There's certainly no shortage of client industries facing challenges these days, but perhaps none of those industries are in the same boat as the Consumer Package Goods industry. Due to what could be considered a perfect storm of circumstances, CPG is facing a plethora of problems—well, challenges… and any management consultant worth his or her salt will remind you that challenges are just opportunities in disguise.
For the CPG, the challenges (well, opportunities), are coming fast and furious. As Eric Krell points out in the cover story "The Elephant in the Room," the disruptive forces are huge, and rapidly approaching. Forces such as unexpected consumer attitudes, an upheaval in the closely linked retail industry, channel conflicts, an e-commerce-fueled direct-to-consumer (DTC) shift, product customization and dynamic pricing.
What's more, the innovation the sector has been known for for the last few decades has been lacking. Dan Wald, a Partner at The Boston Consulting Group, says the sector sort of took its eye off the prize because it was forced to focus so much on the supply and cost side. Add it all up and it appears the CPG sector is heading straight for a dramatic shift in the way it conducts itself, specifically in how the sector interacts with its customers.
At the forefront of all this disruption, not surprisingly, is technology; mainly in the form of customer analytics and an e-commerce explosion that's radically changing the rules of engagement for CPG companies. So much, in fact, that many, many CPG companies are knee deep in a risk and benefits analysis of what a direct-to-consumer business model would mean to its bottom line… as well as the very future of the sector.
For consultancies, the challenges truly are the opportunities. CPG companies are scrambling for solutions, and the consulting firms that provide the best ones, effectively and efficiently, will be the ones who will ride out this perfect storm. And live to tell about it.
Joseph Kornik
Publisher & Editor-in-Chief
jkornik@consultingmag.com
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