Consumer Goods CEOs Identify Ways to Ensure Thriving Businesses in Turbulent Times

KYOTO, Japan — The Consumer Goods Forum (CGF) published a report developed with EY (Ernst & Young) that brings together opinions from 17 consumer industry leaders to understand how they are working together to ensure resilient businesses and accelerate sustainability action amid multiple crises.

Launched ahead of the CGF’s Global Summit in Kyoto from June 6-8, leaders from some of the world’s most influential manufacturers and retailers identified staying connected to consumers, new digital platforms, securing talent and maintaining sustainability goals as major long-term challenges they face.

The report, “Pursuit of harmony, working together in times of turmoil,” underlines the stark reality for an industry which has weathered the storm of ongoing global crises such as the global pandemic, supply chain disruption, geopolitical conflict, increased energy prices and the effects of the climate emergency.

Insights from CEOs across leading companies including Ahold Delhaize, Ajinomoto, The Coca‑Cola Company, Grupo Éxito, Kellogg Company, L’Oréal and Mondelēz International revealed three overriding calls to action for companies across the industry:

1. Recognize that you cannot do everything all at once: Successive crises have had a compounding effect on business operations. Many CEOs interviewed shone a light on the difficulties of trying to simultaneously address multiple issues — summarizing that challenges must be prioritized to ensure that progress can be made without suffering the paralysis of trying to deal with everything. Many CEOs make large challenges manageable by creating distinct and relatively autonomous workstreams to sharpen organisational focus.
2. Focus on building resilience: Consumer companies demonstrated their resilience during the pandemic. These transformative changes were born of necessity but laid a strong foundation to address new challenges. Leaders interviewed for the report emphasized the importance of resilience to navigate disruption and achieve long-term goals over the tactical actions taken in response to disruption.
3. Share for success: Business challenges of today require more cooperation than ever. Clear lines must be drawn to protect companies’ competitive edge, but open and reciprocal sharing within an extended network of coalitions and partnerships brings benefits to all. 

“Weathering short-term challenges cannot distract leaders from delivering long-term value to their companies and to people and the planet,” said Wai-Chan Chan, Managing Director of The Consumer Goods Forum. “As the group of CEOs set out in this report, success depends not only on how leaders work in their companies, but also how they work with others across the industry. No organization can overcome the many challenges they face today alone. Systemic solutions can only be created through collective action.”

Two themes that were a prominent feature of CEO concerns within the report were supply chain security and cost. Companies are trying to drive down costs while ensuring their products can be sourced, made, distributed and sold in the most responsible and sustainable way.

There is no “one size fits all” approach to fix the array of supply chain challenges, so a nuanced strategy is needed. This includes using digital tools for measurement, tracking and improvement while also leveraging procurement and innovation to use substitute materials or diversified supplier networks. On rising prices, leaders’ immediate actions have focused on taking cost out wherever possible, increasing operational efficiency and rebalancing portfolios to lower-priced alternatives.

Those interviewed also reported that despite operating in a heavily competitive environment where assets that provide a competitive edge tend to be closely guarded, many were keen to share challenges and collaborate — particularly to remain focused on sustainability ambitions.

“With so much constant disruption, consumer companies are caught in the middle, trying to balance changing consumer preferences with supply chain dislocation, rising costs and higher debt burdens,” Kristina Rogers, EY Global Consumer Leader, said. “There is much companies can do, however, to thrive and not just survive in today’s climate. Volatility and adversity can be engines for innovation, efficiency and resilience, which improve growth and margin.

“Consumer leaders must be especially attuned to the changing nature of consumer behavior to address the challenges of retaining loyalty and understanding influencing factors in how and why they purchase. Consumers expect to be heard, and companies must bring them into the collaboration process. Given today’s headwinds, collaboration is no longer a strategic option but an essential activity between businesses, governments, organizations and consumers themselves to optimize outcomes for all.”

The full list of contributors to the report included:

• Steve Cahillane, Chairman and CEO, Kellogg Company
• Taro Fujie. President and CEO, Ajinomoto
• Dr. Steffen Greubel, Chairman of the Management Board, METRO AG
• Magnus Groth, President and CEO, Essity AB
• Yoshinori Isozaki, President and CEO, Kirin Holdings
• Jeffrey Lu, CEO and Executive Director, China Mengniu Dairy Company Limited
• Brian McNamara, CEO, Haleon plc
• Carlos Mario Giraldo Moreno, CEO, Group Éxito
• Frans Muller, President and CEO, Koninklijke Ahold Delhaize N.V.
• Malina Ngai, CEO, A.S. Watson (Asia & Europe)
• Alexis Perakis‑Valat, President, Consumer Products Division, L’Oréal S.A.
• James Quincey, Chairman and CEO, The Coca‑Cola Company
• Daniel Rodríguez, CEO, FEMSA
• Nathalie Roos, CEO, LIPTON Teas and Infusions
• Lionel Souque, CEO, REWE Group
• Dirk Van de Put, Chairman and CEO, Mondelēz International, Inc.
• Galen G. Weston, Chairman and President, Loblaw Companies Limited