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VANCOUVER, 13th June 2019 — With a packed agenda, we look at the key messages from the second day of The Consumer Goods Forum Global Summit in Vancouver, Canada. Innovation and the role of new technologies were among the key themes discussed.
With a focus on the future of beauty, L’Oréal’s Chairman & CEO, Jean-Paul Agon, and Alexis Perakis-Valat, President Consumer Products Division, focused in on the opportunity in mass retail. Both speakers highlighted the significant potential in the beauty category, which could double in value over the next ten years. Urbanisation and digital will be two key drivers of this growth. The growth of urban populations globally will drive socialisation, which along with a desire to combat the effects of pollution will drive more consumption in cities. Beauty will also be boosted by digital, with its visual nature a perfect match for platforms including social media and online video, enabling customers to show themselves at their best.
L’Oréal also pointed to the role of the store in showcasing innovation and helping customers to discover new products. Retailers should dial-up their focus on innovative new products.
Innovation is also a focus for Kroger, the world’s second largest grocery retailer. Chairman and CEO, Rodney McMullen, highlighted the challenges of keeping pace with changing customer needs while managing the costs associated with this. Kroger’s ecommerce business has grown rapidly to around $5bn last year and is on-track to be a $9bn business. Partnerships are an important element of how Kroger is innovating for its customers in this area, including working with Ocado, Walgreens and self-driving vehicle company, Nuro.
Nestlé’s CEO, Mark Schneider, switched gears and spoke to the importance of having a purpose as an organisation, beyond delivering financial success. Customers and employees are demanding more of companies and expect them to meet the needs of a broader range of stakeholders. Schneider highlighted the importance of making food systems more resilient against the backdrop of a growing population, without impacting the planet. He remains optimistic about the industry’s ability to achieve this through utilising new technologies and insights, along with the collective scale of major companies such as Nestlé to set the example for others to follow.
In two sessions chaired by Michael Chui, MGI Partner, McKinsey & Company, technology was the focus. In discussion with Thomas Kurian, CEO, Google Cloud, the advantages of cloud-based technology were highlighted. In many cases, this is about taking technologies developed for consumers and repurposing them in the enterprise space, helping companies to get new capabilities faster and easier. The cloud delivers speed, enabling companies to deploy applications to solve problems, process vast amounts of data and use algorithms and find patterns.
Artificial Intelligence (AI) was the focus of a second session where Chui was joined by several leading companies in this space to outline how they are optimising the technology. Daina Burnes, CEO, Bold Metrics uses AI for the human body. Her company’s technology predicts body measurements, which along with purchase and return information can help shoppers select the right sized clothing. Rosebud AI’s CEO, Lisha Li, spoke about image synthesis and how the technology can be used to deliver personalised ads.
Martin Hitch, Chief Business Officer and Co-Founders, Bossa Nova Robotics, showed how it has helped retailers to move from weekly inventory scans of their stores to twice-daily scans. Walmart has been one of the key customers to partner with its autonomous robot, helping to improve accuracy and prioritise daily activities.
Technology was the key topic for Frans Muller, President & CEO, Ahold Delhaize. He showed how technology is driving omnichannel transformation and changing the nature of work. Within the business, partnerships are a key part of this. In looking at who to work with in this area, the business considers companies with experience with data and analytics, emerging technologies and the ability to monetise some of the developments. Muller also highlighted the importance of data transparency and its ethical use. While consumer trust has historically been built on food safety, this will be replaced in the future by “can I trust you on how you handle my data?”
In a passionate presentation, Loblaw’s Executive Chairman, Galen Weston, urged the food and consumer goods industry to tackle the issue of plastics. Noting that large companies have a responsibility to the communities they serve, he stated that the food industry has a history of making a difference. While many sustainability-focused issues can be challenging to solve, he believes that the sector can tackle this specific issue because consumers care about it, governments are showing they are prepared to act and there is an economic incentive to do so. The Consumer Goods Forum has identified this as a priority issue for the industry and companies should look for ways to embrace regulatory change and be part of the process.
The final session of the day focused on challenger brands. Solitaire Townsend, Co-Founder, Futerra, who chaired the session highlighted the demand among Generation Z for companies to demonstrate sincerity and authenticity. Describing them as the “honest generation,” she said they are demanding proof of a company’s purpose. Focusing on the value of independent certification, Paul Rice, Founder and CEO, Fairtrade USA, stated that it can provide an added level of credibility and help brands to tell a story. Hamdi Ulukaya, CEO and Founder, Chobani, stated that sourcing transparency is not enough and that it’s essential to connect to the human truth and implement human qualities into your brand. Closing the day, Seth Goldman, Co-Founder and TeaEO Emeritus, Honest Tea, outlined the only way to be honest is to under-promise what is being delivered and realise that you’re never done.
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