A Perfect Storm in Consumer Packaged Goods: The Consumer Delight Imperative

by Stella Ioannidou, Director, Research??

The Consumer Packaged Goods (CPG) industry is reinventing itself to satisfy continuously changing consumer demands. Digital innovation, the pandemic, and a growing focus on sustainability and health have had a massive impact on this market in recent years. Digitalization has put customers in the driver’s seat and enables endless comparison and scrutinizing of products on the spot. As a result, CPG companies need to adjust their marketing strategies and brand messaging to maintain customer loyalty.?

Meanwhile, the pandemic created huge market disruption and altered how consumers shop. This shift in consumer preferences has forced CPG companies to develop multidimensional operating models involving online, offline, and omnichannel distribution to meet consumer needs. This imperative to put consumers front and center has disrupted the advantage CPG companies once had.?

Traditionally, CPG companies went to market through distributors, retailers, and other channels. Today, as CPG companies shift from “brick and mortar” distribution toward e-commerce, winners in this market can develop precisely what consumers want to buy. Data analysis is now a critical competency for these companies. CPG companies can no longer afford to market their way out of poorly-researched decisions to manufacture products that do not delight consumers.?

However, not all CPG companies are challenged by this fundamental business shift in the same way.??

We just completed a major study in the Consumer Packaged Goods industry, A Perfect Storm in Consumer Packaged Goods: The Consumer Delight Imperative, as part of our expansive Global Workforce Intelligence (GWI) Project and we uncovered a breed of highly transformed CPG companies that are thriving in the market. ?

As part of our Global Workforce Intelligence (GWI) Project methodology, we looked at the top 200 global CPG companies and identified the skills, capabilities, and operating models of the highest performers. Our research is based on millions of data points from the Eightfold Talent Intelligence Platform and The Josh Bersin Company body of knowledge on systemic people practices, coupled with a multitude of interviews with C-level executives in the industry from all around the globe. This study discovered that the core skills, talent strategies, organizational models, culture, and HR models of top-performing organizations are different. We call these companies the “Pacesetters,” and our research shows they continue to pull ahead of their competitors.?

The most significant challenge facing the CPG industry is keeping pace with evolving consumer preferences and behaviors and remaining relevant in an increasingly crowded and competitive market. CPG companies must quickly adapt and ensure they have the right talent to tackle the industry’s diverse challenges.??

From manufacturing automation to predictive analytics and the distribution of personalized products, the road to market success calls for a nuanced approach to develop the skills and capabilities required.?

So, how talent-ready are CPG companies to take on this challenge? To address this concern, we analyzed millions of data points around job roles, skills, and trends over time to uncover that most CPG companies lack the talent required to design the right products for their consumers. More than 90% of the top 15 skills in all talent clusters within CPG are either stable or declining. Meanwhile, CPG startups have a distinct advantage in digital and R&D skills, with a focus on data analysis, food science, product development, and biotechnology. The underlying reason for low maturity levels is not a lack of interest in these emerging trends. Instead, it is more closely tied to a notable talent gap: most CPG companies are missing the key skills needed to respond to the industry’s biggest future enablers.?

But Pacesetter CPG companies are different. Pacesetter CPG organizations lead the way in technology, e-commerce, and critical manufacturing roles and focus on innovation. Our analysis shows that Pacesetter companies have 30 times more people in research roles indicating they highly prioritize the entire R&D lifecycle. On top of that, it comes as no surprise that, when compared to the rest of the industry, Pacesetter CPG companies have significantly more people in technology and transformation roles. Moreover, Pacesetter CPG companies have largely automated their manufacturing processes. They extensively rely on robotics and AI for predictive maintenance, and therefore require significantly fewer technicians and maintenance engineers. In terms of skills, Pacesetter CPG companies have a significantly higher prevalence of advanced skills in technology, transformation, and consumer delight. These skills are critical for managing the end-to-end consumer delight lifecycle, ensuring that companies are streamlining operations to satisfy demand and that they’re creating the next best product for their consumers.??

But technology, marketing, and consumer delight skills are not the only areas that set Pacesetter CPG companies apart. Pacesetter CPG companies lead their segments. They are acclaimed talent leaders and employers of choice because they work diligently to grow as an ecosystem, rather than within internal silos. They adopt systemic people solutions that allow them to strike a fine balance between product and culture. They work on a leadership-development mindset that relies on coaching instead of command and control. They build purpose-driven cultures rather than rigid rules. And they create multidimensional pathways of growth for their workforce.?

In our rich collection of resources created for this GWI Project industry study, you will find:?

• A comprehensive analysis designed for CHROs and CEOs outlining the strategies and the practices that work in Consumer Packaged Goods right now and help Pacesetter companies effectively address the industry's most pressing business and talent-related challenges.?
• In-depth talent mix, role, and skills benchmarking guides that lay out the next step in the consumer-delight transformation journey of CPG companies, and?
• A series of case studies from identified Pacesetter organizations that will help you see how these strategies and practices are implemented.?

Here is a brief video outlining the top findings, key results, and best practices included in the study.?

The New Skills Crisis in Consumer Products Companies?

If you’d like more information about this study, please contact us or download our GWI CPG Infographic. The complete GWI research collection is exclusively available to The Josh Bersin Company Corporate Members. By joining The Josh Bersin Company corporate membership program we will walk you through the findings and you can benchmark your organization against the Pacesetters.