Predictable growth and margins are increasingly rare.
Retail models are reinvented to meet changing consumer behaviors.
Industry lines blur, and expectations outpace experiences.
Leaders need a purpose that aligns with consumers’ values.
Financial success is only part of the story
Consumers are redefining what they value. To meet the demand, the most forward-thinking CPGs are beginning to measure environmental and social progress with a similar level of scrutiny as they would apply to cash, margin and profit.
Of consumers say they’re making more sustainable choices during COVID-19 and will continue to do so beyond the pandemic.
Of companies reported focus was on financial performance in 2020 – down from 90% in 2015.
Growth is increasingly found in unfamiliar places
Historically, the largest CPG companies turned to geographical expansion as a reliable avenue of growth. Now, investment is flowing away from moving into new markets towards developing flexible business models or even entirely new categories.
Of total spend is made up of geographic expansion, down from 67% in 2015.
Of M&A spend in 2021 was on adjacent categories and new business models.
Don’t go it alone
Businesses must look broader and wider to find the right partners to help drive innovation. In this fast-paced, complex and expensive environment, operating within a wider ecosystem has become essential.
Of executives are now trying to drive growth through building ecosystems.
Of global executives say that innovation stakes have never been higher.
Data shows the way
The ability to access and extract insights from different forms of consumer data will separate the leaders from the followers. But it isn’t easy. To succeed, companies must capture deep insights about customers and demand.
Of CPG executives view data and artificial intelligence as an enabler of their strategic priorities.
Of executives agree that organizations need to dramatically reengineer the experiences that bring technology and people together.
How to start
The path to growth has never been so complex. Face with myriad choices, it’s time for businesses to make deliberate choices.
Pressure-test your purpose
Authentically and systematically. This cannot be top-down, but must be organization-wide.
Choose partners wisely
It’s not about transactions but shared incentives. HR, finance and procurement have to change accordingly.
Rely on data
Redefine data’s role and be clear about the true potential of insights you can glean from consumer touchpoints.
Tap into the power of human + machine
AI, cloud and machine learning capabilities are essential. So, too, are evolving human-machine combinations.