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Insight

March 18th, 2021 (Updated 03/24/2021) | 6 min. read

Tolu Oke
Content Marketer at Pricefx

How the Consumer Goods Industry Can Learn from 2020 and Prepare for 2021 

While a lot of other sectors had to scramble to meet profit and margin goals last year, some sub-sectors within the consumer-packaged goods industry had other problems to contend with. As we head further into 2021, let’s take a moment to look back at 2020 to see what lessons can be learned from the year and what opportunities and trends await us in 2021. 

We asked Andreas Broutas of TGN and John Kuffel, solution strategist at Pricefx, to enlighten us, and here’s what they had to say: 

In Your Opinion, How Has 2020 Changed the Packaged Goods Industry? 

Andreas Broutas, TGN 

Packaged goods and especially, supermarkets with a physical presence, tried and, in many cases, succeeded in becoming more flexible and customer oriented by creating new procedures to better serve their customers like home delivery, phone orders and improved customer service in their physical stores. 

Another big change was the expansion of their online presence. They have become more competitive by adding many more products to their online catalog, monitoring competitors’ prices and adjusting their pricing frequently. TGN monitors millions of products 24/7 in many sectors and during the lockdowns, there was a significant amount of increase in daily price alterations and in the range of products sold. 

Also, as a result, we saw empty shelves in supermarkets from the first day of every lockdown, thus it was critical to replan and reconstruct or fine tune their supply chain and work closely with the consumer good suppliers. On the other hand, FMCG and CPG brands tried to connect and engage the consumers to pass on the message that we are here to cover your special needs in this situation, and some of them succeeded with that kind of messaging. 

John Kuffel, Pricefx 

The obvious shift was from out-of-home to in-home consumption. Additionally, many consumers started paying more attention to what they buy, e.g. whether it’s locally sourced or sustainable. Without the ability to go out and enjoy, people are spending more money to create a “going out” atmosphere at home, purchasing more high-end food and drink. Not going out has freed up more money for at-home. The reverse side of this coin is that restaurants, bars and cafés have been decimated. 

Anything that has to do with staying at home has enjoyed a boom. DIY markets and just about anything home-grown or done at home has done well so far. The home office shift and the disappearance of the daily commute afford many people more time at home, too. Cookbook sales have exploded, and seemingly everything that contributes to a heathier lifestyle is doing well. 

E-commerce and selling via the Internet are obvious. 

A more subtle shift has been less-conspicuous consumption in many consumer durables. With no office to go to, nowhere to meet and nowhere to go out, status symbols and fashionable items are down considerably. 

The big question is whether these are trends or just one-offs. When Corona has been defeated, will we all swarm to restaurants and bars again? Will we return to prepackaged meals? Wait and see. 

What Are the Implications of That Change Going Into 2021 and Beyond? 

Andreas Broutas, TGN  

All industries, but especially consumer goods, will continue to expand their online presence and create faster and more efficient procedures, and an omnichannel philosophy will be applied. Online customers will go under the microscope of both retailers and suppliers in order to better understand their needs and habits so they will become more loyal to the brand that better covers their needs. 

John Kuffel, Pricefx 

As I wrote already, the big question is whether this was a flash in the pan or a permanent shift. Judging by survey results, it seems that cocooning will accelerate, and that people will continue to spend proportionally more on in-home consumption. 

What Is a Hurdle That Businesses in the CPG Industry Need to Overcome This Year? What Can They Do to Overcome These Hurdles, if at All? 

Andreas Broutas, TGN 

One of the main hurdles was and will always be how fast one adapts to changes. 

As everyone’s lives and daily routines change one way or another, so do their needs and the market. Industries will have to adapt fast and, in some cases, be proactive to catch up with new trends, needs and habits. Like everyone says, data is king, so businesses need to analyze all kinds of data, for customers, loyalty, competition, assortments, pricing and, above all, to understand today’s consumer. 

John Kuffel, Pricefx 

Survival. Businesses – people – must be as innovative as possible to get through the coming months.  

Maintaining brand health. Knowing when to be disciplined has helped quite a few FMCG producers avoid price competition on shelf, so they will be in a good position to grow profitably when Corona finally fades. 

Do You See Any Glimpse of Positive News on the Horizon? How Can Businesses in the FMCG or CPG Industry Prepare to Take Advantage of This?  

Andreas Broutas, TGN  

The pandemic and lockdowns will eventually come to an end sooner or later, but the new normal will remain. We saw and still see rapid changes in the environment we live in, our habits, remote working, etc. 

Digital transformation is the future and e-commerce is changing faster than ever. Companies must prepare and fine tune their structure, operations and strategy for that. 

In this period all industries and organizations, regardless of their presence and size of business, are going through many unknowns while facing issues that require agility and precision. 

This valuable experience will help all organizations to achieve more with less. Markets will increase again soon and everyone must be prepared to gain more happy and loyal customers. 

John Kuffel, Pricefx 

There are more pockets of success than one would initially think, as I wrote above.  

The main thing is to keep an eye on opportunities – change is not always a bad thing! Corona has accelerated many trends that were marching ahead anyway, so this will almost certainly mean that strategic plans need to accelerate just as much. The strategic plan for 2022 or 2023 may be happening right now.  

About the Experts: 

About Andreas Broutas: Andreas has 15 years of retail experience and is an expert in all in-store operations. He has helped several companies achieve successful commercial strategies. 

John Kuffel: John spent 16 years in Pricing, Revenue Growth and key account management at a global wine and spirits producer.