The answer is, in large part, yes. Consumer brands are evolving their value propositions to meet consumer needs, and several of the key themes coming out of CAGNY closely align with where the Index finds consumers are evolving for the future. Here are three main takeaways:
1. Accelerating the transformation agenda
Transformation was always on the agenda for many CPG brands, but COVID-19 acted as a catalyst to accelerate those transformational initiatives.
Where will those transformations focus? Consumer-centric innovation – a thread woven throughout many of the CAGNY presentations.
For most manufacturers, this means aligning product innovation, new business models and operational execution with new consumer needs, whether that’s affordability, health or experience. This means operating model transformation to become more cost efficient while driving growth. This means digital transformation to enable ecommerce and direct-to-consumer, and a more rigorous focus on data and analytics. This means portfolio transformation to strengthen the core and invest in high growth categories.
2. Sustainability as a strategic imperative
Many of the brands at CAGNY discussed sustainability not as a compliance and reporting exercise, but rather a strategic imperative to drive long-term stakeholder value. Companies are facing increasing pressure from all sides to become sustainable, especially from the consumer. With more than 30% of consumers identifying as Planet or Society First, ESG must be at the top of the company agenda.
Forty-four percent of consumers will pay more attention to environmental issues in the future, Another 43% say environment and climate change will be a top priority in how they live and buy and 1 in 5 will value sustainability among their most important shopping criteria in the long-term.
Sustainability is now a matter of trust. Manufacturers must consider its role in every part of the business, from sourcing and packaging to operations and investments.