KYOTO, 5th June: The Consumer Goods Forum (CGF) has today published a report developed with EY bringing together opinions from 17 consumer industry leaders, to understand how they are working together to ensure resilient businesses and accelerate sustainability action amid multiple crises.
- The Consumer Goods Forum (CGF) launches report gathering insights from CEOs of leading companies, to highlight urgent challenges they and the whole industry face – and how to overcome them together.
- The report, developed with EY, is launched on the eve of The Consumer Goods Forum’s (CGF’s) Global Summit in Kyoto, where CEOs from companies including Ajinomoto, Alibaba, Ahold Delhaize, The Coca-Cola Company, Microsoft Japan, Mondelēz International and PepsiCo, as well as Japanese government officials, will gather to accelerate action on urgent challenges.
- The CGF is the only CEO-led organisation that brings together both manufacturers and retailers globally. It unites CEOs from more than 400 members across 70 countries, providing a vital forum for driving positive change in the sector.
Launched ahead of the CGF’s Global Summit in Kyoto (6-8 June), leaders from some of the world’s most influential manufacturers and retailers identified staying connected to consumers, new digital platforms, securing talent and maintaining sustainability goals as major long-term challenges they face.
The report, ‘Pursuit of harmony, working together in times of turmoil’, underlines the stark reality for an industry which has weathered the storm of ongoing global crises such as the global pandemic, supply chain disruption, geopolitical conflict, increased energy prices, and the effects of the climate emergency.
Insights from CEOs across leading companies including Ahold Delhaize, Ajinomoto, The Coca‑Cola Company, Grupo Éxito, Kellogg Company, L’Oréal and Mondelēz International, revealed three overriding calls to action for companies across the industry:
- Recognise that you cannot do everything all at once: Successive crises have had a compounding effect on business operations. Many CEOs interviewed shone a light on the difficulties of trying to simultaneously address multiple issues – summarising that challenges must be prioritised to ensure that progress can be made, without suffering the paralysis of trying to deal with everything. Many CEOs make large challenges manageable by creating distinct and relatively autonomous workstreams, to sharpen organisational focus.
- Focus on building resilience: Consumer companies demonstrated their resilience during the pandemic. These transformative changes were born of necessity but laid a strong foundation to address new challenges. Leaders interviewed for the report emphasised the importance of resilience to navigate disruption and achieve long-term goals over the tactical actions taken in response to disruption.
- Share for success: Business challenges of today require more cooperation than ever. Clear lines must be drawn to protect companies’ competitive edge, but open and reciprocal sharing within an extended network of coalitions and partnerships brings benefits to all.
Wai-Chan Chan, Managing Director of The Consumer Goods Forum, said:
“Weathering short-term challenges cannot distract leaders from delivering long-term value to their companies and to people and the planet. As the group of CEOs set out in this report, success depends not only on how leaders work in their companies but also how they work with others across the industry.
No organisation can overcome the many challenges they face today alone. Systemic solutions can only be created through collective action and this ethos is core to how the CGF operates. In this spirit of collaboration, the next few days at our Global Summit in Kyoto will provide a unique forum for business leaders to come together to discuss how we can accelerate collective impact on pressing social, environmental and business issues.”
Two themes that were a prominent feature of CEO concerns within the report were supply chain security and cost. Companies are trying to drive down costs while ensuring their products can be sourced, made, distributed, and sold in the most responsible and sustainable way.
There is no “one size fits all” approach to fix the array of supply chain challenges – so a nuanced strategy is needed. This includes using digital tools for measurement, tracking and improvement while also leveraging procurement and innovation to use substitute materials or diversified supplier networks. On rising prices, leaders’ immediate actions have focused on taking cost out wherever possible, increasing operational efficiency, and rebalancing portfolios to lower priced alternatives.
Those interviewed also reported that despite operating in a heavily competitive environment where assets that provide a competitive edge tend to be closely guarded, many were keen to share challenges and collaborate – particularly to remain focused on sustainability ambitions.
Kristina Rogers, EY Global Consumer Leader, said:
“With so much constant disruption, consumer companies are caught in the middle, trying to balance changing consumer preferences with supply chain dislocation, rising costs, and higher debt burdens. There is much companies can do, however, to thrive and not just survive in today’s climate. Volatility and adversity can be engines for innovation, efficiency, and resilience, which improve growth and margin.
“Consumer leaders must be especially attuned to the changing nature of consumer behaviour to address the challenges of retaining loyalty and understanding influencing factors in how and why they purchase. Consumers expect to be heard and companies must bring them into the collaboration process. Given today’s headwinds, collaboration is no longer a strategic option but an essential activity between businesses, governments, organisations, and consumers themselves to optimize outcomes for all.”
The full list of contributors to the report included:
- Steve Cahillane, Chairman and CEO, Kellogg Company
- Taro Fujie. President and CEO, Ajinomoto
- Steffen Greubel, Chairman of the Management Board, METRO AG
- Magnus Groth, President and CEO, Essity AB
- Yoshinori Isozaki, President and CEO, Kirin Holdings
- Jeffrey Lu, CEO and Executive Director, China Mengniu Dairy Company Limited
- Brian McNamara, CEO, Haleon plc
- Carlos Mario Giraldo Moreno, CEO, Group Éxito
- Frans Muller, President and CEO, Koninklijke Ahold Delhaize N.V.
- Malina Ngai, CEO, A.S. Watson (Asia & Europe)
- Alexis Perakis‑Valat, President, Consumer Products Division, L’Oréal S.A.
- James Quincey, Chairman and CEO, The Coca‑Cola Company
- Daniel Rodríguez, CEO, FEMSA
- Nathalie Roos, CEO, LIPTON Teas and Infusions
- Lionel Souque, CEO, REWE Group
- Dirk Van de Put, Chairman and CEO, Mondelēz International, Inc.
- Galen G. Weston, Chairman and President, Loblaw Companies Limited
The report is available to download here.
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To learn more about the full programme of the CGF’s Global Summit, please visit our website.
About The Consumer Goods Forum
The Consumer Goods Forum (“CGF”) is a global, parity-based industry network that is driven by its members to encourage the global adoption of practices and standards that serves the consumer goods industry worldwide. It brings together the CEOs and senior management of some 400 retailers, manufacturers, service providers, and other stakeholders across 70 countries, and it reflects the diversity of the industry in geography, size, product category and format. Its member companies have combined sales of EUR 4.6 trillion and directly employ nearly 10 million people, with a further 90 million related jobs estimated along the value chain. It is governed by its Board of Directors, which comprises more than 55 manufacturer and retailer CEOs. For more information, please visit our website.
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About the report
The EY Global Consumer practice and the CGF conducted interviews with 17 leaders of the CGF’s member companies representing a cross-section of the CGF membership from different regions and subsectors. The interviews explored CEOs’ biggest challenges in the short-, medium- and long-term and provide insights into the strategies that navigate short-term shocks and deliver Long-term goals.
The qualitative interviews formed a foundational set of insights, which were augmented by additional research into the activities of the CGF and its members, other perspectives in the wider market, and proprietary EY research (through programs such as the EY Future Consumer Index). This multi-tiered approach creates a broad perspective on consumer companies’ challenges. It also highlights how the strategies that address these challenges should include collaborative efforts that are enabled by convening organizations such as the CGF.