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Drivers for growth in the consumer packaged goods industry

Two main forces are shaping the consumer packaged goods industry and impacting business models from start to finish.

Two main forces shape the industry

We believe there are two mutually reinforcing forces shaping the future of the consumer packaged goods industry: the changing consumer and the all-pervading advance of digital.

Five leading consumer packaged goods CEOs weighed in on these forces at this year’s Grocery Manufacturer’s Association (GMA) Leadership Forum. Accenture management consultant Shiv Iyer moderated the panel from Idahoan Foods, Land O’Lakes, PepsiCo, Procter & Gamble, and Wrigley.

Panel Members

Consumers want what they want

Consumers continue to change. More demanding than ever and completely in control, today’s consumers expect to be served in the moment, where they are, with information at their fingertips. Consumer trust, while always important, now comes to the forefront.

“Transparency is the one way you can build trust,” Kenneth Keller, Wrigley North American president, said. “The more we’re perceived as not willing to put things out there, the more consumers will wonder if they can trust us.”

Trust becomes more important as digital experiences and providers grow. Consumers are used to dealing with a myriad of digital experiences every day, creating expectations that seamlessly travel across products and services. But as Carolyn Tastad, P&G Group President said, “Education is important. There needs to be a dialog to balance efficacious products with something made in someone’s home.”

Digital levels the playing field

Digital is enabling and further reinforcing these changes by creating platforms, experiences and services that help consumers actualize their needs, whether the need for greater information, instant gratification or personalization. Digital empowers David’s with the same tools as Goliath, leveling the playing field in some areas. Scale barriers have diminished. As Christopher Policinski, President and CEO of Land O’Lakes said, “You no longer have to be a billion-dollar brand to compete.”

Nimble, agile competitors are emerging along every key dimension of the business, driving innovation—be that how consumers engage, how channels and shopping evolve, or how product offerings are curated. Al Carey, CEO PepsiCo NA mentioned packaging and design has played an important role in driving growth.

Digitally enabled competitors are also creating new, personalized business models, changing the basis of competition. In response, CPG companies are thinking about informed bets that move them into potentially profitable niches while preserving their traditional business.

CPG companies are re-evaluating not just their business models, but also their operating models, to adapt and respond to the changing consumer embracing digital. Drew Facer, president and CEO, Idahoan Foods put it well: “Your biggest enemy is complacency. You have to drive a culture of inquisitiveness. You should always be asking where you need to be next.”