Barb Renner, Companies may undergo a major shift in their brand management approaches, their relationships with suppliers and retailers, and their business practices along the entire value chain. Still other consumers are focusing on the well-being of their community and on their community’s values—which, more and more, include concepts like “green,” “local,” and “back to nature.” Today, a sizable portion of consumers describe themselves as health-conscious shoppers (47 percent). For instance, 16 percent of consumers are willing to pay more than a 10 percent premium for healthier versions of products, while 55 percent are willing to pay up to 10 percent more.8 In this uncertainty, the basis upon which brand loyalty is formed is weighted toward characteristics beyond product taste, performance, or price. Copy a customized link that shows your highlighted text. See Terms of Use for more information. We expect the importance of digital commerce to be amplified by the rapid pace of technological change. Fifty-five percent reported an annual household income of less than $50,000, 27 percent earned between $50,000 and $99,999, and 18 percent earned $100,000 or more. For some companies, this may entail reshaping their brand portfolio through innovation, acquisition of new brands, and/or divestiture of traditionally strong brands. Consumer spending will likely shift toward customized products and experiences across a broad range of consumer products. These commodity indices represent the price paid by consumer product companies to farmers for crop commodities. The risk for many packaged goods companies is that they may be slowly proceeding to address two or three of these areas, and their approaches may be incomplete. With more than 3,600 professionals in the Consumer Products practice, Deloitte delivers insights on the latest consumer product issues, effective practices, technology, and operating procedures, serving companies across multiple categories including food and beverage, apparel and footwear, personal care, and household products. Ltd), Jack Ringquist (Deloitte Consulting LLP), Ben Stiller (Deloitte Consulting LLP), Alok Ranjan (Deloitte Support Services India Pvt. Rich resides in Chicago during in his personal time Rich enjoys wine, cooking, reading, travel, and is an enthusiastic fan of Chicago's professional sports teams (Go Cubs Go).Georgia. Our hope is to not only provide you with a guidebook to help you set your course, but also to bring about action on these challenges. Barb works directly with consumer and industrial product clients focusing on their regulatory environment, supply chain, technology and processes, and other issues and opportunities. Also, 50 percent of consumers were willing to pay more for a brand if it communicates its commitment and efforts to improve food safety. Venture capitalists and other investor groups have been increasingly investing in start-ups that focus on new ways of developing food, often seeking to produce healthy food more sustainably and efficiently. ... An acceleration of intelligent mining - Australian Mining, Share on FacebookShare on TwitterShare on Linked InShare by Email. Consequently, attitudes toward packaged foods such as an “increasing desire for real food” and “using food as a way to attain and maintain good health” are highly relevant for the pet food category.26 In March 2014, Nestlé Purina introduced “Just Right by Purina,” a brand that allows US consumers to create a customized blend of dog food online and have it home-delivered.27 To evaluate the nutritional needs of the pet, Nestlé Purina’s website asks consumers to input details such as breed, gender, age, weight, activity level, and coat condition. See something interesting? Anupam Narula. According to Tony Vernon, former CEO of Kraft Foods, “Families in the middle [are] in fear of moving lower. Under this uncertainty, national brands that do not reinvent themselves and reformulate their products along these attributes risk losing brand loyalty. First, an industry that was raising the bar on climate goals now appears poised to vault that bar sooner thanks to a raised floor, as renewables abruptly acquired a higher share of electricity demand. She has spent 25 years serving clients and has extensive global experience, having implemented transformation programs in 17 countries. In this rapidly evolving, low-growth, and margin-compressed environment, clear strategic direction and coordinated efforts are not all that should be pursued. Speed of execution and completeness of action are just as important, if not more important, to consider. First, driving greater brand loyalty is very important to each of the three groups of executives—revealing the ongoing tension between both consumer product brands and retailers. Nestlé S.A.,”Nestlé Purina launches personalised dog food in US,” October 28, 2014, http://www.nestle.com/media/newsandfeatures/purina-personalised-dog-food-us. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the "Deloitte" name in the United States and their respective affiliates. The drive towards social value is no longer limited to environmental activists. View in article Hagen, “Food and product 2020.” Rich has significant experience in guiding clients through strategy-led transformation to achieve profitable growth. Rich Nanda, In an effort to display commitment to the lower-income US shopper,17 Kraft developed products along “good-better-best” price points in many categories to give value-conscious consumers lower-priced access to national brands. Trend 3: Seize opportunity amid uncertainty. Crop commodities in categories such as food (wheat, corn, rice, soybeans), beverages (coffee, cocoa), and cotton have trended upward over the past decade.15 The International Monetary Fund (IMF) Food Commodity Index has risen 44 percent over the past decade, and the IMF Beverage Commodity Index has increased 56 percent. As you look at the many other categories that consumers are in, there are more and more customized features that are being offered every day.”30 The company is currently working to enhance the product’s personalization possibilities (for example, package sizes, flavors) and ordering features (for example, automatic replenishment); it is also testing a similar solution for cat food.31. Speed of execution and completeness of action are just as important, if not more important, to consider. Consumer product companies should consider understanding and targeting lower-income and middle-class consumers’ preferences in what they consider affordable in terms of price point and what they consider desirable in terms of channel. Instacart is a grocery delivery service that provides consumers with a third-party personal shopper that picks up and delivers groceries to them.9 Instacart shoppers pick up groceries at national retailers, as well as at local retailers, in 16 metro areas across the United States. “The ad-hoc and relatively uncoordinated commodity strategies of the past have left us underprepared for the higher uncertainty we face.”—Packaged goods finance executive The fifth uncertainty posits commodity cost increases and higher cost volatility for key food and beverage inputs. The COVID-19 pandemic has accelerated the move that many mining companies are making in the direction of intelligent mining, but this doesn’t mean they have lost their focus on people. Kim is the US Consulting Delivery Transformation Leader, where she is responsible for architecting Consulting’s reimagination of its work, workforce, and workplace to create consistent, efficient, and innovative ways of working that improve client outcomes, enhance the talent experience, and improve earnings. “The 2021 Deloitte Global Human Capital Trends survey showed that the proportion of HR executives who were very confident in HR’s ability to navigate future changes doubled, from one in eight in 2019 to nearly one in four in 2020. Ltd), and Neelakantan Subramanian (Deloitte Support Services India Pvt. The COVID-19 pandemic has accelerated the move that many mining companies are making in the direction of intelligent mining, but this doesn’t mean they have lost their focus on people. Furthermore, consumers and retailers could demand greater variety and customization in both product offerings and purchase channels. DTTL (also referred to as "Deloitte Global") does not provide services to clients. The company has also, through various partnerships on projects aimed at water conservation, distribution, purification, and hygiene, provided access to safe water to more than 3 million people; it is now working to provide safe water access to 6 million people by the end of 2015.35 PepsiCo’s focus is on achieving a “positive water balance” in its operations, especially in water-distressed areas. Challenge to current model: Traditional commodity management strategies are increasingly insufficient to guarantee supply, harness innovation, and align with social responsibility. Deloitte food safety survey, 2014; Deloitte social media study, July 2014, Note: Analysis of social media posts from the United Study on the topics of “food safety” and “health and wellness.”, Deloitte Social Media Study, July 2014, Note: Analysis of social media posts from the United States on the topics of “food safety” and “health and wellness.”. Elisabeth Hagen, senior advisor, Food Safety, Deloitte & Touche LLP, “Food and product 2020,” presented at 2014 GMA Leadership Forum, Colorado Springs, Colorado, August 23, 2014. Deloitte recently released their Tech Trends report for 2020, which gives insight into the newly identified key players and driving forces behind the world’s developing business and digital landscape. Ltd), Michael Jeschke (Deloitte Consulting LLP), Shweta Joshi (Deloitte Support Services India Pvt. The resource in question is water. Digital technology has already permeated the path to purchase, as today’s consumers use websites, social media, and mobile apps not only to research products, compare prices, and make purchases, but also to provide feedback to peers and even companies. He is the research lead and co-author of multiple articles and reports on consumer attitudes and behaviors toward brand loyalty, marketing strategies, and store brands. The downward trend in profitability for both big and small players suggests the need to revisit the relevance of traditional R&D and innovation models. Email a customized link that shows your highlighted text. Constant technological change and increasing reliance on digital can leave people wanting for human connection. Savvy companies are already increasingly tapping into consumers for ideas on new products and product variants. Social login not available on Microsoft Edge browser at this time. Being able to cater to today’s definition of healthy products can potentially help reap rewards in terms of commanding a price premium. Trend 2: Getting partnerships and joint ventures right. Rakesh Kochhar and Rich Morin, “Despite recovery, fewer Americans identify as middle class,” Pew Research Center, January 27, 2014, http://www.pewresearch.org/fact-tank/2014/01/27/despite-recovery-fewer-americans-identify-as-middle-class/. to receive more business insights, analysis, and perspectives from Deloitte Insights, Telecommunications, Media & Entertainment. USA Today, “Purina offering personalized dog food,” November 1, 2014, http://www.usatoday.com/story/money/business/2014/11/01/purina-offering-personalized-dog-food/18317543/. Deloitte recently released “Tech Trends 2020,” the company’s 11th annual evaluation of emerging technology trends. Looking ahead to 2021, we developed seven marketing trends that can help marketers to build connection and drive engagement with their customers. Additionally, recent social media listening research indicated that when consumers talk about food safety in the United States, only 14 percent of the discussion is about basic food safety, while the rest is about a broader set of topics, such as health and wellness.43 Within the health and wellness and food safety discussions, a significant number of posts were about transparency (8 million posts) and sustainability (2 million posts). Several trends that the company highlighted in the report have emerged in reaction to long-term IT challenges, while others address the technological needs of large firms, Deloitte … Deloitte’s 2020 Global Human Capital Trends survey of over 9,000 business and HR executives in 119 countries revealed that leaders are moving boldly to activate the social enterprise—an enterprise whose mission combines revenue growth and profitmaking with the need to respect and support its environment and stakeholder network. What challenges could the consumer product industry be facing five years from now? A number of organizations have already made strides in preparing for and addressing these major changes in the consumer product landscape. However, even these companies should realize that a good compass—that is, setting a clear direction—is necessary but not sufficient. The seven executives interviewed had experience in marketing, sales, operations, and/or information technology at consumer product companies. PepsiCo’s commodity procurement strategy provides an example of how a company can reframe commodity sourcing from a resource procurement decision to a resource preservation decision. Perhaps the slowdown in return on assets is partially because many companies are neither bold enough in their plans, nor fast enough in their actions. Third, understanding consumer preferences was considered more important by consumer product and food and beverage executives than by retailers. 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