accelerated decision making.


Moving forward, CPG companies should take bold action to emerge stronger from the current crisis. While stabilising near-term operations, they also should focus on strategic investments to reshape capabilities and cost structures, proactively reshape the structure of the industry itself and modernise workforces. A balanced mix of initiatives are required to deliver value over the near term as well as into the future.


As with so many industries, the pandemic has forced CPG companies to recognise the shortcomings of their traditional planning and processes in the face of such rapid change. Leaders have been forced to take a range of actions to give them greater flexibility and increased output. Since it is likely that demand and supply volatility will be the new normal for an extended period of time, consumer goods companies could benefit from reviewing their planning strategies.


Companies with greater enterprise agility can be positioned to respond to heightened uncertainty, including both supply chain responsiveness and consumer-facing experiences. However, that will not deliver sustained growth.


It is not enough for CPG companies to meet the needs of consumer segments; they must exceed the needs of individual consumers both in ways they expect and in ways they have not yet imagined. There must be an emphasis on meaningful and timely innovation—in terms of products (pipeline), the business models required, and the ways of engaging differently with consumers and shoppers at a much more personal level.


In order to prosper CPGs should strengthen their brands by focusing on consumer marketing, selling across growing channels and embracing operating models that prioritise consumer brands and intelligent productivity gains to drive commercial investments. This will help industry leaders unlock sustainable growth.


As communities continue to reopen, economic and public health realities will inform consumer behaviour in the 'next normal’. But it will also be shaped by the response of manufacturers that seize the opportunity by offering breakthrough products and using innovative business models.


For further information, including details on the changing consumer trends and how to respond to them, download our full whitepaper.


Our next blog will explore emerging consumer behaviours as a result of the pandemic, keep an eye on our social channels where we’ll be publishing details.

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