Culture and technology fundamentally alter how people live, work, and play – and, most importantly for CPG brands, how we satisfy basic and aspirational needs.
So what will the future of the CPG industry look like, and what does it mean for CPG companies? We’ll talk about that in a moment. And if you would like to read the whole report from Accenture, click here.
New Era of Innovation
Consumer expectations are rising, and companies struggle to keep up with the ever-increasing pace of change. Technology doesn’t help as it continues to rewrite the rules of business and reimagine what is possible.
Meanwhile, Accenture has studied that people care about 4 areas:
- Holistic health and well-being
- Virtual (Re)creation
- Becoming the best person
- Doing real good
Source: New Dawn for CPG, Accenture report
As technology advances and new disruptions emerge, including the metaverse, these shifting habits represent an inflection point. In order to redefine the industry, CPGs must put real people at the center of their thinking and embrace new technologies.
Consumers expect to be involved at every stage: as investors, manufacturers, marketers, or sellers. The shift is generating a tidal wave of innovation – and increased competition. The past decade has seen five new CPG brands launched every week, often with business models that defy conventional wisdom.
The Path Forward
It takes time for large organizations to break free of their legacy mindsets and operating models. This encompasses the long-established strategy for achieving industry leadership.
The CPG industry has traditionally focused on pursuing industry best practices in order to win. When the company gets to “best-in-class,” however, technology and consumer habits will have changed, so what is “best-in-class” will change as well.
Human-led, data-driven CPGs are capable of reimagining, growing, and reengineering. In this way, these companies can gain visibility across their entire value chain and have the flexibility to manufacture as needed. So, in order to become future ready, companies must incorporate humans as active participants in the branding process.
It is a simple story, yet profound at the same time. CPGs that are future ready will:
Source: New Dawn for CPG, Accenture report
Prepare CPG for the Future
What do you need to do to be prepared for the future in the CPG industry? Here are examples:
- Identify and scale new growth opportunities
It is time for companies to change the way they identify and realize new growth opportunities in CPG. They must move from thinking about the “total addressable market” (defined by existing CPG categories) to the “total addressable problem”.
It is no longer enough to follow the old pathways to innovation because people want holistic solutions. Therefore, embracing new business models, disruptors, and innovations from outside the industry is crucial to taking advantage of these unconventional yet tremendously valuable opportunities.
- Create and deliver extraordinary experiences
A Future Ready CPG will focus on the individual, collaborating with them as a partner. R&D, marketing, sales, and customer service will all be based on human needs and preferences. Consumers and customers will also enjoy seamless, relevant experiences across all channels.
- Invest in your people
Companies increasingly express concern about their ability to retain the intrapreneurial, flexible, and future-skilled talent they require to execute on strategy. What’s more, by empowering and aligning their people around their organizational purpose, Future Ready companies will enable democratized decision-making – and will deliver incredible productivity.
- Unlock potential
CPGs that are Future Ready will focus on defining value more comprehensively, allocating and reallocating resources to meet consumer demands, and maximizing ROI.
- Bet on sustainability
A future ready CPG must incorporate sustainability into every aspect, and it is an overarching commitment. Investing in change piecemeal today does not meet the rapidly rising expectations of consumers, often leading to accusations of greenwashing. Sustainability drives long-term growth and viability for tomorrow’s leading companies.
But how to get started to be part of the future in CPG? With these 5 steps:
#1 Analyze your organization’s overall strategy and evaluate your current performance.
#2 Ensure your leadership aligns with the prioritized characteristics.
#3 Make sure that your future ready initiatives are complementary and interconnected.
#4 Consider your organization’s ecosystem to determine whether you have the right partnerships and resources.
#5 Incorporate future-ready status into your overall business strategy.
To sum up
People’s priorities and habits are changing rapidly, so the CPG industry must keep up with these changes. In addition, CPG companies should forecast customer expectations. Therefore, if you are interested in this industry, you need to be aware of its future, opportunities, and threats as well.
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