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06/07/2022

The Mix: Inflation, Innovation and Retail Collaboration

Welcome to The Mix, a CGT newsletter with special industry insight delivered in new ways. As a special gift to our first subscribers, we’re offering a complimentary registration code for Analytics Unite for qualified attendees.

Arrive here via text? We know texting is a new way to receive CGT content. We promise we’re being thoughtful about it. Let us know what you think.
 

Check-In

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geoff freeman

Geoff Freeman, President/CEO, Consumer Brands Association 

We tapped Freeman for his views on the biggest challenge impacting the consumer goods industry — and then threw in a question on the second biggest challenge.

What's your outlook on the impact of inflation in consumer goods?
The CPG industry, like all industries and the consumers it serves, is contending with inflation. The cost of ingredients, materials, and energy — which accounts for about 70% of the industry’s total costs — is up 35% since before the pandemic. Wholesale costs coupled with constant supply chain disruptions and a persistent labor shortage offers little hope that the cost pressures on our companies will ease in the near term. While we may see some of the intensity reduced in the coming months, industry cost pressure will remain well above pre-pandemic norms through the rest of the year and possibly beyond.  

What are CPGs hearing from consumers when it comes raising prices, and how are they responding?
We don’t have those specifics, though we do know from recent polling that consumers blame the pandemic, subsequent policies, and the supply chain for CPG inflation — in short, they understand where pricing pressures are coming from even if they may not know just how intense the cost environment has been for CPG companies.

Related: CPG Checklist: Supply Chain Safeguards

They also may not understand how high demand has been since the start of the pandemic. Consumer demand for CPG products has exceeded March 2020’s shelf-clearing highs for the last eight months, most recently up 5.4% over last year.The focus of CPG companies remains delivering for consumers in a high demand environment. We make essentials and it is our industry’s responsibility and privilege to ensure American families have what they need every day.

What more needs to be done?
Consumer Brands Association urges government leaders to keep their focus on addressing root causes of inflation. We are working with the government to offer input and develop solutions that are, one, in our control (unlike Russia’s actions) and, two require federal leadership. The attention of policymakers is best spent on easing supply chain pressures by creating greater visibility and coordination, increasing trucking capacity, reducing port congestion and incenting more workers to return to the labor force.

Your research shows that nearly 60% of Americans in the workforce want flexibility. How are CPGs delivering on this when not all roles can be done from home?
CPG companies are doing everything they can to attract and retain talent and provide greater flexibility whether for office or manufacturing roles. Specific to facility employees, companies are upending long-held production models and looking seriously at how to take ideas from the gig economy and apply them to the manufacturing world, putting more control in the hands of workers while still ensuring they deliver for consumers.

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Sample Size

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For Your Radar

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Analytics Unite logo

This Analytics Unite Lineup Is Impressive

We're coming back LIVE this year, hosting our Analytics Unite event in Chicago from June 21-23. So we had to bring you the best in tech leadership. Trust us, you'll be impressed. 

Hear from:

  • David Dittmann, VP and chief analytics officer, Procter & Gamble
  • Seemantini Godbole, EVP/CIO, Lowe's
  • James Cummings, VP, global head of analytics and human intelligence, Mars Wrigley
  • Bob Schug, VP, Mondelēz International
  • Jo O'Hazo, Chief Data & Analytics Officer, Giant Eagle

Overheard from the CGT Community: “We need to get out again. We need community sharing to grow and be inspired. None of us can be successful alone. None. Even competitors are more successful in the presence of each other. We all benefit when diverse ideas, processes and solutions are freely and abundantly forthcoming. We’ve been alone for over two years. It’s time to gather ourselves together for all the reasons that matter.”

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Innovation Inspiration

Dyson's 'Secret' Robots

Dyson is developing robots that can complete household chores. The company previewed a video that shows the bots grasping objects to clean up children's toys and (naturally) vacuuming, which it aired during the International Conference on Robotics and Automation (ICRA) as part of a massive recruitment push — the largest engineering drive in the company’s history. Dyson is hiring hundreds of computer vision, machine learning, sensors, and mechatronics experts, and plans to hire 700 more in robotics over the next five years.

Have a product, marketing, or packaging innovation you think we should spotlight? Reach out. 

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From the Feed

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sticky shopper habits

Empowering Sticky Shopper Habits

Eight in 10 retailers (80%) say difficulties attracting and retaining employees is having a negative impact on their businesses, according to The Food Industry Association. While raising wages and improving benefits is a good tactic to attract and retain grocery workers, focusing on technology and automation is helping businesses to reduce the amount of physical labor tasks needed in the first place. These are the tech trends defining the grocery industry and the strategies required to keep pace with market leaders.  
Read more at RIS News.

Wading Into Web3

Like many CPGs, Anheuser-Busch is testing the metaverse waters, including with a campaign that launched 1,936 NFTs in a nod to the year the first Budweiser can debuted. The collection sold out in less than 30 minutes, according to Spencer Gordon, VP of connections and DraftLine at AB InBev, who described the success as the spark needed to get the company on board with Web3. “With this collection, they could see this was a real, tangible thing. We could build a real community and provide ownership and basically take the dollars we’re doing, extend our marketing budgets, interact with people more, and provide more experiences.”
Read more at AdWeek.

 

When Shipping Containers Sink in the Drink (The New Yorker)

How DTC Marketers Are Chasing Customers After Privacy Changes (WSJ)

Thefts, Fraud and Lawsuits at the World’s Biggest NFT Marketplace (The New York Times)

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Subscribers to The Mix are the first to receive each issue, along with special offers for our events and early looks at our research.