贝恩 -2024全球消费品年度报告 Consumer Products Report 2024 -Resetting the Growth Agenda

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Withnoroomleftforpriceincreases,CPGsmustfundamentallyreshapetheirbusinessestoreigniteprofitable,volume-drivengrowth.

ByRichardWebsterandCharlotteApps

BAiN&CMPANY

BAIN&COMPANY○

1

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Contents

Keycontributors

2

AtaGlance

3

Theconsumerproductssectoratacrossroads

4

Confrontingaharshpricingparadox

4

Awideningdigitalgapandmountingsustainabilitypressure

8

Theimportanceofstakeholderimpact

9

Lookingaheadandthe2024agenda

11

1.Thereturntoprofitable,volume-drivengrowth

12

–Winningovertheconsumer

12

–Winningwiththecustomer

13

–Smartcomplexity

14

2.Theaccelerationofnext-generationcapabilities

15

–Thenewdigitalagenda

15

–Leadingonsustainability

16

–Tomorrow’soperatingmodel

17

Aboldstartto2024

17

2

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Keycontributors

GlobalSectorExperts

RichardWebster

(Global)

GlobalCPPractice

Leader,London

GuyBrusselmans

(EMEA)

Partner,Stockholm

CharlotteApps

(Global)

CPPracticeEVP,

Toronto

AudreyHadida

(EMEA)

Partner,Paris

JorgeRujana

(AMER)

AMERCPPracticeLeader,Dallas

JeroenHegge

(EMEA)

EMEACPPractice

Leader,Amsterdam

NikhilOjha

(APAC)

Partner,NewDelhi

DavidZehner

(APAC)

APACCPPracticeLeader,Sydney

GlobalImperativeLeads

AdamBorchert

(SmartComplexity)Partner,Boston

NaderElkhweet

(Customer)

Partner,Milan

SoyoungKwon

(SmartComplexity)Partner,Atlanta

RajeshNarayan

(Digital)

Partner,London

HarryMorrison

(Sustainability)Partner,London

EileenShy

(Consumer)

Partner,NewYork

JoostSpits

(OperatingModel)

Partner,Boston

KyleWeza

(Consumer)

Partner,Amsterdam

NicolasWillemot

(Consumer)

Partner,Brussels

3

ConsumerProductsReport2024:ResettingtheGrowthAgenda

AtaGlance

Afterrisingpricesledtoestimatedglobalsalesgrowthofalmost10%in2023,CPGsurgentlyneedtorevivevolumegrowthinmostmarkets.

Ourresearchshowsthatlong-term,profitablegrowthislinkedtoacompanyhavingapositiveimpactonallstakeholders—notjustshareholders,butalsoconsumers,customers,employees,andtheplanet.

Inadditiontoprioritizingvolume-drivengrowth,executiveteamsshouldseektoacceleratetheacquisitionofnext-generationcapabilitiesintheir2024strategicagendas.

Theconsumerproductsindustryisusedtofindingawaythroughperiodsofuncertaindemand.Inthelastcoupleofdecadesalone,unflappableexecutiveteamshavesteeredconsumerpackagedgoodscompanies(CPGs)throughtwoofthemostunstableperiodsofmoderntimes:the2007–08globalfinancialcrisisandtheCovid-19pandemic.

TheuncertaintyCPGsfacein2024feelsdifferent,though,chieflybecauseexecutiveteamshavefewerleverstopullinresponsetofalteringconsumerconfidencethantheyhadduringpast

inflectionpointsfortheindustry.

Priceincreasesimplementedin2023inresponsetodramaticcostinflationarejustoneconstraint.Theroomformaneuveringisalsobeinglimitedbytightlabormarkets,highcapacityutilization,

andtheendingoftheeraofultra-lowinterestrates.Thesuccessofpastefficiencydrivesmeans

therearefewercost-savingopportunities,too;overheadcostsaremeaningfullylowerthanin2008.

SuchisthesettingforBain&Company’sfirstannualConsumerProductsReport,whichwehopewillassisttheindustryinformulatinganewplaybookforthemonthsahead.Wesurveyedmorethan120seniorconsumerproductsexecutivesaroundtheworldontheirexperiencein2023andtheirstrategicprioritiesthisyear.

It’sclearthatrestoringprofitable,volume-ledgrowthisnowthemission.Butquestionsabound.

Isareturntovolumegrowthindevelopedmarketspossible,orwillemergingmarketsbecomethecriticalbattleground?Howwillthegrowthimperativeshapethenextfrontierofdigitalcapabilities?What’sthebestwaytomakerealprogressagainstsustainabilitygoalsandtherebycreateanew

platformforlong-termgrowth?

Inthisreport,wefirstexaminehow2023haslefttheindustryatacrossroads,thenexploretheconnectionbetweenprofitablegrowthandpositivestakeholderimpact.WeconcludebylookingaheadtothemostpressingissuesthatwillshapeCPGs’strategicagendasin2024andbeyond.

4

Theconsumerproductssector

atacrossroads

Confrontingaharshpricingparadox

Theconsumerproductssectorhasenjoyedanotheryearoftremendousgrowth,buttherearetellingsignsthatCPGsneedtorewritetheirgrowthplaybooks.Weestimatethatretailsalesvalue(RSV)fortheindustrygloballyrosebycloseto10%yearoveryearin2023(seeFigure1).Thatsurgefollowsasimilarrisein2022andisnearlydoublethe10-yearaveragegrowthrate.Yetthree-quartersof2023’sgrowthislikelytohavecomefrompriceincreasesratherthanvolumegains,asCPGspassedon

risinginputcoststoconsumers.IntheUSandEurope,priceincreasesaccountedfor95%ofRSVgrowth.Thatimbalanceisn’tsustainable.

Priceincreasesimplementedin2023inresponsetodramaticcostinflationarejustoneconstraint.Theroomformaneuveringisalsobeinglimitedbytightlabormarkets,highcapacity

utilization,andtheendingoftheeraofultra-lowinterestrates.

BAIN&COMPANY○

5

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Figure1:Salesgrowthwasprimarilydrivenbypricein2023

CPsectorretailsalesvaluegrowth,2022–23E

(Compoundannualgrowthrate,2022–23E)

Price-drivengrowth

Volume-driven

growth

$610B

Global

(9.5%)

$165B

Europe

(9.2%)

$9B

China

(1.0%)

$120B

LatinAmerica

(16.6%)

$25B

India

(14.7%)

$90B

US

(6.9%)

Sources:Euromonitor;Bainanalysis

Emergingmarketsaccountedforthevastmajorityofglobalvolumegains(seeFigure2).India

wasastandoutexampleofbalancedgrowth,withRSVadvancingbynearly15%since2022,

aidedbyconsumersswitchingfromlocalorunbrandedproductstobigger,internationalbrands.VolumeandpricingwerebothunderpressureinChina,amidlowconsumerconfidence.

Ourexecutivesurveyunderlinedjusthowmuchrisinginputcostscontributedtothewidespreaddecouplingofpriceandvolumegrowth:82%ofrespondentssaidinflationhadhadamajorimpactontheirbusinessinthepreviousyear,whichmadeitthebiggestissueofallforexecutiveteams

(seeFigure3).

BAIN&COMPANY○

6

15%

10

5

0

–5

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Figure2:Emergingmarketsaccountedformostvolumegrowthin2023

Changeinvolume(2021–23E)

Mature

Emerging

China

Australia

South

Korea

SpainItaly

Globalaverage

Indonesia

Mexico

India

●Germany

MiddleEastandAfrica

Brazil

Poland

Globalaverage

Japan

France

UK

US

40%

0102030

Changeinretailsalesvalue(2021–23E)

Note:Volumechangebasedonweightedaverageofcategoryvolumechanges

Sources:Euromonitor;Bainanalysis

Figure3:Rawmaterialscostinflationtoppedthelistofindustryconcernsin2023

Shareofsurveyrespondentsselectingasoneoftopthreetrendsaffecting2023performance

82%

54%

48%

47%

30%

Rawmaterials

costinflation

Decreasedconsumer

spendingonfast-moving

consumergoods

Postpandemic

behavioralshifts

Increasedpressure

fromretailers

Supplychain

disruptions

Source:BainConsumerProductsAnnualReportExecutiveSurvey,November2023(n=122)

BAIN&COMPANY○

7

54%

saidthey’dbeensignificantly

affectedbyconsumers

reininginspending

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Butasinflationslows,aparadoxisemerging.Ononehand,priceshaverisentoomuch.

Consumers—askedtopaymorewithoutgettinganyextrabenefitsinreturn—areswitching

tomoreaffordableprivate-labelbrandsortomorepremiuminsurgentbrandsthatoffergreaterconsumervalue.Theyarealsowaitingforpromotionsorjustbuyingless.Slightlymorethanhalftheexecutiveswepolled(54%)saidthey’dbeensignificantlyaffectedbyconsumersreiningin

spendingin2023.

Ontheotherhand,priceshaven’trisenenough.TheleadingCPGsweanalyzedhaveincreased

pricesbymorethan20%onaveragesincethethirdquarterof2021,butthatwasbluntedbysimilargrowthinthecostofgoodssold.FortopCPGs,theaverageEBITmarginremainsneara10-year

low(12.2%inthethirdquarterof2023vs.ahighof13%in2020).Itcertainlydoesn’thelpthat

retailershavebeenlookingtosharetheirownmarginpainwithCPGs.Almosthalftheconsumerproductsexecutivesrespondingtooursurveysaidincreasedretailerpressuresignificantlyhit

their2023performance.

Toeasethepressure,halfoftopCPGsreducedheadcountsignificantlylastyearorfrozehiring,followingongoingSG&Acost-reductionmeasures.Butthereareonlysomanycostleversthatcanbepulled;withnoroomleftonprice,areturntovolumegrowthwillbecritical.

FormanyCPGs,partoftheanswerwillinvolveflexingtheirmusclesinemergingmarkets,which

offerthegreatestroomforvolumegrowth(butwhichoftendemanddifferentcapabilities,too).

CPGswillalsoneedtoidentifycriticalplacesinwhichtheycanbecomesimplerandcopewith

theadditionalcomplexitythat’sonthehorizon.Forinstance,consumersarebecomingmore

sophisticatedandlessuniform.Furthermore,retailcontinuestofragment,geopoliticaluncertaintywilldemandfreshsupplychaininvestment,andcategorydisruptionswon’tbelimitedtoOzempic.

82%

ofrespondentssaidinflation

hadamajorimpacton

business

BAIN&COMPANY○

8

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Againstthischallengingbackdrop,futuregrowthwillrequireafundamentalreshapingofvalue

propositions,portfolios,andbusinessmodels.ThebiggestCPGswillalreadyhaveaparticularlyacutesensethattheyareatthiscrossroads.Whileweexpectthatthesectoroverallgrewabout10%in2023,largerCPGsareonlyexpectedtohavegrown4%,inareversalofseveralyearsofoutperformance.

There’snotimetolose.

Awideningdigitalgapandmountingsustainabilitypressure

Whileprice/volumetensionwasthebiggestthemeof2023,therewerealsoclearsignsoftherising

importanceofnext-generationcapabilitiesindigitalandsustainability,whichwillbecrucialtoCPGs’attemptstodifferentiatethemselvesandgeneratefuturegrowth.

Digitalizationofbusinessprocesses—includingnewcapabilitiesaswellasbasicprocesses—has

becomemoreurgent,asperformancegapswidenbetweenCPGsthatmadeearly,focusedinvestmentsandthosethatdidnot.OuranalysisfoundthatCPGstendtorewardinvestorsmorerichlyiftheyalsohaveahighlevelofdigitalfocus(e.g.,anemphasisondigitalinthestrategicagenda,thepresenceofadigitalleaderontheexecutiveteamandboard,andagreaterwillingnesstomakeinvestmentintechapriority).Between2018and2022,thetotalshareholderreturnoftheCPGsthatrankedinthetop

quartilefordigitalfocuswasabout15percentagepointshigherthanthatofthebottomquartile.

Digitalleaderswillhaveanadvantageinkeyareasoverthecomingyears.TheywillbebestplacedtocapitalizeonvastpoolsofdataandmaturinggenerativeAItechnologiestodevelopbothconsumer-facingusecasesthataddrevenueandinternalapplicationsthatgeneratecostefficiencies.Thegainsarelikelytobesignificant.Forinstance,asmuchas40%oflabortimecouldbeautomatedincertainfunctionsthroughmeasuressuchasAI-generationofadcopyvariationswithminimalprompting.Andwhileleadersaremovingtobuilddifferentiatedcapabilities,mostCPGswillstillneedtofocussignificantresourcesonthemigrationtothelatestERPsoftware.

It’shardertoquantifythegapbetweenleadersandlaggardsinsustainability.Butthepressureto

makeprogresswillonlyincrease.Halfofglobalconsumersnowsaysustainabilityisoneoftheirtopfourconsiderationswhenshoppingandthatthey’dbewillingtopayabout10%moreforsustainableproducts(seetheBainreportTheVisionaryCEO’sGuidetoSustainability).Retailersarelooking

forsuppliersthatcanhelpthemreducetheirowndirectandindirectemissions.Climate-related

disclosure,meanwhile,ismovingtoamoreregulatedandmandatorybasisinmanycountries,

exposingcompaniestomoreintensescrutiny(seetheBainBrief“MereComplianceWon’tBeEnoughasNewClimateDisclosureRulesHit”).

Despitethisbroadmomentum,onlyaboutathirdofCPGsareontracktomeettheirScope1–3

decarbonizationcommitments.Oursurvey,meanwhile,showedonlymutedurgencyon

environmental,social,andgovernance(ESG)issues.Whilenearlytwo-thirdsofexecutiveswhocitedESGasapriorityarefocusedonexecutingonexistingcommitments,only20%ofrespondentssaidESGwasapriorityin2024,and,moreworryingly,onlyabout10%felttheywerelaggingCPGpeersintermsofhavingapositiveimpactontheplanet.

9

Theimportance

ofstakeholderimpact

Resettingthegrowthagendaisundeniablythetoppriorityforconsumerproductsthisyear.Butthatshort-termimperativestillmustleadtolonger-termsustainedgrowth.Abalancedapproachtoservingallstakeholdersisapowerfulwayofachievingthosetwingoals.

Ourlatestresearchshowsthatmeetingtheneedsoffourkeystakeholdergroups—consumers,customers,employees,andtheplanet—doesn’tdistracttopCPGsfromthevitaltaskofcreatingeconomicvalueforinvestors.Onthecontrary,suchbreadthactivelysupportsprofitablegrowth.

Thatfindingcomesfromananalysisofthetop100publiclylistedCPGsglobally(byrevenue).

Wemappedeconomicimpactoverthepastfiveyears(basedonacompany’sabilitytogenerate

profitabovethecostofcapital)againststakeholderimpact(basedonmetricssuchasshareof

consumerspending,employeeengagement,andenvironmentalimpact).ItturnedoutthatthosescoringinthetopquartileonstakeholderimpactaretwiceaslikelyasotherCPGstoalsobeinthetopquartileforeconomicimpact.

Overall,CPGscanbedividedintofourcategoriesbasedontheirabilitytosucceedonbothfronts:

impactleaders,profitchasers,stakeholderstewards,andlaggards(seeFigure4).Thecategory

aCPGfallsintocanhelptodetermineitslonger-termstrategicagenda.Forinstance,impactleadersneedtomovefromoutperformancetouniquedifferentiation,ratherthanstandingstillasthe

regulatoryandcompetitivelandscapeshifts.Profitchasersandstakeholderstewardsmustfindamorebalancedapproachthatsucceedsacrossbothdimensions.Laggardsmustfundamentallyreevaluatetheirstrategyandimpact-creationplan.

BAIN&COMPANY○

10

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Figure4:LeadingCPGscreatebotheconomicimpactandstakeholderimpact

Economicimpact

Outperformers:

Top

Average

Bottom

10CPGsaretopquartileonbothmeasures

Profitchasers

Impactleaders

Laggards

.Stakeholderstewards

LesserimpactAverageimpactGreaterimpact

Stakeholderimpact

(onconsumers,customers,employees,andtheplanet)

Notes:Economicimpactscorebasedonfive-yeareconomicvalue-addedmargin(EVA/revenue)andimprovementinEVAmargin;stakeholderimpactscorebased

onrelevantmetricssuchasgrowthinrevenue,marketshare,andrateofsales,employeeengagement,andenvironmentalimpactSource:BainStakeholderImpactAssessment(top100CPGs;98plottedarethosewithavailabledata)

FormostCPGs,winningforallstakeholdersinawaythatdriveslong-termeconomicvaluewill

requireafulltransformation—acompletereshapingoftheportfolioandthecapabilitiesand

organizationthatsupportit.Whilethisisn’tsimple,itcanbedone.Withintheimpactleadergroup,forinstance,there’sasmallerbandofoutperformers—1in10ofourbroadersample—thatare

producingtop-quartileperformanceforbotheconomicvaluecreationandstakeholderimpact.We’llshowcasesimilarsuccessstoriesthroughout2024inourconsumerproductsCEOSpotlightinterviewseries,whichfeaturedProcter&Gamble’sJonMoellerinitsdebutinstallment.

Wemappedeconomicimpactoverthepastfiveyears(basedonacompany’sabilitytogenerateprofitabovethecostof

capital)againststakeholderimpact(basedonmetricssuchasshareofconsumerspending,employeeengagement,andenvironmentalimpact).

11

Lookingaheadand

the2024agenda

Whenweaskedconsumerproductsexecutivestorankpriorityareasfor2024,threestoodout:consumers,operatingmodel,andcustomers(seeFigure5).DigitalandESGshouldalsobecorepartsoftheexecutiveagendaforthecomingmonths.Asshould“smartcomplexity,”aphraseweusetodescribestrikingtherightbalancebetweenagilityandscale,sothatacompany

maximizesthebenefitsofstreamliningwithoutsacrificingresilienceorresponsiveness.

Figure5:Strategicprioritiesfor2024includeconsumers,operatingmodel,andcustomers

Shareofsurveyrespondentsselectingasoneoftopthreeprioritiesfor2024

89%

64%

64%

35%

29%

20%

ConsumersOperatingmodelCustomersDigitalSmartcomplexityESG

Volume-drivengrowthfocusNext-generationcapabilityfocus

Source:BainConsumerProductsAnnualReportExecutiveSurvey,November2023(n=122)

BAIN&COMPANY○

12

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Thesesixprioritiesfitintotwooverarchingstrategicimperativesfor2024:

1.Thereturntoprofitable,volume-drivengrowth

•Winningovertheconsumer

•Winningwiththecustomer

•Smartcomplexity

2.Theaccelerationofnext-generationcapabilities

•Thenewdigitalagenda

•Leadingonsustainability

•Tomorrow’soperatingmodel

WeaskedthepartnerswholeadBain’sconsumerproductsworkinthesesixareastodefinethelong-termobjectiveand2024priorityactionsforeach.

Winningovertheconsumer

KyleWeza

GlobalCo-Lead–BainBrandAccelerator

Bain&Company

Inthelongterm,whatshouldCPGsstrivetoachieveinthisarea?

“ThefuturewillbelongtotheCPGsthatgatherthedeepestinsightsintotheneedsoftheir

consumers,thenusethoseinsightstodecidewheretoplay—notjustgeographicallybutalsointermsofchannels,categories,andofferings.Leadingbrandswillinjectthatconsumerknowledgeintoeverythingtheydo,frombuildingmemorabilitytodevelopinginnovativepropositionsto

maximizingavailability.

“Tomorrow’swinnerswillvaryhowtheygeneratedemandacrosstheirportfolios,withmass

activationfortheirbiggestbrandsandmoretargetedtreatmentfornicheandinsurgentbrands.They’llalsoincreasetheirlocalscaleadvantagesatthesametimeastheystreamlinetheir

business.Thatwon’tbeeasy,butitwillgeneratesuperiorcashflowtoinvestinfurtherfuture-proofingcapabilities.”

13

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Togetthere,whatmusttheyfocusonin2024?

“Exploitinguntappedsourcesofnear-termvolumegrowthwillbecrucialin2024.Thatmeans

defininganinnovationandgrowthagendathatprioritizesthefastest-growingandmostprofitableconsumergroups,channels,andmarkets.Opportunitiesabound,particularlyinemergingmarkets,butwillrequirethoughtful,data-drivenchoices.

“Buildingarepeatableandscalablecommercialmodelthatoptimizesandstrengthensalignmentacrossmarketing,assortment,anddistributionprioritieswillbecritical.Inourexperience,suchamovetypicallyincreasesrevenuegrowthby3to5percentagepoints,whileimprovinggross

marginby200to300basispoints.Buildingarobustinsightsenginethatdrawsonrichdatasetswillbeacriticalfoundationforthatcommercialmodel.”

Winningwiththecustomer

NaderElkhweet

GlobalLead–B2BCommercialExcellenceinCP

Bain&Company

Inthelongterm,whatshouldCPGsstrivetoachieveinthisarea?

“Emergingmarketsarekeytotherenewalofvolumegrowth,soCPGsmuststayaheadoftheirrapidevolution.Theycan’tgetsidelinedbyeB2Bmarketplacesthatincreasinglyactasvalue-added

wholesalerstosmallerretailers.Tomorrow’swinnerswillinsteadtakeaproactiveroleintheconsolidationofthisstill-fragmented,digitalroutetomarket.

“Inmaturemarkets,successwillhingeonhowwellCPGscanhelpretailerscapturetheconsumer’sattention,throughbetterproducts,pricepoints,in-storebrandactivation—bettereverything,

infact.Globally,newcapabilitieswillbeessentialtomeetcustomerneeds,especiallyindataanddigital.Forinstance,retailersarepushingtobettermonetizethevisibilityofbrandsandattractCPGmarketinginvestment,blurringsalesandmarketingforCPGs.”

Togetthere,whatmusttheyfocusonin2024?

“Inmaturemarkets,it’stimetomeasuretheimpactoftradeinvestmentsmoreprecisely,then

reallocatespendingtothemostprofitablechannelsandcustomers.GiventhatasignificantshareofpromotionsdestroyvalueforCPGs,thatcouldbeatrulyradicalstep.Inemergingmarketsthatareseeingdigitalplatformgrowth,CPGsneedastrategicplantocapitalize.Dependingontheir

startingpoint,thatcouldmeanbuildingtheirownplatformorjoiningsomeoneelse’s.Bothwouldrequiredigitalcommercialexcellencecapabilities.”

14

BAIN&COMPANY○

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Smartcomplexity

SoyoungKwon

LeaderforSimplificationinCP

Bain&Company

Inthelongterm,whatshouldCPGsstrivetoachieveinthisarea?

“Morethanthree-quartersoftheexecutiveswesurveyedaresettorationalizetheirSKUs,brands,ormarketportfolio.Thatmakesalotofsensegiventhecostofcomplexity,butexecutiveteams

mustalsofullyunderstandthebenefitscomplexitycanbring.Thatmeansknowingwhereitsupportsprofitablegrowth—byboostinginnovation,flexibility,andresilience,forinstance,ormeetingdemandforsustainableproducts.

“Theaimissmartcomplexity.Executiveteamsmustrespondnimblytofragmentedandfluctuatingconsumerneeds,buttheymustalsomaintainscaleadvantagestolimitcostsandimprovemargins.Toachieveboth,complexityreductionmustbeacorebusinessprocess,notaone-timeexercise.

A360-degreeviewofsales,marketing,andsupplychainimplicationswillbecrucial,too.”

Togetthere,whatmusttheyfocusonin2024?

“Nearterm,CPGswillneedtosimplifytogrow,andincreasingproductivitywillbeatthetop

oftheagenda.Thesmartestsimplifierswilltakea‘consumerbackandsupplyforward’approach

thatpinpointsproductattributesthatarecriticaltotheconsumer,mapsthemagainstsupplychainchallenges,andthenoptimizestobalancebothneeds.Theywillalsotakeaclean-sheetapproachtotheportfolio,usingcross-functionalteamstoidentifyandcut‘bad’complexity,onlyadding

backpivotalSKUs.”

Morethanthree-quartersoftheexecutiveswesurveyedaresettorationalizetheirSKUs,brands,ormarketportfolio.Thatmakesalotofsensegiventhecostofcomplexity,butexecutiveteamsmustalsofullyunderstandthebenefitscomplexitycanbring.

15

BAIN&COMPANY○

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Thenewdigitalagenda

RajeshNarayan

GlobalLead–EnterpriseTechnologyinCP

Bain&Company

Inthelongterm,whatshouldCPGsstrivetoachieveinthisarea?

“Overthenext5to10years,increasinglyhyperconnectedCPGswillgeneratefaster,betterresultsforabroadrangeofstakeholders.Aproliferationofdigitaltouchpointswillcreateamoreintimateunderstandingofconsumersandtheirneeds,whichwillinturnfostersuperiorinnovation.

“PredictiveAIplanningandsupplychaintraceabilitywillconnectcompaniesmoreseamlesslytocustomers,bringingbenefitssuchasfewerout-of-stocks.Executiveteamswillalsousedigitaltoolstobreakdowninternalsilosandfusetechwithtalent.”

Togetthere,whatmusttheyfocusonin2024?

“Forthosethathavegottenthebasicsright,2024willbeanopportunitytoradicallysimplifytheirdigitalagendaandfocusonrapidlyscalinguptwotothreeoftheirhighest-valuedigitalusecases.Investingindatastrategyisanotherpriority.Aswellasstrengtheningconsumerinsights,sucha

moveshouldimprovebusinessdecisionsineverythingfromtradespendallocationstomaximizingadvertisingreturnoninvestment.SomecompanieswillstillneedtomigratetoS/4HANAsoftwareasamatterofurgency.Gettingtherighttechtalentandimprovingthedigitalskillsofthebroaderorganizationwillbevitalforall.”

Forthosethathavegottenthebasicsright,2024willbean

opportunitytoradicallysimplifytheirdigitalagendaandfocusonrapidlyscalinguptwotothreeoftheirhighest-valuedigitalusecases.Investingindatastrategyisanotherpriority.

BAIN&COMPANY○

16

ConsumerProductsReport2024:ResettingtheGrowthAgenda

Leadingonsustainability

HarryMorrison

GlobalLead–ESGinCP

Bain&Company

Inthelongterm,whatshouldCPGsstrivetoachieveinthisarea?

“Fromnetzerotowasteelimination,tomorrow’sleaderswillbeproactiveinachievinganarray ofsustainabilityobjectives,ratherthanwaitingforotherstofindasolution.They’llalsocontinuetomeetconsumerexpectationsinareassuchasprice,quality,andfunction.ThedifficultyofthisbalancingactmeansCPGscangainarealcompetitiveadvantagebygettingsustainabilityright.

That’llinvolvereshapingportfoliosandvaluechains,particularlythroughinnovationinregenerativeagricultureandrenewablematerials.

“Whileupfrontcostscanbebig,theCPGsthatgetthisrightwilltakealonger-termview.They’llrecognizethatstimulatingconsumeradoptionofsustainableoptionstodaywillresultinscalebenefitsthatwillmakethosealternativescheapertoproduceovertimeandcreatedefensible

brandadvantage.”

Togetthere,whatmusttheyfocusonin2024?

“FormanyCPGs,thegapbetweensustainabilityambitionanddeliveryremainedstu