Consumer goods leaders set their sights on renewed growth in 2024

The winds of change are blowing through the boardrooms of consumer packaged goods (CPG) giants. Industry leaders shared their vision for supporting continued growth during the recent Consumer Analyst Group of New York (CAGNY) conference in Boca Raton, Florida.

CPG executives echoed the sentiment that 2024 is a year of return to growth for the consumer goods sector. They articulated a vision centered on pursuing emerging markets, enhancing supply chain efficiency, harnessing data analytics and artificial intelligence (AI), and fortifying sustainability initiatives.

Growth for CPG companies hinges on attracting a new generation of consumers in fast-expanding markets such as India, Africa, and South America. These regions offer growth potential for companies with innovative go-to-market strategies, such as premiumization for increased gross margin and cost-effective distribution models.

But the path to success will require more than established brand recognition. CPG executives acknowledged the need for diverse leadership teams and workforces that reflect the demographics and mindset of their target markets.

Global expansion also means heavy investment in supply chain capacity, grassroots marketing campaigns, and patience to see the returns. The message from executives at the CAGNY conference was that many companies are willing to secure a foothold now, even at a slim margin, to reap the rewards later as these emerging markets mature. This has led to a paradigm shift in CPG strategies, with some companies prioritizing volume growth and market share over immediate profitability.

Many of the CPG leaders said their companies were looking to digitization to streamline operations. In particular, companies are embracing generative AI and data analytics for supply chain transparency and traceability and to improve demand forecasting and inventory management.

Improving supply chain visibility end to end will provide CPG companies with a better understanding of their operations. End-to-end data can also help identify bottlenecks and inefficiencies, leading to a more holistic approach across the entire supply chain ecosystem. This helps companies identify distribution inefficiencies, enabling them to more effectively meet operational needs and consumer demands.

Improving supply chains isn’t the only reason CPG companies want to harness the power of big data. The ability to aggregate and analyze real-time operational data was mentioned at the CAGNY conference as a key growth enabler for everything from product innovation and cost-cutting to targeted marketing and hiring the right talent.

Data-driven decision-making can help CPG companies streamline product development and reduce inefficiencies – from R&D to production to delivery. Better business insights can also help improve cash flow by driving down costs. The windfall can be reinvested in everything from product marketing to improved distribution.

Better analytics also enable consumer goods companies to improve customer experiences by aligning with buyer journeys. Sophisticated data analytics tools can empower companies to develop and implement strategies based on real-time consumer insights, preferences, and buying behaviors. Gen AI, too, is helping companies gain a keener understanding of the marketplace through social listening by enabling CPG companies to gather insights from user-generated content and conversations. This helps them predict upcoming trends and tailor products, services, and marketing efforts accordingly. The companies that respond the fastest to trends with new products will win market share. And an even bigger opportunity awaits in global markets that have nimbler supply chains, accelerating speed to market for products that often sell out quickly.

Environmental, social, and governance (ESG) initiatives were also front and center during the CAGNY conference. Every company outlined plans for bolstering their sustainability bona fides. Company executives echoed the sentiment that investing in sustainable business practices is crucial for long-term brand strength as more consumers invest in companies with strong sustainability programs.

CPG companies are taking a proactive approach to ESG that spans their entire value chain. Their programs aim to reduce emissions, improve water efficiency, replenish watersheds, and use more recyclable and renewable packaging.

The race is on to capture the hearts, minds, and wallets of the next generation of consumers and expand market share. Optimized supply chains, AI-powered data analytics, and the ability to resonate with buyers in diverse markets will play a defining role in sustaining growth in the CPG industry for decades to come.