Reset, redefine and reinvent to build a resilient CPG organisation


Reset, redefine and reinvent to build a resilient CPG organisation

Kumaran CR, Consulting Practice Leader, Adete Thakur, Consulting Lead

The current headwinds facing CPG organisations make a compelling case for cost optimisation and recalibration of business value chain.

Kumaran CR, Consulting Practice Leader, Adete Thakur, Consulting Lead

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Kumaran CR is the Consulting Practice Leader for UST Australia and New Zealand and is based in Melbourne.

He has led Strategic and Digital Business Transformation initiatives for multiple industries including CPG and Retail organisations in the US and APAC regions over the last 17 years.

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Adete Thakur is Consulting Lead - Strategy and Business Transformation for UST Australia and New Zealand and is based in Sydney.

She has helmed various strategy and commercial roles for market leaders, challengers, and start-ups in APAC over the last 14 years.

Manufacturers of consumer packaged goods have had it tough in recent years. Skyrocketing input costs have eroded margins, workforce shortages abound, and global supply chains continue to be disrupted.

Meanwhile, competition has tightened. Large players are looking for vertical integration, retailers are focusing on private labels, and a fierce battle is raging for physical and digital shelf space to increase that all-important share of the customer’s mind and wallet.

Adding to these headwinds are ever-evolving customer expectations. Today’s customers want meaningful experiences, seeking out value, convenience, and flexibility on their own terms.

According to the Australian Bureau of Statistics, online retail turnover increased by 22.8% ($677.9m) in the year to February 2022. The increased adoption of online shopping accelerated by COVID has made product discovery and comparison much easier, with greater price transparency. And these behaviours and expectations are to stay.

As a result, there’s a compelling case for CPG companies to recalibrate their business models and value chain.

Here are the three tenets we expect CPG business leaders to focus on:

Key challenges facing CPG companies

While these are some of the common challenges organisations face today, their magnitude, complexity and potential impact will vary. How you prioritise these challenges will depend on your organisation’s strengths; its brand, revenue, and market positioning; and the maturity of its data, technology and people strategies.

Unlocking and realising value

The key to addressing all of these challenges is alignment. Strategy needs to align with ways of working, with processes, with governance and with technology enablers.

There are three fundamental steps to unlocking more value across your organisation using UST’s proprietary Value Realisation Framework:

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The COVID-19 pandemic disrupted global supply chains while simultaneously accelerating digital adoption by consumers. But as supply chains and economies began to recover, the Ukraine-Russia conflict triggered a second wave of disruption.

But within every crisis there is opportunity. For CPG companies, that opportunity is to future-proof their business models and become more resilient:

The quest to deliver profitable and sustainable growth requires a digital business transformation – one focused on customer-centricity, agile teams and data-driven decision making. And at the heart of this transformation are scalable, flexible cloud-native technologies that are secure by design.

Are you prepared?