Economic Trends Beg for Industry Process Disruption


F4SS Executive Director, Lisa Shambro offers thoughts/ideas on new approaches suppliers can consider in the current economic environment to save time and be invaluable to their customers.

Life is great, right? (OK – forget for a minute about the elections drama – and don’t get me started! Though hopefully settled by the time you read this.) I mean economically – things are good, right? The stock market is up, a lot of good earnings trends overall, relatively low unemployment, the troubles of 2007 seem far far away, right?

From where I sit it seems the winds of economic change have had somewhat opposite impacts in the CPG industry vs. what we might have expected. Let’s take a closer look…

Before the difficulties we experienced nearly 10 years ago, CPG companies were doing OK. For the most part, business was healthy, consumers were patronizing brands, particularly in hot/new categories. Then, we experienced the economic downturn (hereinafter referred to as the “downturn”) and what happened? Many CPG companies saw an uptick. Why? Because consumer purchase patterns changed.

Prior to the downturn, consumers were spending on luxury goods, eating out more often, and generally reflecting a more affluent lifestyle. After the downturn, consumers began to reevaluate and shift their spending habits. On the food side, it was cooking at home more. On the non-foods side, it may have been a shift from a salon to at-home treatment or products. This often led to higher growth rates vs. pre-downturn results.

Since then, things have continued to evolve. Economics have improved in many areas. As a result, consumer spending has shifted toward where it was before the downturn to the distress of CPGs – more eating out, more luxury purchases. The once healthy growth in bottom lines has waned, in general, leading companies to search for other means to deliver shareholder value.

This has led the industry, overall, to some challenging times. I continue to hear of internal challenges faced by many large CPG companies. These range from long, drawn out reorganizations in which colleagues are separated, to significant budgetary restraints. I’m not sure if these challenges are faced by all functions, I know I have seen a great deal with the individuals managing the external manufacturing function.

What does this mean for all of us? First and foremost, it’s doing more with less. This is after we were already doing more with less. It’s more work for fewer people, more responsibility, more volume, more, more, more. We can bemoan our fate, or we can embrace it. And, I would recommend the latter as it’s much better for your outlook and your health! Below are some thoughts/ideas on new approaches to consider in our current environment. In a nutshell, they are potentially creative ways to save time which all can appreciate – and it makes you, as a supplier, invaluable to your customer!

  • Folks can’t travel as much anyway – can we start doing more video meetings via google, skype, or other video conferencing means?
  • If you can’t meet in person, seeing people really does make a difference in terms of building relationships. No one is excited about video – however it really does make a difference. How can we make this part of how we operate?
  • Creative meeting management
  • How can you make meetings shorter and more effective? Everyone appreciates time saved – especially now! (and be sure to call out your efforts!)
  • How can we solve customers’ problems for them in creative ways?
    • This makes you an invaluable resource
    • How can you learn of some of their pain points, understand their solution parameters and come up with ideas?
    • I have heard of some very creative approaches within the industry of late, suppliers thinking out of the box, creating alliances with other suppliers to offer creative solutions for customers.
  • Are there technologies we can employ to make our lives easier/better/faster/more efficient? One example is an app called MobileDay – it enables you to join conference calls without having to key in the meeting code. Much easier and safer than having to toggle back and forth or write it down!

Net – desperate times require desperate measures. It’s time to redirect energy from malaise to problem solver – to game changer – to disrupter! I’d love to hear your ideas – please let me know about them at lisa.shambro@f4ss.org.


Lauren Wilson


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