As the U.S. economy continues to improve, consumer confidence has been on the rise, which would typically indicate growth for consumer packaged goods manufacturers as well. However, according to a new Hot Topic Report from Acosta, a sales and marketing agency in the CPG industry, unit sales are flat across most categories, and trade promotions continue to decline as a key factor in driving incremental volume. This decline leads to more unprofitable sales for manufacturers. Despite this, CPG manufacturers continue to allocate an average of 15 percent to 20 percent of gross sales to trade promotion.
Analyst Insight: It is important to recognize that a consumer packaged goods company's network determines its supply chain efficiency and customer satisfaction. Designing an optimal supply chain network means the network must be able to meet the long-term strategic objectives of the company. Most business units or functional areas within a company are impacted by network design efforts; therefore, the involvement of key stakeholders is imperative. - Bruce Tompkins, Partner, Tompkins International
Analyst Insight: Consumers want the same experience regardless of what supply chain is in play. Consumers' expectations are growing and now the brands must be more cognizant of their supply chains and how it supports the brand. The dynamics between CPG - retail - consumer has changed drastically. Consumers no longer distinguish between channels and therefore CPGs themselves must be more proactive to manage their role in this ecosystem. - Guy F. Courtin, Vice President & Principal Analyst Constellation Research
Analyst Insight: Data has become as consumable as a box of crackers. As a society, we expect information about product origins, ingredients, allergens and other information will be available at our fingertips prior to purchase. However, data inconsistencies often frustrate consumers on their quest to learn more and can stop them from completing their purchase. As a result, consumer packaged goods (CPG) companies are focusing on data quality to satisfy the demands of increasingly empowered consumers. - Angela Fernandez, Vice President of Retail Grocery and Foodservice, GS1 US
Analyst Insight: Digital business creates new opportunities for consumer packaged goods companies to transact directly to their end consumers. Digital business is information-enabled business that employs an abundance of new information in ways that better service customers. Bottom-line digital business offers the potential to transform the way that CPG companies interact with and serve their customers allowing them to create new operating models that tighten the bonds with their end consumer, which has the potential to transmogrify the CPG industry. - Dwight Klappich, Vice President, Supply Chain Research, Gartner
You feel the energy soon after disembarking at Hazrat Shahjalal International Airport in Dhaka. All of Dhaka, the capital of Bangladesh, seems to throb with bustling masses of people. Bridges, expressway overpasses, and major new neighborhoods are continually under construction. Evidence of the country's rising disposable income is on display at crowded shopping malls such as Jamuna Future Park, the largest in South Asia, and new billboards, which seem to cover every available space, advertise products as varied as packaged foods and smartphones.
The most pressing concerns for consumer packaged goods companies today are transportation and network redesign - priorities that just two years ago barely registered on their radar, according to a report by The Boston Consulting Group and the Grocery Manufacturers Association.
Eighty percent of CPG supply chain leaders say transportation is now their greatest worry, according to a report by The Boston Consulting Group and the Grocery Manufacturers Association, A Hard Road: Why CPG Companies Need
a Strategic Approach to Transportation.
The consumer packaged goods sector is a giant with global sales exceeding $550bn. The markets that make up this global sector are diverse in character and research for Ti's latest report, Global CPG Logistics 2015, has identified the key differences between them.