Change is constant for CPGs

by Josh Sosland
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CPG
Accelerating growth is within reach for larger consumer packaged goods companies.
 
WHITE SULPHUR SPRINGS, W.V. — Accelerating growth is within reach for large consumer packaged goods companies but will require agility at a time the industry grapples with major changes on numerous fronts. That was the message of a panel of leading CPG executives culminating the 2017 GMA Leadership Forum.

 

The Grocery Manufacturers Association event was conducted Sept. 10 on the final day of the group’s meeting held at The Greenbrier in White Sulphur Springs, West Virginia.

Shiv Iyer, managing director and partner at Accenture, moderated the discussion, which featured Michele G. Buck, president CEO, The Hershey Co., Hershey, Pennsylvania; M. David Darragh, president and CEO of Reily Foods Company, Inc., New Orleans; Benno O. Dorer, chairman and CEO, The Clorox Co., Oakland, California; George Zoghbi, COO, US Commercial Business, The Kraft Heinz Co., Chicago; and Paul Grimwood, chairman and CEO, Nestle USA, Inc., Rosslyn, Virginia.

Paul Grimwood
Paul Grimwood, chairman and CEO of Nestle USA

Calling the current situation “very dynamic,” Grimwood said the industry’s fate rests on how “we actually deal with that.” Preparing for this change will be made easier by what he called “a little pause right now while we try to work that out.”

“But I think that companies are reacting to those changing dynamics in the market and are reacting very quickly,” he said. “And I think, actually I’m very excited because the pace of change, the way we have to invest, the capital we have to invest is probably going to be more dynamic than any time in the last 30 years.”

Growth is in the marketplace today for those who know where to look, Dorer said.

“If you think there is growth, there will be,” he said. “The opportunity for all of us is to find growth currents. If you look at this as the sea, the sea is pretty flat. Underneath, there are growth currents. And there are many. It’s the multicultural transformation of the demographics. It’s millennials. It’s baby boomers. There is growth everywhere. For us, the opportunity is to get hold of those growth currents and drive them.”

Buck said Hershey is working hard to maintain a focus on its heritage business while simultaneously working intently to change its corporate culture to adjust to industry changes.

Michele
Michele Buck, president adn CEO of The Hershey Co.

“In the first six months of the year our core brands grew mid-single digits in an indulgent category at a time there was pressure in the marketplace,” she said. “I think it’s because in the category we are in, a lot of the key players really played well on some of the fundamentals. They had great innovation. Good merchandising at retail. So some of the fundamentals we can drive against and still get growth.”

At the same time it is necessary to build new business models within existing food industry organizations to handle increasing complexity, she said.

“We may still need some of our existing models against our core, but we may need some very different models against some of the growth vectors,” she said. “So I’m very interested and spend a lot of time thinking about the organizational construct that will let us win.”

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