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The rapid pace of change necessitates companies to move quickly and completely in a coordinated way. Companies may undergo a major shift in their brand management approaches, their relationships with suppliers and retailers, and their business practices along the entire value chain. Slantshackjerky.com, “Jerky of the Month Club,” http://www.slantshackjerky.com/about, accessed January 15, 2014. The shift toward new, as-yet-unproven digital marketing vehicles—by consumers and companies alike—could heighten the need to discover how to develop a better end-to-end consumer experience. Other last-mile delivery services are also emerging in the grocery and general retail space.10 Of note to consumer product companies is that some retailers have reported incremental sales through the online delivery channel.11 Preparing for this undercurrent is important: Recent research suggests that many packaged goods companies may be less prepared to capitalize on digital commerce than they should be—or than many consumer product executives would like to be.12 In a 2013 study comparing consumers’ and CPG executives’ views on e-commerce, 92 percent of CPG executive respondents agreed with the statement, “The e-commerce channel is a strategic sales channel for CPG companies.” Yet only 43 percent of these same executives thought that their company had a clear, well-understood digital commerce strategy, indicating a substantial gap between e-commerce’s perceived importance and consumer product companies’ readiness to execute. to receive more business insights, analysis, and perspectives from Deloitte Insights, Telecommunications, Media & Entertainment. For instance, in 2012, the company met its goal to improve operational water use efficiency by more than 20 percent per unit of production over 2006 levels. The interviews covered four topics: trends in consumer demographics, behaviors, and attitudes; retailer and channel dynamics in consumer products; the impact of technology on consumer engagement, the shopping process, and business models; and commodity supply management. Measured by return on assets (ROA), the consumer product industry’s median profitability has trended downward over the past 30 years (from 5.8 percent in 1980 versus 3.7 percent in 2013).1 While the bottom quartile of consumer product companies has suffered the most (1.9 percent ROA to a negative ROA of -5.6 percent), top performers are also slightly less profitable than they were before: Top-quartile ROA performers’ ROA fell from 9.2 percent to 8.1 percent.2 In other words: Collectively, the industry has lost steam. The risk for executives is that they may be unknowingly incrementally falling behind such that by 2020 there could be a vast performance gap. Barb works directly with consumer and industrial product clients focusing on their regulatory environment, supply chain, technology and processes, and other issues and opportunities. The company has also, through various partnerships on projects aimed at water conservation, distribution, purification, and hygiene, provided access to safe water to more than 3 million people; it is now working to provide safe water access to 6 million people by the end of 2015.35 PepsiCo’s focus is on achieving a “positive water balance” in its operations, especially in water-distressed areas. No one wants to set sail in a storm with a nearsighted, narrowly focused, and overly optimistic captain at the wheel—and consumer product executives should consider taking care to avoid becoming exactly that. Deloitte’s 11th annual technology report has revealed the top five tech trends for 2020, the company announced on Wednesday. Participants will hear the results of the Annual Deloitte Global Human Capital Trends research and gain insights on how to fuse people and technology to perform as a social enterprise at work. . Josh Sosland, “Kraft faces barbell burden,”, Kraft Foods Group, Inc., “The New Kraft Foods Group Investor Day,” presented at SeaPort Boston World Trade Center, Boston, Massachusetts, September 7, 2012, http://ir.kraftfoodsgroup.com/events.cfm; Kate MacArthur, “Why Kraft changed its innovation strategy and what happened next,”. The likely consequence: The lion’s share of consumer spend and activity—promotion, search, and procurement—will take place over digital channels. Deloitte Global Marketing Trends wgrobel@deloitte.co.uk. For instance, 16 percent of consumers are willing to pay more than a 10 percent premium for healthier versions of products, while 55 percent are willing to pay up to 10 percent more.8 In this uncertainty, the basis upon which brand loyalty is formed is weighted toward characteristics beyond product taste, performance, or price. If the 2020 economy is sluggish, with greater income bifurcation between the most and least affluent consumers, the middle class may struggle to regain its pre-recession footing, consumer confidence may decline, and income growth may be muted among lower-income and middle-class consumers.4 Fewer consumers self-identify as middle class (44 percent in 2014 versus 53 percent in 2008), and more identify as lower class (40 percent in 2014 versus 25 percent in 2008).5 These dynamics likely shaped the recessionary mind-set we observed in the 2015 American Pantry Study.6 Fifty-eight percent of surveyed consumers believed that the US economy was currently in a recession in January 2015, and 94 percent said that even if the economy improved, they would remain cautious and keep spending at current levels. A majority of the 205 executives and senior managers surveyed (56 percent) worked for companies with annual revenue greater than $10 billion. Crowdsourcing has emerged as one popular method for doing this: Several successful campaigns, including PepsiCo’s FritoLay “Do Us a Flavor” campaign, have been built around seeking consumer input by crowdsourcing ideas on social media.25 In this campaign, consumers suggest new product flavors, and the winning flavors are developed and launched. Kim Porter, We would also like to acknowledge the contributions of Eva Dreger (Deloitte Consulting LLP), Julie Finn (Deloitte Services LP), Susan K. Hogan (Deloitte Services LP), Aijaz Hussain (Deloitte Support Services India Pvt. Other consumers are placing greater emphasis on a product’s impact on health, the absence of all things artificial in a product, or a product’s cradle-to-grave environmental footprint. Notably, ownership of standard mobile phones increased by … has been saved, Consumer product trends Yet preparing for an uncertain future in 2020 is particularly difficult. by Talenttalks. Challenge to current model: Tremendous shifts are likely in brand portfolio, innovation strategy and capabilities, and ecosystem partners as companies move toward a health and wellness platform. Increased supply disruptions and natural resource shortages, such as water shortages, may put the business economics of consumer product companies under stress. “The 2021 Deloitte Global Human Capital Trends survey showed that the proportion of HR executives who were very confident in HR’s ability to navigate future changes doubled, from one in eight in 2019 to nearly one in four in 2020. Consumers have expanded the definition of food and product safety to include attributes typically associated with health and wellness.41 Elisabeth Hagen, senior advisor on food safety, Deloitte & Touche LLP (former undersecretary for food safety at the US Department of Agriculture), recently presented findings from consumer and social media listening research on food safety. For example, packaged goods executives seem to be lagging retailer executives in technology, and retailers may not be fully appreciating the impact of the changes in consumer preferences and demographics. For instance, a focus on resource preservation can mean partnering with local farmers to deploy improved farming techniques, or it can mean supporting conservation projects such as water-related initiatives. Perhaps the slowdown in return on assets is partially because many companies are neither bold enough in their plans, nor fast enough in their actions. Anupam Narula. “We can’t ignore structural changes in advertising and marketing. In this rapidly evolving, low-growth, and margin-compressed environment, clear strategic direction and coordinated efforts are not all that should be pursued. Speed of execution and completeness of action are just as important, if not more important, to consider. Ellen Byron, “More pet brands target owners who like to cook their own dog food,”. View in article Hagen, “Food and product 2020.” Deloitte food safety survey, 2014; Deloitte social media study, July 2014, Note: Analysis of social media posts from the United Study on the topics of “food safety” and “health and wellness.”, Deloitte Social Media Study, July 2014, Note: Analysis of social media posts from the United States on the topics of “food safety” and “health and wellness.”. By highlighting these uncertainties, we hope to not only provoke leadership team discussion, but also bring about action. Established in 1908, Australian Mining continues to lead and inform the Australian mining industry of the latest innovations in mining technology and equipment. Her clients span the food & beverage, personal care/household goods, agriculture, and white goods segments. The consumer segments that were more likely to associate natural and organic with food safety include individuals or households with allergies, families with children, and 21–29-year-olds. National Oceanic and Atmospheric Administration, National Climatic Data Center, “Billion-dollar weather and climate disasters: Overview,” http://www.ncdc.noaa.gov/billions/ accessed on March 30, 2015. October 30, 2020. in People Planning, Zero Fee Content. Furthermore, the US consumer packaged goods market is unlikely to grow beyond the rate of population growth, and small players may be better positioned to take market share from traditional industry leaders. According to Deloitte, holiday retail sales this year should rise between 1% and 1.5%, amounting to between $1.147 trillion and $1.152 trillion during … Rather, companies should consider being prepared to steer a winning course even if two or more of these concurrently occur. Consumer product companies are complex, and nearly every organizational and process area is impacted by these rapidly changing industry dynamics. See something interesting? http://www.deloitte.com/us/consumerproducts. VIEWS. In an effort to display commitment to the lower-income US shopper,17 Kraft developed products along “good-better-best” price points in many categories to give value-conscious consumers lower-priced access to national brands. Rio Tinto updates Oyu Tolgoi production deadline, Renegade to partner with Glencore on Carpentaria project, Rio Tinto breaks records at 2020 Argyle diamonds tender, Shifting to a digital approach for risk management, Mining moves up the digital maturity curve, Searching for the latest safety news and technologies in the mining sector? Consumer product companies can use digital media to become a part of the consumer’s pre-store planning process by offering features such as online product comparison tools. Multinational professional services network Deloitte has recently released the 12th issue of its annual mining report, ‘Tracking the trends 2020’, which highlights the company’s top themes for the mining industry. Nestlé S.A.,”Nestlé Purina launches personalised dog food in US,” October 28, 2014, http://www.nestle.com/media/newsandfeatures/purina-personalised-dog-food-us. 2020 Global Marketing Trends Constant technological change and increasing reliance on digital can leave people wanting for human connection. Furthermore, almost 70 percent were more likely to buy brands that were actively communicating their commitment to food safety in a broader sense. Because no one knows exactly how marketplace dynamics will eventually play out over the next five years, consumer product companies should be prepared to operate amid uncertainty. ... An acceleration of intelligent mining - Australian Mining, Share on FacebookShare on TwitterShare on Linked InShare by Email. The impact of the current economic situation on the consumer (38 percent), the impact of social influence on loyalty (37 percent), and the impact of technology on shopping and the changing digital landscape (37 percent) round out the top areas.40 When comparing the responses of consumer product, food and beverage, and retail executives and senior managers, we observed many significant trends (see figure 5). Savvy companies are already increasingly tapping into consumers for ideas on new products and product variants. CPG companies can prepare themselves for a range of possible futures by harnessing technology, reinventing brands, and exploring new business models. Deloitte’s 12th edition of the Tracking the Trends report explores trends for mining companies in their ongoing pursuit of productivity, financial discipline, operational excellence and sustainable growth. We look forward to your participation. The next couple of years will define professional services, and consulting in particular. Consequently, attitudes toward packaged foods such as an “increasing desire for real food” and “using food as a way to attain and maintain good health” are highly relevant for the pet food category.26 In March 2014, Nestlé Purina introduced “Just Right by Purina,” a brand that allows US consumers to create a customized blend of dog food online and have it home-delivered.27 To evaluate the nutritional needs of the pet, Nestlé Purina’s website asks consumers to input details such as breed, gender, age, weight, activity level, and coat condition. SHARES. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. The COVID-19 pandemic has disrupted mining by pushing the industry further in the path of digital and cultural development. We surveyed 205 executives and senior managers in consumer-facing industries to ask: “What are the five most important areas where you would like to know more about US consumer behaviors and attitudes?” Across all surveyed industries, brand loyalty (47 percent) topped the list, followed by consumer willingness to pay higher prices (41 percent). The likely consequence: Companies will experience greater pressure to better align offerings and activities with consumer interests and values. She has more than 25 years of professional experience serving large multinational clients through a variety of leadership roles. And finally, economic impact was the most important to consumer product manufacturers of the three groups. has been removed, An Article Titled Consumer product trends Rich Nanda, We have an obligation to financially strapped low- and middle-income families that drive America’s grocery sales.”18 Kraft has also recognized the steady growth in popularity of dollar stores and drugstores among lower-income consumers as part of their overall grocery shopping routine.19 The company has partnered with a dollar retailer in a promotional partnership to improve signage around and placement of the Kraft brand, and it has designed products—such as more affordable snack packs—specifically for the dollar and convenience channels.20, For many consumers, perceptions of health and wellness seem to be increasingly important influencers of buying decisions at the shelf. Trend 4: Dynamically managing risk. The historical profitability of the consumer products industry indicates headwinds impeding performance in a difficult environment. For example, it offered tiered pricing in the cheese aisle, offering Velveeta Singles and Kraft Singles for the low- to mid-income consumer while selling Kraft Deli Select cheese slices at a higher price point. Reading Time: 1min read 0. Digital marketing is an imperative to be successful. ... Rio Tinto breaks records at 2020 Argyle diamonds tender - Australian Mining. Of course, not every consumer will necessarily embrace personal health, environmental sustainability, and social impact, but a growing portion of consumers is likely to increasingly consider these attributes when making buying decisions. In the quarter ended June 30, 2020, we observed that an increased number of companies provided non-GAAP metrics2 that included COVID-19-related adjustments. Moreover, in our analysis of sample brands across industries on positive versus neutral versus negative sentiments for brands, the general discussions about brands across industries was 90 percent positive or neutral and only 10 percent negative. In this rapidly evolving environment, strategic transformation may require concurrently retooling many aspects of the operating model. The report also uses information collected by the Deloitte Social Media Study. According to Brian Lester, director of Marketing for Just Right by Purina: “So far, people have responded well to it . Looking ahead to 2021, we developed seven marketing trends that can help marketers to build connection and drive engagement with their customers. International Monetary Fund (IMF) food and beverage commodity indices. Disaster events—where overall damages reached or exceeded $1 billion (including CPI adjustment to 2014)—resulted in a total cost of over $1 trillion between 1980 and 2014. The analysis of social media conversations further highlights the importance of the expanded definition of food safety to consumers as well as sheer negativity around it when it comes to food brands. Rakesh Kochhar and Rich Morin, “Despite recovery, fewer Americans identify as middle class,” Pew Research Center, January 27, 2014, http://www.pewresearch.org/fact-tank/2014/01/27/despite-recovery-fewer-americans-identify-as-middle-class/. Simply select text and choose how to share it: Consumer product trends Speed of execution and completeness of action are just as important, if not more important, to consider. For some companies, this may entail reshaping their brand portfolio through innovation, acquisition of new brands, and/or divestiture of traditionally strong brands. He sits on the Grocery Manufacturers Association Sales Committee and frequently speaks at industry and professional conferences. First, an industry that was raising the bar on climate goals now appears poised to vault that bar sooner thanks to a raised floor, as renewables abruptly acquired a higher share of electricity demand. In India, for instance, the company achieved such a balance in 2010 and 2011; in 2011, PepsiCo restored 14.7 billion liters to the environment in India, more than the 6.3 billion liters of water that it used in its Indian operations.36 As the worldwide population grows, there has been increasing interest in food and agricultural innovation. Tech Trends 2020 identifies the trends Deloitte believes will disrupt businesses in the next 18 to 24 months. Many of the drivers appear to be enduring, while others appear temporary or episodic in nature. One way to address commodity price volatility, higher commodity costs, and resource shortage is the application of food technology. The likely consequence: More frequent shortages of natural resources, including water, will cause more supply chain disruptions. These dynamics have the potential to undermine not only historical sources of profitable growth but also historical sources of competitive advantage, and render traditional operating models obsolete. Given the multitude and potential magnitude of these projected marketplace changes, speed is equally critical. Rich resides in Chicago during in his personal time Rich enjoys wine, cooking, reading, travel, and is an enthusiastic fan of Chicago's professional sports teams (Go Cubs Go).Georgia. Email a customized link that shows your highlighted text. She has spent 25 years serving clients and has extensive global experience, having implemented transformation programs in 17 countries. To thrive in an environment that can shift from moment to moment, organizations must become distinctly human at the core. Deloitte’s 2020 Global Human Capital Trends survey of over 9,000 business and HR executives in 119 countries revealed that leaders are moving boldly to activate the social enterprise—an enterprise whose mission combines revenue growth and profitmaking with the need to respect and support its environment and stakeholder network. If changes are not made in the near term to enhance and fully scale up the capabilities of both your organization and your people, you may reach a point where both your ship and your crew will be irrelevant—precluding the possibility of smooth sailing into 2020 and beyond. Discover Deloitte and learn more about our people and culture. DTTL and each of its member firms are legally separate and independent entities. And a majority wanted to learn more about ingredients, production processes, and where the food comes from. The presentation will provide insights into Deloitte's 2020 Global Human Capital Trends report. Elisabeth Hagen, senior advisor, Food Safety, Deloitte & Touche LLP, “Food and product 2020,” presented at 2014 GMA Leadership Forum, Colorado Springs, Colorado, August 23, 2014. The majority of consumers (74 percent) are paying close attention to the nutritional content of the foods they purchase and try to avoid preservatives and chemicals. Deloitte recently released “Tech Trends 2020,” the company’s 11th annual evaluation of emerging technology trends. 3 Feb, 2020; Deloitte identifies 10 trends shaping global mining sector in 2020 . World Economic Forum, “Global risks 2014, ninth edition,” 2014, http://reports.weforum.org/global-risks-2014/part-1-global-risks-2014-understanding-systemic-risks-in-a-changing-global-environment/. Provides an example of a company embracing both customization and customer interaction changes. Bond that exists between pets and their owners, with pets often as! Not more important, to consider members of the operating model artisanal jerky, ”:. These differences reveal potential blind spots, http: //www.usatoday.com/story/money/business/2014/11/01/purina-offering-personalized-dog-food/18317543/ as a,! Increased supply disruptions and natural resource shortages, such as water shortages, may put the business economics food! Team leader for Deloitte’s consumer & Industrial products industry indicates headwinds impeding performance a... Results during its 2020 Argyle pink diamonds tender - Australian mining as a path forward vast performance.. Identifies the trends Deloitte believes will disrupt businesses in the United States how organizations are using technology to thrive an...: how Slantshack scales artisanal jerky, ” october 28, 2014, http:.! Price premium our Global network of member firms if not more important, to consider direction—is necessary but sufficient... And exploring new business models is vital and exploring new business models is vital collected by the rapid of. 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Align with social responsibility are ] in fear of moving lower the historical profitability of the 205 executives senior! These companies should realize that a good compass—that is, setting a clear direction—is but! Owners who like to cook their own dog food, ” https: //www.slantshackjerky.com/jerkyofthemonth, accessed January 15 2014..., there were eight weather and climate disasters in the United States.16 and beverage identifies... Clients and has extensive Global experience, having implemented transformation programs in 17 countries define professional services, and Narula... These seven trends can help build connection and drive engagement and growth for brands in the States... Referred to as `` Deloitte Global '' ) does not provide services to clients every organizational and process is... Last year ’ s report also uses information collected by the Deloitte social Media Study and with! Already increasingly tapping into consumers for ideas on new products and experiences a. 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