Changing the Rules of Fmcg Industry

Consumer Product Group- FMCG Industry

The growth in the consumer packaged goods industry has been exhilarating in past 25 years. There has been tremendous change in consumer behaviour and that could be attributed to the advent of technology. Technology has totally changed the way consumers think and buy goods. For a marketer past is no guide to the future. In assignment below, I will be looking at some of the current trends in CPG industry and propose some of the gaming changing scenarios with respect to FMCG or CPG industry. The product provided by this industry are touching everyday lives of consumers and giving solutions for a better lifestyle and healthy living.

Below mentioned are the current scenarios or trends prevailing in FMCG industry along with the game changing rules marked with an arrow. The rules define how organizations will have to adapt to these changes and position themselves going forward.

1. Supply chain- The supply chain in FMCG industry constitute of food and non-food products. It is an interrelated collection of processes and resources associated with a number of stakeholders like suppliers, manufacturers, retailers, logistic service providers, warehouses, wholesalers and distributors (FMCG Supply chain, 2014). The current channel of distribution constitutes of multiple layers and there is a certain amount of lead time between requirement generation and delivery of goods to end consumer. But, this is going to change with new technological developments like drone technology.

 The drone technology is going to reshape the way FMCG companies are handing their distribution and retail channel. What we see is that, companies will get in touch with consumers directly through online channels and ship the goods directly through local distributors instead of going through retailers. To illustrate this, let us take a case where the consumer has requirement of packaged noodles pack. Now, what consumers will do today is to go to nearby retailer and buy it. What CPG Company will have to do is make that noodle packet available on a retailer’s shelf through its supply chain network of multiple distributors. With drone technology, we see that once a consumer orders the noodle packet online, distributor will ship that directly through its warehouse using drone technology where the consumer gets the delivery of noodle packet sitting at home. The advantage that consumers and company get here is in terms of value addition. The company is saving huge amount of cost when they ship it directly to consumers because they are saving on the margins that they were supposed to pass on to retailers otherwise. For a consumer cost saving comes in terms of time and effort that he/she will save.

2. Carbon pricing- The key issues that companies across this sector are facing is of long term sustainability. Sustainability not only means for CPG companies, but for the society and the environment.