Mercer has released its outlook for the consumer packaged goods industry and says that leaders in the sector are positioned to disrupt and embrace a new normal.
The outlook for 2022:
The baseline outlook for 2022 is relatively strong growth for consumer packaged goods (CPG) companies. Consumers have money to spend. Yet the supply chain is obstructed, talent is becoming scarce and costs continue to creep upward — all of which affect the industry’s ability to reach its desired growth.
Supply chain struggles are unlikely to be resolved quickly or entirely and companies would do well to evaluate suppliers and explore opportunities for expanding supplier relationships to reduce exposure to geographic bottlenecks and freight constraints.
Investing in your people:
Forward-looking CPG companies will need to re-orient their strategies and return to long-term growth fundamentals. Companies are struggling to find an adequate supply of employees to fulfill supply chain demands and execute manufacturing processes. Simply put, workers are not available to work. They’ve quit their jobs in search of opportunities in other industries or have left the workforce temporarily to recover from mental burnout.
Instead of being constrained by bottlenecks, CPG companies have the opportunity to disrupt and embrace a new normal.
Employees are seeking careers and development supported by upskilling and reskilling. The business must focus on investing in nurturing tech-savviness in its staff to keep up with the digitalisation of the industry. However, HR is disconnected, with its priorities focused on the total rewards package, while the C-suite is somewhere in the middle of the employees and HR, wanting the “right” talent in place while managing employment costs.
When looking at the priorities of C-suite and HR leaders for the year ahead, we find that the two align on investing in health and risk protection programs for employees and improving total rewards packages.
Still, they have yet to connect on putting sustainability at the heart of the transformation agenda. The C-suite is ready to move on closing pay, gender and equity gaps, but HR is further away.
We ascribe this difference in alignment to the C-suite having a greater focus on the actions they can take immediately to make a difference for their organisations today.
For the full report, visit Mercer.
Mercer is a Partner of the Drinks Association.