Leading CPG Companies in a Consumer’s World
At the dawn of a new decade, it is a consumer’s world. Empowered by new technologies and extraordinary access to information, consumers are driving change at an unprecedented pace.
Consumers are the North Star for the CPG industry. Every product is designed to meet their needs and wants. And every decision considers the impact on the consumer. Our Industry View 2020 report revealed that 86 percent of CPG leaders said the consumer had the greatest impact on their decision-making — making them the de facto regulator of the industry. Nothing else came close, not shareholders and not federal or state regulations.
Many of the issues CPG companies contend with on a daily basis are invisible to consumers. Consumers see a brand of shampoo they like now has packaging made from recycled plastic; they do not see what went into creating it, from the manufacturing company’s focus on developing sustainable technology to the number of regulations — federal and state — the new packaging had to comply with to arrive on the shelf in front of them.
The issues that the consumer doesn’t see were the focus of Industry View. CPG executives from Consumer Brands’ membership were asked to weigh in on what’s impacting their business and earning their focus in 2020.
Four Numbers Keeping CPG Executives Up at Night
- Three times as many CPG leaders said that patchwork state regulations created more burdens in terms of staff time and cost than federal regulations. Inconsistent or conflicting state regulations create burdens for consumers too. California, for example, may pass a regulation intended to serve as a model, and New Jersey and Wisconsin may decide to use the model but change it slightly in each case. Creating unique products to accommodate each state’s rules can become costly or impossible, which can affect the access and affordability of products for consumers.
- 93 percent of CPG leaders estimate they spend more time on sustainability issues today than they did just five years ago. It’s also growing in importance within companies. In 2004, Linda Fisher was named the chief sustainability officer at DuPont. She was the first person on record to have the title, but in less than 16 years, the ranks of fellow CSOs have grown. In the CPG industry, 71 percent of respondents said that sustainability either reported directly to the C-Suite (57%) or was a C-suite position in their company (14%).
- Transportation capacity costs still rank for CPG leaders — fourth to be exact. The cost volatility experienced in 2018 has not been solved for, outside of what companies can do on their own, and CPG leaders are still keeping a careful eye on the issue.
- $102.7 billion in exports a year makes trade a top issue. After a volatile 2019 that reexamined longstanding trade norms — primarily with China, Mexico and Canada — tariff and trade wars ranked second on the list of political issues CPG leaders anticipate impacting their business in 2020.
The four numbers above are hardly the only ones weighing on the minds of CPG leaders. Everything from internal issues like attracting and retaining talent to external issues like election outcomes are part of the calculus CEOs have to do every day — all while constantly asking themselves how they can deliver the best product to the consumer. But it’s a balancing act that makes all the difference.
Published on January 21, 2020
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