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Not many CPG companies are prepared to make the most of "Big Data," according to a new study by the Grocery Manufacturers Association (GMA), which released the results of its Big Data study in collaboration with Deloitte Consulting, along with recommendations on how to tap into this exponentially growing resource.
The study, “Formula for Growth – Big Data & Analytics,” is the culmination of more than 10 months of broad-based industry research led by Deloitte and contains five specific conclusions and recommendations for how food, beverage and consumer packaged goods (CPG) companies can convert emerging forms of big data into useful analytics and insights to improve business results.
“Working closely with Deloitte, the GMA Information Systems Committee set out to help demystify the potential big data opportunities for the CPG industry and to better understand how we can continue to improve our overall analytical maturity using both existing and emerging sources of big data,” said Andy Platt, VP, enterprise analytics and insights, The J. M. Smucker Company, and chair of the GMA Information Systems Committee. “The goal of the research is to provide CPG companies with real and practical opportunities for leveraging the growing variety of available data and to drive insights for more effective decision making, ultimately leading to top- and bottom-line growth.”
Available exclusively to GMA member companies, the web-based, interactive application also includes a profile of top emerging technological and digital innovations that will usher in vast quantities and new forms of data for the CPG manufacturing and retail industry.
“It is hard to understate the importance of this report,” said Pamela G. Bailey, GMA president and CEO. “Consumer packaged goods companies are focused on growth like never before and it is clear that big data is an important driver of innovation and business growth.”
As part of the study, Deloitte incorporated a broad view of opinions and perspectives from cross-functional teams within leading GMA member firms, prominent thought leaders from the finance, technology and innovation communities, and notable academics and technology innovators.
“The research will assist CPG companies in understanding the broad set of capabilities and competencies required to improve their analytical IQ, with big data making that need even more urgent,” said Marcus Shingles, principal, Deloitte Consulting LLP. “The emphasis is on the need to think beyond data tools and techniques, and focus on analytical talent models, decision processes and cultural shifts. With the ‘new normal’ of rapid-pace technological and digital innovation, CPG companies will depend now more than ever on big data analytics to compete and grow.”
The five conclusions and recommendations identified in the research include:
- Few have the required analytical foundation in place: Over the last decade, the majority of CPG industry firms have not progressed beyond localized analytics and are still challenged to capitalize on their “small” existing data (internal and structured). Conversely, a handful of CPG firms have improved their analytical maturity to become strong analytical companies and therefore have the required foundation to capitalize on new emerging sources of big data.
- Rapid-fire pace of innovation requires data and analytics competency: The rapid-fire pace of technological and digital innovation has the potential to define winners and losers in the CPG industry, and an integrated core competency around small data, big data and analytics is a requirement for the winners.
- Industry is moving from linear change to exponential disruption: Until now, a CPG company’s competitive advantage did not depend on having strong analytical maturity; however, the industry’s preconceived notion of change is about to be disrupted by the exponential pace of innovation. Navigating this landscape will require companies to harness data and efficiently convert it to insights.
- Business context required – integrated and cross-functional business planning and execution: The “Formula for Growth” is most impactful when applied in the context of cross-functional and integrated business planning and execution. Whether small or big data, the goal is to consistently make better decisions to improve an organization’s planning and execution toward achieving top- and bottom-line growth objectives.
- Cultural shift -- the characteristics and traits of the new industry “winners”: This new “exponential” pace of innovation will require a culture of experimentation, trial and error, and other methods that enhance a company’s ability to remain agile, fluid and adaptable. A strong versus weak data and analytical maturity is one of the key differentiators between a CPG company that effectively navigates this new era of innovation and one that falls victim to the exponential pace of change.
Washington, D.C.-based GMA is the voice of more than 300 leading food, beverage and consumer product companies.