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By Shiv Iyer, Accenture managing director, consumer goods consulting
While CPG companies business situations vary greatly, there is a common thread among the leaders: they have aggressively begun pivoting their focus from cost takeout to more holistic, profitable growth. C-suites at leading CPG companies have an intimate understanding of what consumers want across industries, constantly monitor external trends and regularly assess their end-to-end business operations with a critical lens. They’ve begun translating these forward-looking insights into the following six different strategies for reinvesting in growth.
1. Revamp your offerings
Leaders regularly innovate across a wide range of offerings—ranging from making packaging more convenient to expanding into cross-category bundling—to ensure they remain ahead of the competition in the eyes of their target consumer. For example, one leading confectionary manufacturer developed stand-up, re-sealable pouches that use less shelf space while some major CPG companies have pursued joint ventures to expand offerings and branch into new territories which indicates a strategy of targeting the changing preferences of mass-market consumers.
2. Get closer to your consumers
With the proliferation of social media and multiple digital engagement channels, the ability to influence and impact purchase has increased substantially. Industry winners excel at using data and analytics to closely monitor shifting consumer preferences across channels. Furthermore, they funnel these insights throughout their organizations to augment core capabilities, such as innovation, shopper marketing and pricing.
A large, global snack food manufacturer is using predictive analytics to analyze multiple categories and customer segments. Through data diagnostics, statistical modeling and a what-if simulation dashboard, the company is gaining clearer insights on past performance, seizing new opportunities for optimizing trade spend, and it can plan for the future with the help of predictive planning and selling.
3. Choose your channels
Leaders do not follow the pack—they determine the optimal channel mix for their specific business. Those determinations are based on what consumers want and what the portfolio strategy demands. Go-to-market structures and investments should align with these channels to drive sales.
Macro trends, such as shifting demographics (e.g. the rise in 55-plus, urban and Hispanic consumers), are pushing CPG companies to tailor their offers in the respective preferred channels in order to penetrate these segments, drive volume and build brands. Some high performers are executing tailored approaches for unique channels. It's anticipated that the strongest growth will come from non-traditional channels.