The pandemic had a significant impact on the CPG industry, causing rapid shifts in consumption patterns. While many companies had to deal with reduced demand for their products, other companies had to ramp up production to meet an unprecedented spike in demand. These changes occurred at the same time consumer packaged goods (CPGs) companies were looking to come out of a decade of slow and inconsistent growth as the CPG industry economic profit growth was only 3.2% between 2010 to 2019.
To achieve and maintain long-term growth, CPG companies must make strategic plans to adjust to the rapidly shifting market to take advantage of the potential opportunities that appear in the market. Brands must adopt a comprehensive and analytics-driven approach to increase their revenue, and the first step to this is to understand the contours of the next phase of post-pandemic reality. This article looks at how FMCGs can drive and consolidate growth in the long term as the world struggles to find its new normal.
The effects of the pandemic on the CPG industry
The landscape of the consumer goods landscape company has been reshaped by the pandemic, which has had diverse effects on revenue and growth of different CPG companies. Some product categories, such as non-perishable groceries, and household & cleaning supplies experienced significant growth of 25% and above as more people stayed at home due to lockdown measures, while other consumer categories like alcoholic beverages experienced significant drop in demand as bars and restaurants remained closed. The pandemic also had a significant impact on channels, as e-commerce and omnichannel sales have increased significantly, while in-store sales have experienced a drop in sales as foot traffic into physical stores also dropped significantly.
The most significant change that the pandemic brought, however, is the change to consumer behavior and consumption patterns. As consumers had their daily routines affected, their consumption patterns also changed, which affects their demand for products and services. As retailers and merchants also begin to attempt to implement digital solutions like ecommerce platforms and delivery services, they can begin to understand their customers better and provide them with more personalized services.
How brands can drive long-term growth with digital solutions
Experts continue to predict that the consumption patterns will continue to shift in the days ahead as more channels open and customers discover new products and services. To drive growth and consolidate on it for the long-term, brands must have real-time visibility over their distribution network to understand the shifting market conditions, identify bottlenecks and take advantage of potential opportunities.
Currently, FMCG brands, especially those in emerging markets operate with a linear distribution model that is inefficient. They do not have real-time order and inventory management, neither do they retain control over their goods as it passes along the distribution chain. This lack of visibility also means that they cannot accurately predict real-time changes of consumption patterns and buying habits and cannot react in time to capitalize of any opportunities that appear, which is a crucial competence that brands need to have in a post-pandemic world. This lack of real-time, reliable data also means that marketing teams do not have enough insight into their customers to carry out effective marketing campaigns.
Therefore, the traditional model that businesses employ leaves them handicapped when driving long-term MoM growth as they keep losing revenue, and market share. The solution to this problem is to adopt a digital solution that allows brands to predict, see and analyze market occurrences in real time. Which is what RedConnect does for brands, distributors, and marketers.
Driving growth with insights from RedCloud’s open commerce platform
RedCloud has built the CPG industry’s first open commerce platform that allows brands, distributors, and merchants to sell smarter, buy better, and pay simpler. Different from other digital marketplaces or ecommerce solutions, our revolutionary open commerce platform unlocks the full value of the distribution chain by transforming every industry connection and partnership into a potential data point that provides real-time visibility over order and inventory management. Brands now have insights into what happens to their products from their stores up to the retailer’s shelves.
With these powerful insights, brands can easily identify inefficiencies and eliminate bottlenecks so that their processes are faster and smoother, and with additional knowledge of consumer behavior, marketing teams can create buyer-specific marketing strategies and devise new trade marketing campaigns that can increase sales by up to 20%. With RedCloud, brands now have the power and the insights to consolidate on the growth they have experienced in the past to drive long-term growth.