Sustainability Matters
Research shows that about 50 percent of U.S. consumers consider at least one sustainability factor when selecting a consumer packaged goods (CPG) item, and nearly 40 percent also consider organic products. This month, Somjit Amrit, vice president and global head of the CPG industry vertical for Wipro Technologies, reveals why CPG firms should not underestimate the importance of sustainability initiatives.How important is sustainability for CPG companies?
Amrit: It’s surprisingly very important. CPG companies are beginning to realize a trend of consumer tendencies to want to buy products that have recyclable packaging, for example. At the same time, consumers do not want to pay more for sustainable products. People want to look for packaging that is simple, recyclable and easy to use.
Hence, CPG companies need to figure out ways of developing and delivering sustainable products that will integrate sustainability into every aspect of their operations and manufacturing processes.
What key focus areas are CPG companies committed to delivering on today?
Amrit: Companies are now looking at emerging markets as the growth area to enable their top lines. Supply chain harmonization from suppliers to consumers will be one of the key focus areas for global CPG companies. CPG companies will see greater need for institutionalizing matured processes, and implement them faster, from the developed geographies. Key areas include:- Mitigating supply chain risks that will result in setting sustainability goals for suppliers, their own operations and possibly even collaborate with competitors in some cases to realize supply chain efficiencies.
- Sustainable operations that will focus on usage of water, carbon emissions, waste management and efficient energy.
- Sustainable innovation: Design will take center stage. CPG companies will make added efforts to re-design their products to be more sustainable — while also saving money and improving the consumer experience.
What can CPG companies do to achieve these goals?
Amrit: Major CPG companies have established sustainability strategies that guide their business operations around the globe. These sustainability strategies include measurable goals to reduce the company’s use of energy and water, and to lower the amount of waste and carbon dioxide produced in the process of making products.
Performance management will be the mantra toward achieving excellence and setting benchmarks.
Having a sustainable framework in place that will enable CPG companies to collaborate effectively is of vital importance. We feel that companies bucket their initiatives broadly around three headings:
- Business: The definition of definitive tangible objectives toward reducing costs through efficient use of materials and energy, engage in sustainable innovation, etc.
- Process: The creation of corporate performance management tools will enable tracking and monitoring toward achieving sustainable goals.
- Intelligence: A key success factor that will enable continued and sustained excellence is the adoption of predictive analytics to enable pre-processed intelligence for effective decision making.
Note: Wipro is recognized for its internal and external efforts related to sustainability. Wipro is ranked A+ by the GRI framework; is ranked No.1 for the India Carbon Disclosure Leadership Index; and is a part of the Dow Jones Sustainability Index.