Challenges creating opportunities in
the CPG industry:

• Driven by the quest to improve market share, leading players in the CPG market are facing several challenges that are impeding business growth.

• Today’s shoppers are more harried than ever before. Fragmented lifestyles demand of work and social pressures all mean that people have - or at least feel they have - less time. This drives more people to use subscription services, where they get everyday items. It is hard to influence shoppers to try new products, switch brands, or buy more with volume discounts and offers.

• Anticipate and resolve supply assurance problems quickly with collaboration dashboards that alert you to supply and demand mismatches. Onboard all your suppliers using our on-demand tools, multiple integration options, and supplier enablement teams with decades of onboarding expertise.

• The problem for grocery CPG firms is that the more consumers buy ready-made food, the less they need certain CPG products, like canned tomatoes or cooking oils. The impact of one individual consumer’s switch is small, but they collectively add up to a massive reduction in CPG product purchasing volumes.

• Consumers have much more control in online channels than in stores.

• The issue for CPG firms is twofold: they potentially lose sales to own-label products, and they run the risk of having to reduce their own prices, thereby compressing margins.

• By 2025, we expect consumer product companies that can deliver more with less through automation and efficiency - redefining asset utilization, speeding up decision-making, and addressing evolving talent needs - to lead the way.

• By 2025, we expect consumer product companies that can deliver more with less through automation and efficiency - redefining asset utilization, speeding up decision-making, and addressing evolving talent needs - to lead the way.

The companies on top will be those that can shift their core competency from selling to consumers to serving them. They will be able to continuously engage with consumers to unearth insights that can improve consumer experiences and outcomes. These companies will move from traditional consumer product retail value chain to focus on consumer outcomes such as health and wellness, security and control, social awareness, and more.

Today’s consumers have so many options - from product to channel to delivery - that they expect to be provided with choices that are best for them. This changing dynamic puts increasing pressure on consumer product companies to understand and engage with consumers on an individual level. In addition to these changing consumer dynamics and other related trends (illustrated below), tremendous volatility persists in basic costs - from raw materials and labor to shipping and beyond.

Limits of the shelf

. Limited selection of high-volume items.
. Mass brand building and innovation for consistency and scale.
. Punishment for brands that undeperform; limited access for small and local brands.

Channel proliferation

. New channel and format growth.
. Explosion of SKUs resulting in increased cost and complexity.
. Conflicting channels - mass mechants, e-commerce, and discounters.

Paradox of choice

. Elimination of shelf space limitations through e-commerce.
. “Long-tail” opportunity for small, niche brands.
. Consumer confusion and frustration due to unlimited choices.

New experience imperative

. Provide value throughout the consumer journey.
. Cater to the desire for flexibility, simplicity, and personalization.
. Deliver solutions rather than options - wht is best for the customer.

In short, consumers expect a new experience that makes their lives easier while being personal, relevant, and simple - where commerce is seamless; technology is invisible; and privacy, security, and trust are assumed and assured. Consumers do not want to be sold to or influenced. They want to be inspired, guided, educated, and helped, and will reward companies that differentiate based on personalized experiences and outcomes.