How Sustainability Can Amplify Marketing Resiliency for CPGs (part 1 of 2)

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2020/11/27 How Sustainability Can Amplify Marketing Resiliency for CPGs (part 1 of 2)

How Sustainability Can Amplify Marketing Resiliency for CPGs

Source from: How Sustainability Can Amplify Marketing Resiliency for CPGs | 2020-11-20 | Flexible Packaging (flexpackmag.com)

Fulfilling short-term needs while maintaining long-term priorities has been an ongoing challenge for organizations since the onset of the pandemic. The global response to COVID-19 has slowed the day-to-day operations of many companies but amplified the progression of transformations that were already brewing before the outbreak. The issue of sustainability through the lens of environmental, social and governance (ESG) principles isn’t likely to be an exception—although an immediate concern for hygiene has caused consumers and organizations to fall back into habits that are conventionally scrutinized for their environmental impact, like discarding plastic and neglecting recycling. Fundamental shifts in prioritization could make it more important than ever for CPG companies to develop marketing resiliency by renewing their commitments to sustainable development.

Supply chain disruptions necessitate a willingness to transform, which could prompt adjustments that unlock sustainability benefits

As early as March, more than 75% of companies reported disruptions in their supply chains as a result of the outbreak, with some CPGs and food retailers finding themselves unable to keep up with huge spikes in demand, as others faced more challenges upstream. Although the CPG industry has traditionally been slow to adopt digital solutions across their supply chains, that is likely to change as they’re forced to evaluate their current situations and realize how those who have already taken action are benefiting. P&G, for example, which recently reported its largest increase in sales in decades, has been a leader in using artificial intelligence and machine learning to automate demand planning.

COVID-19 is strengthening the incentive for CPGs and retailers to digitize their supply chains, which could result in reduced waste and better energy monitoring, in addition to cost savings. Additionally, this unique situation has created an environment where supply chain transformation can almost be seen as a mandate for long-term success, and within this new environment lies the opportunity to activate sustainability benefits that have remained unrealized for years. Out of more than 1,000 consumer product companies that made organizational changes after participating in surveys led by The Sustainability Consortium from 2016-2018 , 77% of them engaged their suppliers — and their average evaluation scores increased by 30%. When transparency is encouraged by external forces and facilitated by technology, companies are better able to reassess their supply chains, choose partners knowledgeably and improve their footprints.

Designing for resilience will be increasingly important over the coming years, and this very idea is at the center of ESG principles that guide companies toward sustainability
As dramatic and far-reaching as the impact of COVID-19 has been, the short-term shifts we have seen have only given us a glimpse into what a lack of organizational preparation against systemic risks can mean for the future. The current health crisis has generated a reinvigorated focus on building resilient companies that can withstand unexpected disruptions — this same idea is at the center of the ESG principles that guide sustainable companies.

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