CG, Retail Companies Partner to Improve Value Chain

During the past year, executives the retail and consumer goods industries have worked together as part of the Future Value Chain initiative to focus on how, through a set of collaborative initiatives, the industry can continue to bring benefits to consumers. This effort was triggered by the rapid changes taking place in society, consumer behaviors, the environment and technology.

The Future Value Chain program, facilitated by The Consumer Goods Forum, has produced a new report, titled "2020 Future Value Chain: Building Strategies for the New Decade," based on the outcomes of recent working sessions. The working sessions brought together 200 executives from the world's leading retailers, manufacturers, academics, third-party providers and industry organizations to define the strategic objectives on which the industry should focus its energies.

The objectives identified include:

• Make our business more sustainable. In 20 years, the world's population will reach 8.3 billion and this growth will put more pressure on natural resources affecting the cost and availability of ingredients. The industry needs to collaborate to address sustainability in future business practices, particularly as sustainability becomes an increasingly important aspect in consumers' buying decisions.
• Optimize a shared supply chain. Key trends such as increasing urbanization, consumer awareness about sustainability, and the increased adoption of consumer technologies and business technologies will require new and collaborative distribution models and optimized "smart" supply chains where information and assets are shared.
• Engage with technology-enabled consumers. One of the specific challenges highlighted is sustaining a dialogue with consumers through their preferred channels and technologies. Consumer buying behavior has been impacted by the use of the variety of technologies in people's lives, accessible at any time, from any location, leaving consumers more informed about products and services. Companies need to drive greater value by engaging with consumers and maintaining a two-way dialogue to improve responsiveness to their changing needs.
• Serve the health and wellbeing of consumers. The overall increased importance placed on health and wellbeing will bring strong pressure on the industry to find new ways to inform and engage consumers, governments and other stakeholders. Achieving this objective requires full industry collaboration and a focus on issues such as product safety and providing healthier choices, with an emphasis on "quality of life."

The report provides a practical framework for companies and industry associations to align on these objectives and to mobilize on concrete initiatives.

"The trends highlighted in the report underline the need for even more collaboration among all parties in the value chain as we move through these challenging times. We should treat this as an opportunity to urgently act through putting in practice new plans and strategies that better suit the changing needs of our consumers," says Nigel Bagley, director for Industry Affairs, Unilever, and co-chairman of 2020 Future Value Chain.

"Consumer demands have already increasingly changed in the last few years through the use of new technologies. It is time now to sit down with our industry partners and talk about how, by working together, our industry can better serve the 2020 consumer. We are very excited about what the future holds," said Dr. Gerd Wolfram, managing director, METRO Group, and co-chairman of 2020 Future Value Chain.

"We have the capability to achieve success for our industry now and in the future," says Jean-Marc Saubade, managing director, The Consumer Goods Forum. "Through the collaborative efforts from the entire industry and its partners, the industry needs to work closer than ever before, bringing companies together and driving projects and programs through collaborative engagement. It is up to us all to continue to work together to choose a better future."

The full report can be accessed at www.theconsumergoodsforum.com and www.FutureValueChain.com.