Post-Covid priorities for consumer packaged goods companies

The Covid-19 pandemic is having a significant impact on the Middle East’s consumer packaged goods sector, with a dramatic drop in consumer demand and supply chain disruptions.

To weather the storm, consumer packaged goods companies have set up crisis teams to manage rapidly changing day-to-day issues and are enacting their business continuity plans. Meanwhile, against a backdrop of a changing landscape, companies should in parallel take a more long term lens in order to successfully prepare for a rebound in the post-covid-19 era.

According to three experts from Strategy& in the Middle East – Ramy Sfeir, Sami Darouni and Makram Debbas – three mid-term considerations should be given priority.

What do consumers want?

First, consumer companies must gain insight in how behaviours are changing due to Covid-19. Analysis from McKinsey & Company has for instance shown that consumer sentiment is changing for the good, and so are food consumption habits. 

Staying close to consumers and customers will be key in the post-covid-19 world. But, because behaviours are shifting so quickly, “any traditional research will become outdated soon. Rather than relying on syndicated research and other established sources of information, companies should develop systematic approaches to analyse changing market dynamics and shifts in consumer preferences and behaviours on a continuous basis,” recommend the Strategy& experts.

Companies can for instance conduct regular open-ended surveys and enable their front-line sales representatives to collect key customer data and act on them swiftly. “Going forward, they need to invest in robust data analytics and nurture a data-driven mindset to enable more objective and faster decision-making.”

Fixing the supply chain

Second, in line with calls that have been dominating the headlines for weeks, companies must reassess their supply chain and build resilience. The cases of Apple and Adidas seeing major disruptions to their supply chain due to an over-reliance on China sparked a major debate on the need for more flexible and multifaceted supply chains. 

“Beyond that, companies need to increase the visibility of their end-to-end supply chain. Equipping their organisation with relevant and accurate data can help companies make the right decisions to mitigate risks and respond rapidly to any supply chain event that affects customer satisfaction, profitability, and working capital,” said Sfeir, Darouni and Debbas. 

The future is online

The third recommendation focuses on jumping on the booming e-commerce bandwagon. “The largest long-term effect of the Covid-19 crisis will likely be an accelerated move to online ordering, which stood at a low base of less than 5% for most consumer goods in the region before the pandemic. Companies should accept the shift toward and embark upon it.” 

Having already seen positive signs in recent months, Covid-19 has accelerated the shift to online, and companies should be ready to capitalise on the potential, or risk missing out. “They must build or acquire the required capabilities to provide a frictionless online ordering and delivery experience. Another possible approach could be to develop strategic partnerships with established e-commerce players.” 

“By taking the right steps now and building for the future, companies can build the knowledge, processes, and capabilities to emerge fitter and stronger,” concluded the three Strategy& experts.