Seek New Growth
Seek New Growth. The ways in which CPG companies identify new growth opportunities is outdated. They need to move from thinking about the “total addressable market” (as defined by existing CPG categories) to the “total addressable problem” (as defined by human needs). The new pace of change is stunning – and companies are struggling to keep up with leapfrogging consumer expectations. More than ever, individuals are architects of brands. Consumers expect to be active participants at every stage: as investors through platforms like Indiegogo; as manufacturers with at-home options like Bartesian; as creators, marketers and sellers through platforms like Etsy.
This trend originates from the report:
Accenture - A New Dawn for CPG 2023
The old pathways to innovation are not enough; people are demanding holistic solutions. If we are to seize these unconventional — and superbly valuable — opportunities, we must embrace new business models, disruptors and innovations from outside the industry. Breaking free of any legacy mindset or operating model takes time, particularly for large organizations.
This includes the long-established approach for achieving industry dominance. Historically, CPGs have focused on winning by targeting current industry best practices. But given the rate at which technology and consumer habits are evolving, what is “best-in-class” will have changed by the time the company gets there.
Thus, we encourage CPGs to take a cue from hockey great. “Skate to where the puck is going, not to where it is.”.
- Wayne Gretzky. Future Ready CPGs make the leap to mastering emerging capabilities in the areas where they must win – before the puck is out of reach. Disruption is increasingly driven by new business models predicated on human and other kinds of data, opening the door to new sources of growth.
Data-led business models and engagement will not only differentiate brands, but also provide insight that drives new and continuous innovation. L’Oréal’s CEO, Nicolas Hieronimus made the following statement in his speech during CAGNY 2021: It's a virtuous cycle where we know what the consumer wants [and] at the same time, we feed our laboratories and our R&I with this consumer data that will allow them to invent future products. More than ever, individuals — not companies — are the ones who own and architect the brand.
And existing business models prove that consumers expect to be active participants at every stage: as investors through platforms like Indiegogo; as manufacturers with at-home options like Bartesian; and as creators, marketers and sellers through platforms like Etsy. This shift is creating a tidal wave of innovation — and increased competition. On average, five new CPG brands have been launched every week for the past decade, often with new business models that defy the conventional wisdom about what CPGs provide.