Consumer Product Goods

cognitus and the cpg industry:

The (CPG) industry has rapidly evolved to meet consumer demands, thanks to digital technology allowing brands to carve out markets by selling directly to customers - from online orders and delivery to personalized meal kits and more.

Challenges creating opportunities in
the CPG industry:

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.

delivering on the consumer products
industry vision 2025

Delivery will require you to build new sets of competencies that traditional strengths. Such competencies include.

  • Crating new, engaging consumer experiences

  • Executing with speed and agility to exceed consumer expectations

  • Fulfilling demand seamlessly and efficiently

    Delivering the end-to-end transparency that creates enduring consumer trust

Underpinning all these competencies is the crucial element of talent- because without the right people in the right roles enabled by the right tools, any effort to transform is bound to have only limited success.

SAP® Customer Experience solutions and the Intelligent Enterprise for the consumer product industry consistently offer a single, unified technology stack to streamline key processes, enable a single view of the consumer and deliver personalized shopping experiences.

traditional consumer experience

The consumer has a single, treaded journey with inconsistent experiences. Confusing offers and messaging that is not targeted to consumer needs ultimately diminish consumer loyalty. This traditional experiences bases on:

  • Driven by the quest to improve market share, leading players in the CPG market are facing several challenges that are impeding business growth.
  • Siloed, expensive innovation strategy with sporadic new-item successes and huge investments in innovation for products where the majority of new items don’t last more than three years.

  • One-size-fits-all marketing strategy that wastes trade and marketing funds.

  • Limited visibility in-store conditions and consumer preferences and disconnect among channel partners that exacerbates out-of-stock conditions.

  • Disjointed e-commerce strategy that fails to capitalize on the growth potentials.

new-world consumer experience

Personalized offers delivered in micro-moments mark the difference between a company making a sale or the consumer making switch.
The new experience is based on:

  • Consistent master, customer (business-to-business[B2B]), and consumer (business-to-consumer [B2C]) data across all channels to enable consistent and meaningful experience

  • Full visibility of the entire value network, form sourcing and partner networks to in-store conditions and actual consumption.

  • Live access to, and use of, both structured and nonstructured demand drivers to assess market dynamics in real time.

  • Scaled, qualitative analysis of consumer experience sentiment and feedback to deliver a unified, personalized user experience.

next-generation business processes in an
intelligent enterprise:

SAP is enabling platforms for integration and collaboration that allow consumer product companies to compete as ecosystems. This not only means inter- and intra-company collaboration across functional units and among customers and suppliers; it also enables companies to leverage new distribution channels and new capabilities for supply network visibility such as connected assets, new avenues for consumer engagement, and trust through traceability and provenance.

Enabling new business models

Enabling new business models




Inside-out approach


Integrated process with customers and consumers




Many interactions


Dtreamlined business processes


Intelligent planning
and scheduling


Disconnected spreadsheets


Collaborative planning profitable decisions

Supply chain

business planning


Siloed spreadsheets and no simulation


Collaborative integrated business planning


driven marketing


Product marketing


Personalized consumer marketing

Sales & services

New sales models




Direct consumer

Delivering personalized experiences

Delivering personalized experiences


One style fits many; siloed, mass-production approach;
protracted time from design to delivery


Agile, consumer-driven design executed and delivered
quickly through an integrated, end-to-end process

Collaborative product


as a silo


insights used to
create offers
with partners



Various steps for delivery


Direct shipment from supplier to consumer

Connected assets


Limited visibility of assets (for example, food and beverage coolers) that leads to out-of-stocks, downtime for unforeseen repair needs, and costly theft.


Network of assets connected through the lo T, providing vast, centralized visibility to minimize out-of-stocks and enable predictable maintenance.

Competing as an ecosystem

Competing as an ecosystem

Food provenance, traceability, and recalls with blockchain


Limited visibility across the supply chain; slow information flow in recall situations, leading to higher losses and loss of consumer trust.


Immediate availability of detailed food provenance information to consumers; rapid, blockchain- enabled identification of the problem source in recall situation; and immediate communication of recall information to all stakeholders.

Enabling new business models

future key technologies:

Intelligent technologies enable great benefits, such as gains in productivity and efficiency, innovative new business models, and personalization based on deep analytics. The following key technologies are instrumental in helping consumer product companies realize these benefits.

artificial intelligence and machine learning:

Today, machine learning algorithms accomplish tasks that, until recently, only expert humans could perform. Advances are enabling machine learning to become highly accurate in natural language understanding, and in image and speech recognition.

Digital assistants and conversational user interfaces are already emerging as the next generation of support for customer interaction with businesses, ranging from simple customer service to more complex processes. In the consumer products industry, leading examples include invoice matching, claims matching, and virtual self-service.

advanced analytics:

The integration of advanced analytics capabilities into applications enables business users to analyze transaction data on the fly and drive better decision-making. This occurs through proactive, embedded, predictive analytics that empowered users can use to simulate the impact of business decisions and achieve better customer outcomes.

Cognitus CPG successes:

Cognitus has aided many CPG companies in achieving their goals. For example, TreeHouse Foods Inc. is a leading manufacturer and distributor of private label packaged foods and beverages. They offer better-for-you, natural and organic products in 26 of our 29 categories and have a private label leadership position in 17 of our 29 categories.

TreeHouse Foods makes high quality food and beverage products that its customers proudly sell to consumers across North America every day. See the many ways in which we helped them better their business:

Treehouse foods Benefits

Provision of framework to implement SAP at "merger" plants

Actual cost and Profit transparency (COGS by cost components)

AOP and ML close Process Standardization

P&L by customer/product

Reduction of yearly AOP efforts

Faster month-end close (incl. auto-posting BS on/off)

Represent Inventory at Actual Cost

Increase bottom line profitability (through better information & decisions)

Tyson Foods has one of the largest and most robust protein portfolios in the food industry - many of the brand leaders in their categories. Tyson embraces the diversity of its team members, customers, stakeholders and consumers - their unique background, experience, thoughts, and talents.

Everyone is valued and appreciated for their distinct contributions to the growth. Listed below are a few of the ways in which we helped them progress:

tyson foods Benefits

Unified reporting across merged companies

Month-end and AOP Process Standardization

Actual cost and Profit transparency (COGS by cost component)

Product level Profitability/Gross Margin Reporting

Reporting Inventory at Standard & Actual Cost

Report Standard & Actual Value of Inventory by product