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PA OPINION

Three key insights from the Consumer Goods Forum Global Summit 2019

Nearly 1,000 C-level delegates from 43 countries descended on Vancouver, Canada, to attend the Consumer Goods Forum (CGF) Global Summit 2019, this month. The topic? Innovation at the Speed of Life. We were there to share how organisations can innovate for sustainability and create a positive human future, but there was a lot to learn from global companies like Coca Cola, Nestle, Microsoft and Wal-Mart, as well as ingenious start-ups.

Here are our three key takeaways from the event:

1. Sustainability is at the core of the CEO agenda

C-level leaders know sustainability isn’t just an important moral imperative. It’s a critical driver of commercial success, a key to connecting with consumers and a new source of revenue. A recent study found sustainability-marketed goods contributed 50.1 per cent of growth in the consumer packaged goods market from 2013 to 2018 and contributed $113.9bn in sales in 2018 – a number that’s sure to rise.

Max Koeune, President and CEO of McCain Foods, highlighted the value of sustainable thinking in his presentation at the Summit. He pointed out that people waste a third of all food, and some 28 per cent of agricultural land produces that waste. In a bid to tackle part of the problem, Koeune said McCain Foods buys crops on a field basis, accepting ‘ugly’ fruits and vegetables they would traditionally discard and using them in new products. In addition, Koeune emphasised the industry’s use of artificial intelligence (AI) to analyse data and drive crop yields.

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While Boards often need to drive sustainable initiatives, getting the support of everyone in a company will deliver results at incredible pace. Kroger, the largest supermarket chain in the US by revenue, talked at the Summit about its goal of eliminating waste by 2025. Kroger achieved its zero-waste target for 13 plants in the time it had allocated for three to four, thanks to employee enthusiasm for the initiative.

Companies get the most from sustainability when they enlist employees as champions and collaborate with their suppliers and partners to transform processes across the value chain. So, Boards should look to deepen sustainable partnerships and tie initiatives to business growth objectives.

2. Companies should lead with purpose, not just revenue targets

Forget the ‘Greed is good’ speech by Gordon Gekko in the movie Wall Street. In our CGF Summit insights video, PA consumer and innovation Thibaud Gigandet says: “The CEO of Nestle, Mark Schneider, was actually quite explicit that these times of bragging about size and financial numbers are over. And that you see more and more companies focused on the purpose of what they do.”

In his session, Schneider urged companies to develop long-term relationships to become a force for good, tackling thorny challenges like deforestation and taking a trust and verify approach to evaluating progress against government commitments. He said he’d seen the rise of values-driven consumers who are willing to spend more on high quality food and beverages created with sustainable processes.

Research shows purpose-driven companies also drive employee engagement, help staff navigate change and achieve better results. It’s something we know well, as it’s core to the PA way of working. Our CEO, Alan Middleton, wrote in our 2018 Annual Review: “A clear purpose is an anchor that helps you sense-check your plans, make good decisions and organise what you do. It’s a compass that helps you choose the best course and navigate through opportunities and challenges. And it’s a beacon that helps you attract the best people and motivate them to perform.”

3. Companies need to build trust with younger consumers

Multiple trends are driving brand mistrust, especially with younger consumers. Like other consumers, media-savvy millennials and Gen Z do their own online research, share insights socially and read negative news about corporate failures – but they’re more affected by them.

Research from the CGF and global change agency Futerra found that, in the US and UK, 66 per cent of millennials think brands are never honest or not honest enough about environmental issues. For Gen Z, that number jumps to 79 per cent. These cautious consumers are concerned about the treatment of factory workers and claims about product development processes, sustainability and health.

Building trust will take ingenious approaches to transparency throughout the supply chain. Blockchain, for example, can create an immutable record of the provenance of ingredients. Fundamentally, though, trust will come from long-term, consistent honesty with consumers.

Building a positive human future

The CGF Global Summit 2019 showed how the industry is trying to make a positive difference in the world. It’s exciting to see such a range of household names and innovative start-ups all working towards a positive human future in a technology-driven world. To accelerate this transformation, we believe it’s vital for incumbents and newcomers to work together. Only then will true innovation, such as PulPac’s paper-based alternative to plastic, be able to scale and drive meaningful change globally.

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