CPG: The solution for supply chain woes
By Mel - February 16, 2022
We’ve got to face some facts. The CPG industry has not had it easy. A global pandemic completely derailed supply chains, and brands across the board have suffered. On top of that, the consumer packaged goods industry has always been changing. So, what’s the solution? Let’s dive into how CPG companies can keep supply chain issues at bay by closing the gap between their brand and consumers.
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Setting the CPG scene
Imagine this: your brand sells delectable chocolate-dipped pretzels, but things have been less than smooth recently. Consumer demand is skyrocketing, and throw in labor shortages, a lack of materials, and congested transportation points, and you have a very high risk for supply chain disruption. Disappointed customers and lost sales may result in a business impact that not even the best sweet-and-savory snack can rectify.
Before diving into the pain points of the supply chain and identifying possible solutions, let’s get some more context. What food industry trends are affecting supply chains? What are consumer conversations focused on for the future of CPG?
Conversation Cluster surrounding CPG conversations online.
The overarching theme for CPG food & beverage brands will be the transition into a more conscious way of producing food, a change that is being led by two factors:
Changing consumer behavior directly impacts supply chains and how CPG companies operate. Brands need to respond by changing the way food is sourced, prepared, and packaged. This in turn has a large impact on supply chains. Brands that handle this transition, will manage to bring consumers closer and come out successful. By looking at consumer conversations around the industry, brands will be able to identify the topics that will help their business as well as understand how customers are responding to inflated prices, product shortages, or delayed delivery times.
Ever since COVID-19 began, supply chains around the world have suffered, and at the moment, the strain is impacting consumer goods. From the cream cheese shortage of December 2021 to the rise in costs for various brands, consumers need to change brands, or pay higher prices for their usual products. Understanding how consumers are responding to lower product availability and higher prices will allow CPG brands to find the best ways to improve communication and prioritize production for the year.
In 2021, food prices increased globally by 28%, which made various CPG brands respond by raising the market price of certain products. Even though price indexes for products like sugar, vegetable oil, and cereals decreased in December, the predictions for 2022 are that prices will rise again. With the Omicron wave, there has been a decrease in the number of workers, and a rise in supply uncertainty, making it necessary to monitor consumers' reactions to rising prices and the low supply of products.
Identify the pandemic problem
CPG brands are being thrown a ton of challenges mostly due to COVID-19: supply chain disruptions, labor shortages, elevated consumer demand, and soaring inflation. To top it off, there’s no indication or guarantee things will start to look up in 2022. Food and beverage leaders will continue to fight to remain competitive and respond to constantly changing trends.
The pandemic has also caused other issues. In Australia, there have recently been shortages, which have been caused by the supply side. Omicron has generated a shortage of staff, and a third of the country's truck drivers are currently not working. Meat production has also fallen drastically, especially as the country faced shortages of rapid antigen tests. All these results have led to a total of 122K mentions of shortages in Australia during January, with a 50.3% negative sentiment. As shown below, over half of mentions have included anger, while almost 40% had a hint of sadness or fear.
