FMCG Industry- Changing Times
By: Hitomu Maki
Tags: Marketing, Cpg, Sales, Digital Transformation, Fmcg

Flight or Fight for Survival

Disclaimer: This is neither a theory lesson on FMCG industry and how it works nor a dictum on the sure shots/winning areas.

It is an attempt to understand the causes of turmoil which is happening inside FMCG companies who are on one hand trying to battle external macroeconomic factors such as rising commodity prices, currency fluctuations, while another hand is dealt with nimble, fast, new-age competition, then there is this uphill task of managing internal systems and processes, the legacy of the old worlds.

Amazon says- It is earth’s most customer-centric company and they have no qualms about competition and short-term gains. Their entire focus is on how to better CX. The growth rate for this company is 20%+ Vs some of leading FMCG companies who are happy with flat or 1–2% organic growth. What are they missing?

Customer Centricity: Guess it is becoming fashionable to say that “ I am customer focused”. Does traversing your customer touch-points across channels- online/offline really count? All I see is a race to capture mind space with bellowing honks- try me. But why? What has changed? No one focuses on that. Because it is painful. Being innovative YoY- in products, delivery, distribution is something which does not come easy. What was the last innovation you did? Transformation: I don’t know who coined this term but I am sure they would have had noble thoughts in seeing world through different lens and changing it. I am not talking about total disruption but at least a gradual one. This phrase “ digital transformation” — it is catchy. Deep diving in these two words- Digital(ambiguous, complex possibilities) and transformation(inspiring/future state which again is open to interpretation/self-design)- Double ambiguous leading to rightly not very tall-order deliverance of promises & huge spends. Will this one phrase solve all my problems- past and future? Start-Up Vs against being: Being a start-up has its own benefits. Quick decision making and action. Large companies- being nimble-footed is a change management re-org design exercise. In fact, very rarely, you see large companies behaving agile systematically unless it is will of a single charismatic leader. FMCG incumbent players have budgets to take on- all they require is will and to act fast. It is a question of self-belief at an org level. Do you have that self-belief? True Connect: Then there is this whole sham around messaging/content/connecting with customers. Consumer products evoke a few memories- the advertisements for a long time have told us that we can be better human beings if we use their products. The truths are moulded as per business interests- a 100+ years old company who is market leader in personal hygiene products entered a country whose citizens used salt/charcoal to clean their teeth and attacked that habit on premise that it is bad for your teeth, only to come back after 50 years with a high-decibel Ad-campaign which asked common folks- if their tooth paste contains salt? If no, they are missing the key ingredient for clean and shining teeth. How different is this than the fake news mania? Another example of short term memory of crowd & taking advantage of their gullibility. Are you doing responsible messaging?

Guess, people and companies are afraid and I don’t understand why. Is it lay-offs the fear of which will make me- a mid-manager not do things which make sense in the long term and just do enough to cling onto my job or it is fear of Mr. Peltz(or alikes) which do not let me place right bets as a CEO of an FMCG company. Whose loss is this? Time to think beyond TSR?