Consumers have looked beyond “products” for years:
The big disruptions
Several disruptions are forcing CPG companies to think and work differently to survive in the digital age:
Four winning strategies in the era of relevance
By following these four “winning strategies” CPG companies can identify opportunities to make a wise pivot and drive radical change:
- Balanced brand portfolio
Growth will come from realigning the business model and balancing the portfolio to create products, services and organizations that consumers find relevant. Consumers value authentic brands built on trust, purpose and loyalty. There’s no “one size fits all” and brand preference will continue to vary by demography, category, mindset and brand lifecycle.
- Integrated marketplaces
Successful CPG companies think about interaction in different ways. They’re creating an integrated “living” marketplace, offering consumers relevant products and experiences across an ever-expanding number of touchpoints. Using detailed insights into how consumers interact and what they need, employees in these companies operate on the front lines where their brands meet consumers: adapting content, offers, even packaging, across ubiquitous channels and experiential moments to stay relevant.
- Agile businesses
CPG companies need to transform to become efficient, agile businesses—leveraging the power of the ecosystem, driven by a new operating model and inspired through cross-functional collaboration.
By leveraging extensive ecosystems, companies will need to do much less in-house than ever before. Co-operation will increase, with companies that were previously competitors working together to deliver value that they cannot create/deliver on their own.
- Digital operations
CPG companies must reinvent their operations to keep up with new consumer requirements ranging from faster purchasing in a “fluid marketplace” to increased desire for sustainability, greater demand for personalization, and localization. New technologies—IoT, AI and machine learning, robotics, blockchain and AR/VR—make it possible for companies to design and run operations in new ways, with the help of a liquid workforce.
How are companies reacting?
Traditional CPG companies are willing to change, but some challenges are holding them back. Large CPG companies still play an important role in consumers’ lives and, of course, in retail economics. Brand household penetration and repeat purchases are both high and a significant number of leading brands continue to grow. Overall, they’re maintaining market share.
Emerging, disruptive brands are stealing market share (primarily from mid-sized CPG companies) and growing more rapidly than the larger players. Consumers demand the new brands and, recognizing that retailers are willing to give them shelf space.
The priorities for established companies? Pivot their portfolios toward higher growth and a more profitable mix of businesses. Then, within each line of business, develop an evergreen portfolio of leading and emerging brands to make the overall economics work.
1. Scott D. Anthony, S. Patrick Viguerie, Evan I. Schwartz and John Van Landeghem, Innosight Strategy and Innovation Consulting, (11 February 2020), "Corporate Longevity Forecast: Creative Destruction is Accelerating".
2. Accenture CEO and CMO Global Insights Survey, 2018.
3. From Me to We: The Rise of the Purpose-Led Brand. Accenture Strategy Global Consumer Pulse Research, 2018.