Digital business transformation of consumer packaging goods (CPG) industry is influencing business outcomes. Industries are prioritizing investments in product innovation. Globalization and introduction of new products have made the competition more intense. Time to market for new product needs to be significantly reduced due to intense competition in the industry. Industry leaders along with retail-partners are re-organizing their strategy towards data driven digital from traditional models. Rapid innovations in technology have introduced a new dimension to the business strategy. Increasing application of social media, mobility, cloud and big data has helped shift the focus towards consumers.
Following are the challenges faced by consumer packaged goods industry
Changing consumer demands
As the middle class population increases, worldwide demand for consumer goods will also increase. Along with this, further challenges arise in fulfilling the demand of aging customer requirements – different size, packaging, and health-related ingredients. The success of companies lies on how effective CPG companies are addressing the changing demands of consumers.
Today’s generation of shoppers is very demanding and this is a major driver of innovation in the CPG industry. Thanks to social media, there is continuous feedback from consumers about the quality and fitness for purpose of products. Companies have realized that they must create new products, achieve faster time to market and lower operational costs in order to remain competitive and grow.
Compliance and regulatory pressure
CPG companies are facing the challenges of mitigating operational risks and managing conformance due the demanding nature of global regulatory environment. As the industry is globalized, manufactures rely on global supplier network for operating margins and meeting international compliance and regulations becomes a crucial factor.