Despite the uncertainty surrounding the future of the industry post-Brexit, the FMCG market is often described as recession-proof due to shopper’s affinity for cosmetics, health care products, coffee, alcohol and chocolate. Consumers purchase such items regardless of market conditions or exchange rates and with an increasing population this customer base continues to grow, which is why the FMCG market has proven to be resilient to economic change time and time again. However, the question still remains as to what the market is likely to do in the coming years; how will it react? How will your supply chain need to respond and where are the gaps?
The future of business
We have access to a national network of thousands of professionals in the FMCG procurement and supply chain market, of which we recently surveyed 500 leaders where we asked them “What keeps you awake at night?”
The findings from the survey combined with the knowledge base of our business partners and professionals gives us a unique insight into the upcoming trends within the industry for the foreseeable future.
Like with all industries in the UK there will be changes within the dynamics of FMCG businesses, particularly in regards to EU trading, and it is essential that organisations recognise this. Obviously if the GBP stays weak the rate of exports will always be higher, but this doesn’t help if you are buying in dollars and selling in pounds.
In an age old battle between retailer and supplier both parties are very reluctant to pass on any additional cost to the consumer. Nobody wants to be the first to do this. As a retailer you don’t spend millions on price checking technology to become the more expensive player and as a consumer brand with fierce competition you don’t want to lose your share of the market. So how are companies likely to cope?
Return of the promotion
With year-round, rock-bottom prices being the current trend in the market, promotions have been few and far between since 2015. Any price increase from the retailer on a product coming from abroad is likely to be balanced by another on offer next to it from the UK. Promotions will be on the rise in the coming years and this volatility in demand will cause issues if not appropriately controlled. As a result we will see an increase in the need for highly skilled professionals in demand planning.
Quality, ethics and sustainability
With the push to save money on all fronts there has never been a more tempting time for suppliers to tighten their own belts which may result in less consistent quality and sometimes unethical practices. Demand for SQA/SQM knowledgeable procurement professionals will rise and ethical sourcing and sustainable supply chain strategies will evolve from the idea phase to becoming key business requirements for all companies.
Whether you are a retailer, a brand or a supplier to a brand, adding value is going to be very important if you want to charge a few extra pence. While ‘extra special’, ‘finest’ and ‘luxury’ ranges justify the cost through increased quality of a product, consumers are also becoming accustomed to a higher quality of service. Click and collect, same day delivery and evening delivery are fast becoming the norm. As the millennials move out from their parents place and make homes for themselves, supply chain functions will need to be quicker and more streamlined than ever to compete.
The Internet of Things (IoT)
The IoT is a relatively new subject and surprisingly few companies are engaged in how this technology can benefit them - the same was probably said about the internet 20 years ago. The abilities of the Internet of Things within business are endless, and the winners and losers will be determined by the way companies use this technology. The first attempt to implement this type of tech appears to be Amazon, with interactive replenishment buttons for everything, from coffee pods to washing powder, but this is basic in comparison to its capability.
Imagine a world where your fridge communicates with your car to notify you that you are out of milk as you are nearing a shop that sells it. Then imagine an entire kitchen that plans for demand and replenishes everything you use automatically, without needing to consult anyone. Whether you are a retailer or brand this could impact your supply chain function in a number of ways. Just like the introduction of EPOS systems and ERP/MRP systems improved the automation of processes resulting in increased efficiency, understanding this technology and the data it can provide will be a game changer.
Nobody expects the acquisition
M&A’s are on the rise and totalled a record £2.7tn in 2015. Any weakness shown in the face of investors could be seen as an opportunity for a competitor. During uncertain times, businesses that ride it out and don’t invest in themselves are very quickly overtaken by the competition. Continuous improvement, lean methodology, innovation and a dynamic approach to a changing market will be more important than ever moving forward.
Building a strong team
Moving forward, developing a team of skilled professionals with the necessary abilities and experience will be key to ensuring a dynamic and adaptable organisation.
Securing top talent can be challenging, to acquire the best professionals for your team follow these key tips for recruiting in FMCG.
Tips for employers recruiting in the current market
Open up your industry requirements. If sector experience is necessary, ask yourself why and look for synergy in other sectors.
Before recruiting, factor in a relocation allowance and a budget for advertising. You may also want to plan for an additional salary if the candidate receives a counter-offer. Recruitment might seem expensive but it is not as expensive as employing the wrong person.
Interviewing is a two-way process. Top quality professionals are rare, if you like a candidate, act quickly. Sell the benefits of joining your business and allow time to address any questions they may have.
If you are unsure about someone, be respectful and provide them with constructive feedback. Remember, you may have to revisit them as a potential candidate in the future.
Discussions around any of the above topics are very much welcomed, so for any further information or to arrange a meeting, please get in touch today.
T: +44 1179 065523