What got us here won’t get us there: A new model for the consumer goods industry

COVID-19 is amplifying 12 trends that have been disrupting consumer goods for the last decade. Leaders will adopt a new model for ‘where to play’ and ‘how to win’ that gets their evergreen brands on the right side of the trends and helps their small brands scale up more quickly. Together these changes will fuel the next generation of industry growth.

After 40 years of outperformance enabled by a widely used five-part success model, the global consumer packaged goods (CPG) industry struggled to grow over the last decade. Why? Because 12 disruptive trends have diluted the old success model for growing mass brands. Now the COVID-19 crisis is amplifying many of these trends, triggering an industry imperative to change.

CPG players need to rethink their portfolio priorities and “where to play” choices to increase their exposure to growing markets, channels, and subcategories. These shifts will necessitate more dynamic resource allocation and greater use of mergers, acquisitions, and divestitures (M&A&D) to improve portfolio composition.

CPG companies also need to adopt a new how-to-win model that reinvents marketing to focus on consumer relevance and builds new, largely digital commercial capabilities to grow with growing channels and markets, especially in emerging Asia. CPGs need to enable these new commercial capabilities with an evolved operating model that prioritizes consumer closeness and local decision-making in key markets, as well as intelligent productivity gains to fuel commercial investments.

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Πηγή: mckinsey

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