'Urgent Transformation' Needed Post-Pandemic, CPG Group Says

The scars of the COVID-19 pandemic will remain long after the pandemic's public-health and economic crises abate, and CPG businesses must continue to accelerate change in response, the Consumer Brands Association suggests in a new report.

With fresh memories of stockouts, for example, nearly half of respondents to a CBA/Ipsos poll said they will plan to stay stocked on items such as toilet paper (46%) and shelf-stable food (45%) post-pandemic. A similar share of respondents, 47%, said they have used online ordering for delivery or click-and-collect pickup, and more than three-quarters of online shoppers plan to continue to use these services once the pandemic ends.

In a news release, the CBA said that while it expects 2021 CPG purchases to decelerate between 1% and 2% from 2020 levels, the annual rate of purchases will still be up 7.4%–8.5% as compared with 2019.

For consumer packaged goods companies, fundamental shifts in shopping behaviors and heightened expectations in the areas of product transparency and companies' social-responsibility performance demand an all-in effort to ensure the industry emerges "more resilient, trusted and prepared to meet the needs of consumers, every day," CBA President and CEO Geoff Freeman said.  

"Urgent transformation is the only way forward," Freeman said in the release. "There is no 'normal' to which the industry will return."

One-third of the 1,008 U.S. consumers polled by CBA said the threat of COVID-19 will never completely go away; a plurality said they'll consider the pandemic over after most Americans are vaccinated. Only 7% believed the pandemic was already over. 

Making the CPG industry more resilient and trusted by consumers as companies forge their way through the rest of 2021 means making supply chains more agile and decentralized, with more real-time visibility into inventory and consumer-specific data. "During the pandemic, we saw consumer trust linked to reduced supply-chain disruptions," CBA VP of Supply Chain and Logistics Tom Madrecki said in the report. "Consumers were drawn to the brands they knew and loved, because they wanted something they could count on."

Consumers surveyed for the report put supply-chain improvements to minimize disruptions atop a list of things CPG companies could do to boost consumer confidence post-pandemic, the report noted.

Also a priority for consumers: being able to access more information about the products they buy. Around three-quarters (73%) of consumers polled said they support putting product information that can't fit on a physical label online, accessible via a scannable QR code, for example. More than half said they have greater trust in companies that provide more-than-required product info.

Trust came to the fore for consumers in survey questions about social responsibility, too. Respondents indicated they're more likely to punish brands they learn something negative about than reward brands for positive action. Twenty-five percent of consumers said they would punish a brand for something they disagreed with, whereas 20% said they'd reward a company for something positive they had learned about a brand. A plurality, 40%, said they were equally likely to take either action.

"How brands are perceived is increasingly rooted in their social and environmental values," CBA Executive VP of Industry Engagement Ellen Davis said.