3 CPG Industry Expectations for State of the Union

President Biden will enter the House chamber for his first official State of the Union on Tuesday. He’ll deliver his address at a time that the eyes of the world are fixed on Ukraine and life in America is shrouded in uncertainty, over everything from COVID-19 to inflation.

After two years of life in a pandemic and the shocking actions of Russia that began Wednesday night, Americans are uninterested in political theater. They want to hear it straight. While we can anticipate the president will do some resume reading from his first year in office, his focus should be on proving he understands the issues keeping Americans up at night and that his policy objectives are aligned with solving those issues.

Much of what’s keeping Americans up at night is shared by the consumer packaged goods industry. As makers of food, beverage, cleaning and personal care products, our industry is integral to consumers’ daily lives. Throughout the pandemic, the industry has proven to be essential — and consequential.

What affects the CPG industry affects the consumers we serve. And government policy affects the industry. We hope to hear smart policy proposals from President Biden that support the industry’s ability to deliver for consumers.

We appreciate the challenge the president has ahead of him. The State of the Union demands multitudes and, this year, a substantial and necessary focus on Ukraine. It is our hope that its content also includes three issues of importance to the CPG industry, detailed in a series of posts from the Consumer Brands team:

Fight Inflation, Don’t Shadowbox Imaginary Opponents

This is not an easy economic environment. There are no easy answers or easy villains. We hope that the president’s plans to tackle inflation are focused and impactful — and come with the recognition that fighting inflation means hitting at root causes, not shadowboxing imaginary opponents.

For months, we’ve seen indicator after indicator continue their inexorable climb. Demand is up. Wholesale costs are up. Shipping costs are up. Labor costs are up. And, yes, consumer prices are up. And all of those threaten to go up even more as the uncertainty over Russia’s actions hits energy and commodities markets. Inflation is not transitory as the administration had once hoped. It’s time for a harder look at government’s role. Read more…

Offer Answers on the Labor Shortage

Despite an unemployment rate of 4.0% — only slightly higher than the pre-pandemic low of 3.5% in February 2020 — the U.S. is facing a labor crisis. As the Great Resignation takes hold, consumer packaged goods companies and other businesses struggling to hire surely expect to hear President Biden’s plan to address the labor crisis.

If we do not address the labor crisis, the consequences will be untenable for American consumers. But there are limits to what companies can do alone to address this crisis. Paying more — in the case of CPG manufacturing workers 8.3% more than last year — and expanding benefits is not changing the equation. There is a role for government here and it must be a priority for the Biden administration. Read more…

Make Recycling Part of the Environmental Agenda

The Biden-Harris administration has made environmental sustainability core to its agenda — and with good reason. As the planet heats up and the stakes get higher, the need to take a holistic view of sustainable actions has never been more important. Improving the American recycling system must be part of any comprehensive environmental strategy.

Recycling is only one component of the environmental agenda, but an important one that shouldn’t be overlooked in the State of the Union or in American policy. We do not have to accept a stalled recycling rate as our fate, though we cannot expect results if we don’t fix what’s broken. President Biden needs to reinforce a renewed commitment to fixing the American recycling system. Read more…