Times of Change for the CPG Industry

The first half of 2020 has seen the CPG (Consumer Packaged Goods) industry sector, under-go what most would consider to be a once in a life-time event, due to COVID-19. Like many industries, 2020 started with most expecting to see some level of increased sales, however, this quickly turned into a survival of the fittest, with those able to innovate, adapt and change at pace – taking advantage of the situation.

Hardest hit were those businesses in the CPG space, focused on supplying restaurants and the food service industry. Others focusing on consumer outlets and in particular, those who already had or could quickly establish an on-line market presence, benefited from the event greatly. With COVID-19 pushing many consumers for the very first time into on-line purchasing, the Business to Consumer channel demand, forced this change to come about at pace.

For many organizations operating in the CPG sector, the transition to respond to these changes, has required a re-write of the rule book. Most have seen on-line consumer spending increase, some more than double, along with a change in the mix of products that are being purchased. Some businesses have reported consumer demand higher on locally grown and locally manufactured products, while other sectors including beauty have noticed a marked drop in demand.

Add to this, the seismic shift that has occurred, from office workers to home workers, CPG organizations are needing to not only offer new products and services today, it is also likely that for most workers in the industry – the shift to working from home for the majority of their productive time, is to become the new norm.

The systems supporting many CPG companies today, will need to undergo a similar change to allow employees to work from home and be effective over the long term. Consumer change and demand will also drive system and process change needs to address their product demand requirements.

There will be winners and losers. Organizations with access to modern systems – those that can collect data from a variety of sources and develop multiple scenarios based on assumptions; to allow management to effectively change at pace to meet customer demand, will outgrow those that do not.

Although consumers have initially moved their purchasing to well-known brands, consumers are likely to move their spending preferences to organizations and brands who talk their language and meet their expectations.

We believe, CPG organizations who embrace an omnichannel sales strategy, transform their sales model, react quickly to customer sentiment and product demand – will outperform those that are unable to do so.

For this reason, if you find yourself with systems that cannot be quickly and cost effectively adapted and enhanced at pace to meet the demands of the new normal, it’s time to take a look at the next generation of enterprise application systems.

Written using No-Code or Low-Code development tools, these systems enable change and do not penalize you for change that enhances your customer experience.

The first half of 2020 has seen everything change. Continuing with “Business as Usual” is no longer an option.