How to reinvent CPGs by infusing intelligence

April 1, 2022

In brief

To thrive, consumer packaged goods companies (CPGs) need to become fully insight led. They need to move beyond pockets and pilots.
This requires seamlessly connecting internal and external data to fuel insights that are shared throughout the organization.
Getting it right means harnessing the power of artificial intelligence (AI) on the cloud.
The result: both the macro and micro pictures are always in focus and available in seconds or minutes instead of hours or days.

Too many consumer packaged goods companies (CPGs) are losing household relevancy as consumer preferences shift, and channel complexities increase. What’s more, they’re experiencing unrivaled levels of disruption across operations. Legacy structures and processes are too static. To sustain growth and differentiation, CPGs must become end-to-end insights-driven consumer companies. Leaders and employees will need to solve for a new set of questions and embed intelligence throughout the company. This requires a fundamental mindset shift and new ways of working, starting at the top. Thinking about this in the context of three questions can help.

Question: How can we reimagine intimacy with end consumers and deliver a personalized experience?

Answer: Understanding consumer behavior on a granular level is critical when it comes to delivering personal experiences. But CPG’s are hindered by external factors and the lack of a cohesive end-to-end architecture that enables collections, curation and just-in-time insights to target the right consumer with the right messaging based on the consumers’ context.

Question: How can we sense and respond to demand volatility within days and create supply chain resiliency?

Answer: Linear supply chains won’t cut it. Today’s competitive environment calls for digital supply networks, ones that are integrated and continuously connecting plants, machines, workers, manufacturing, operations, and ecosystem players. Operational resilience and agility are enhanced by having data-driven intelligence in CPGs.

The CPG companies that are pulling ahead of their competitors have broken out of functional and geographical siloes and are thinking bigger and broader about how to leverage advancements in data and analytics to become intelligent consumer organizations.

Question: How do you stay ahead of the evolving channel landscape and optimize performance at the outlet level?

Answer: Promotion optimization. Pricing. Price pack architecture. Retail negotiation. Excelling in any of these areas, let alone all, requires precision analytics and intelligent revenue growth management. CPG players need to equip sales and commercial teams with the ability to predict consumer behavior, in essence, to become intelligent consumer organizations and react rapidly.

Five things to get right

Reinventing CPGs means embedding intelligence and building data-driven muscles. And becoming less vulnerable to the market, consumer, and regulatory volatility. Here are five things to do differently now, to develop organization-wide strength and agility.

1. Lead with business value

To get momentum, align to business value; focus on the specific questions that need to be answered. Keep an unwavering focus on the business outcomes as you plan the required capital investments to light up the capabilities. Ensure the journey is continually measured using outcome-focused metrics and KPI’s.

2. Focus on critical data elements

Identify and invest in the 10-20% of data that drives 90% of the business value. With  an enterprise wide data strategy and foundation in place, CPG companies can better harness data’s power and leverage it as capital to help drive strategic differentiation in the marketplace.

3. Achieve speed and scale via the cloud

To rapidly transform and scale, companies need the right enterprise cloud strategy (e.g., single cloud, multi cloud) and architecture. One that is flexible and scalable. Cloud and analytics need to be connected to help unlock full value.

4. Pilot, then move on

Run experiments across markets and functional dimensions of your organization, i.e., testing consumer insights in one market, while measuring impact of digital manufacturing in another, to test the architecture and to ensure that the insights tide lifts all parts of the enterprise.

5. Build data-driven talent

To truly transform, talent is integral to the journey. New skilling for existing talent is key. And, identify talent gaps to potentiality infuse new talent to ensure data and insight literacy across all teams. This requires both a mindset and culture shift from the top of the organization all the way down.

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Sara Dastin

Managing Director – Customer Sales & Service Strategy

Sara Dastin is a senior executive who specializes in shaping and delivering complex transformation programs that help unlock significant value for CPGs.