Is Your Procurement Strategy Holding You Back? Why CPG Companies in LATAM Need a Rethink on OPEX and CAPEX

Let’s face it: the procurement strategies that worked yesterday might not work today. If you’re in the Consumer Packaged Goods (CPG) sector in Latin America (LATAM), your approach to OPEX and CAPEX could drag your company down. Harsh? Maybe. But it's time to rethink everything from how you source materials to where you invest your capital. Let’s break down the bold moves you must make before your competitors do.

The OPEX Illusion: Are You Cutting Costs?

Stop Focusing on Short-Term Savings Everyone loves a good deal, but are those “savings” worth it if your suppliers are unreliable or deliver subpar materials? In LATAM, where supply chain disruptions are the norm rather than the exception, the race to the bottom in pricing is a fool’s game.

What You Should Be Doing: Build real partnerships with your suppliers. Get beyond the surface-level negotiations and start investing in supplier development. If you’re still squeezing pennies, you’re missing the bigger picture—and potentially losing out on innovation and reliability.

Hot Take: If your procurement team is still patting themselves on the back for shaving a few cents off raw materials, they might be the reason your product quality is suffering. And guess what? Consumers notice.

Strategic Sourcing: The Buzzword That’s Failing You

Are You Truly Strategic—or Just Going Through the Motions? “Strategic sourcing” is a buzzword that gets thrown around a lot. But let’s be honest—most CPG companies in LATAM are just ticking boxes. Local sourcing is important, but are you actually doing it right? Or are you just settling for what’s easy?

What You Should Be Doing: Analyze your entire supply chain and make tough decisions. Just because a supplier is local doesn’t mean they’re the best choice. Sometimes, you have to expand your horizons and make bold moves to get the best quality at the right price.

Hot Take: If you’re not willing to challenge the status quo and push for better suppliers—even if it means shaking things up—then you’re just managing procurement, not driving it.

CAPEX: Big Investments, Bigger Risks—Are You Playing It Too Safe?

Why Playing It Safe Could Be Your Biggest Mistake When it comes to CAPEX, most CPG companies are stuck in the comfort zone. Sure, you’re making safe investments, but is that enough to keep you competitive? In LATAM, the companies that dare to take risks and embrace new technologies are the ones that will dominate the market.

What You Should Be Doing: Stop thinking about CAPEX as a cost and start seeing it as an opportunity for transformation. Investing in Industry 4.0 technologies, like automation and IoT, isn’t just a nice-to-have—it’s a necessity if you want to stay ahead.

Hot Take: If you’re still relying on outdated equipment and infrastructure, you’re already behind. In today’s market, playing it safe is the riskiest move of all.

The Sustainability Myth: Are You Really Walking the Talk?

Greenwashing or Genuine Change? Sustainability is all the rage, but let’s get real—how many CPG companies in LATAM are actually making meaningful strides? Slapping an eco-friendly label on your product doesn’t cut it anymore. Consumers are smarter, and they’re demanding transparency.

What You Should Be Doing: Integrate sustainability into every aspect of your procurement strategy, from sourcing to CAPEX investments. This isn’t just about pleasing consumers—it’s about future-proofing your business.

Hot Take: If your sustainability strategy is just window dressing, you’re not only misleading your customers—you’re setting yourself up for long-term failure. The market is moving towards sustainability, with or without you.

The Technology Trap: Are You Using It or Is It Using You?

Are You Really Leveraging Technology—or Just Drowning in Data? Everyone loves to talk about digital transformation, but how many CPG companies in LATAM are actually leveraging technology effectively? If your procurement team is overwhelmed with data but isn’t making smarter decisions, then all those fancy tools are going to waste.

What You Should Be Doing: Invest in technology that empowers your team to make better decisions, not just collect more data. Tools like SAP Ariba and Coupa can revolutionize your procurement process—if you know how to use them.

Hot Take: If you’re drowning in dashboards but can’t point to any real impact, it’s time to reassess your tech stack. Technology should simplify and enhance, not complicate.

Final Thoughts: Are You Ready to Shake Things Up?

If you’re not willing to disrupt your own procurement strategies, someone else will do it for you—and you might not like the results. The LATAM CPG market is evolving, and the old ways of doing things won’t cut it anymore. It’s time to take risks, rethink everything, and make procurement the driving force behind your company’s success.

Challenge: Are you ready to lead your procurement team into the future, or will you be left playing catch-up? Share your thoughts and let’s ignite a conversation! ??