By Krishnakumar Davey and Cara Loeys, Client Engagement, IRI
Recently we released the results of the 10th annual study analyzing the growth performance of hundreds of public and private consumer packaged goods companies, working with our colleagues at the Boston Consulting Group (BCG). And, as part of our webinar discussing these results, we invited three senior leaders from some of 2021’s largest and fastest-growing CPG companies to share their perspectives: Michael Del Pozzo, SVP of Sales and chief customer officer, PepsiCo Foods North America; Gary Osifchin, chief marketing officer and GM, U.S. Hygiene, Reckitt; and Jostein Solheim, global EVP, Health & Wellness, Unilever.
The discussion highlighted nine important and consistent themes that have been integral to leading CPG growth over the past year and which we believe are important to keep at the forefront during what may be another uniquely challenging year ahead for the industry.
- Avoid out-of-stocks. With a focus on operational effectiveness during a time of disrupted supply chains, CPG leaders have strived to avoid out-of-stocks at all costs. This is important so that companies don’t have to spend significant marketing and trade dollars to try to win back valuable consumers later. Ensuring that your product is in stock where they regularly shop goes a long way to helping retain them.
- Center on the consumer. An agile organization centered on the consumer is even more important to success now, as environments and consumer needs are evolving more rapidly. For 2021’s growth leaders, consumer centricity meant embedding brands in consumer experiences at home, answering community needs, providing self-care solutions, delivering personalized offers, leading with purpose and building brand trust. Lysol, a 130-year-old brand, did this in 2021 by meeting the demand for sanitization products in several new ways through its new Lysol laundry sanitizer, wipes, and on-the-go and toilet care products.
- Pivot to self-care. As consumers’ lifestyles have shifted and they increasingly seek proactive self-care, CPG leaders have been focusing on their products’ relationship to health. They have built credibility behind functional claims, emphasized transparency in ingredients and adapted their portfolios to support consumer health objectives. From wellness supplements to offerings focused on nutrition, hydration and performance, products that helped people take better care of themselves took off with outsized sales. Brands delivering on multiple functional benefits, such as Alani Nu, Celsius, Quest, Olly, Liquid IV and KIND, drove success for the 2021 growth leaders.
- Treat sustainability and social responsibility as performance imperatives. Increasingly, sustainability and a socially driven purpose are driving brand performance. For example, Dove’s CROWN Act advancing anti-hair discrimination and the Dove Self-Esteem campaigns boosted both the relevance of the brand and its bottom-line results. Lysol’s “Here for Healthy Schools” supported the reopening of schools after they closed at the height of the pandemic, while Air Wick partnered with the World Wildlife Fund to replant wildflowers in the Northern Great Plains. These efforts connected with and were relevant to the consumer, ultimately boosting brand performance.
- Deliver personalization. Over the past few years, consumers have developed heightened expectations for customized experiences that are likely to stick over time. CPG leaders continue to retool and upskill their organizations to deliver personalized experiences via increasing physical and digital touchpoints.
- Create true partnerships with retailers. Partnering with retailers, winning manufacturers such as PepsiCo are investing in forecasting demand, manufacturing the right products for shoppers, ensuring that their products are available in the right markets and stores, and investing in front-line employees to enable greater product availability and faster delivery across omnichannel.
- Increase digital touchpoints. The CPG omnichannel ecosystem continues to grow increasingly diverse and complex as e-commerce in various forms expands, such as with rapid-delivery apps, retailer media networks, direct-to-consumer sales and more. Leading players are optimizing this larger universe on consumers’ path to purchase, personalizing consumers’ brand experiences across a variety of digital touchpoints including streaming, social media such as TikTok and the metaverse to increase the effectiveness of marketing spend.
- Promote an agile culture. Successful CPGs emphasize the importance of cross-company culture in being highly agile and maintaining a continuous thirst for high performance while still being focused on consumers and their needs. Manufacturers that invest continuously in their people and their capacity are able to respond more quickly in a fast-moving, changing environment.
- Excel at contingency planning. If COVID-19 has taught all of us anything, it’s that being ready for the unexpected is necessary for both survival and growth. In a volatile CPG environment, leaders must be able to think in new, unique ways and build backup plans to their backup plans as the industry continues to see unprecedented levels of disruption. In all industries, black belt-level skills in operations are especially important, so that disruptions remain minimal and opportunities for growth can be more easily uncovered.
Read IRI and BCG's full 2021 CPG Growth Leaders study for details on the trends that mattered last year and predictions on the top growth drivers for CPG in 2022. If you have questions, please reach out to your IRI representative or IRI@IRIworldwide.com.