The world’s biggest companies joined forces (part 2)

The Consumer Goods Forum (CGF) unites 400 leading retailers, manufacturers and service providers and in the previous issue of Trade magazine we started discussing their 70-page report, Future Value Chain 2020. This time we deal with the details of the global root trends and with the possible scenario for the 2020s if the goals are reached. The report’s first message emphasises the crucial importance of cooperation. It states that the scarcity of natural resources and stricter international regulation will result in drastic change in logistics and supply chain systems. Rapid development in information technology used by customers will lead to a new way of reaching consumers and capturing their attention. The project defined four strategic goals that are relevant on both local and global level. Sustainability is a key issue – the economies of China, India and Brazil are growing so fast that the supply and distribution of resources is becoming a great challenge. Consumers start to understand that their decisions shape the future of the Earth and companies are under pressure to take more responsibility and to do more for society than it is required by law. The level of consumer confidence in products, brands, retail and manufacturing will measure success in the future. If shoppers see that all actors in the industry act jointly to reduce carbon dioxide emission, they will have more confidence in the industry and in individual retailers and manufacturers. This of course does not mean that competition will be over; what is more, innovative solutions will constitute a big advantage for a brand or a chain. More transparency in the sector would also increase consumer confidence. Logistics should be made more human- and environmentally friendly. Cooperation and information flow across the whole value chain will occur; distribution and logistics will not be competitive factors any more but a collective basis for providing services, on which different actors can rely on for differentiating themselves. Reaching the new technology-using consumer and getting a message across will be an urgent task for the industry. The old limitations of time and place will not apply any more and consumers will become even better informed and more conscious. It is good news that the same technological innovations will be available to the industry as well, therefore consumers and shoppers can be involved personally in processes – communication will be made more interactive and it will be possible to increase consumer loyalty. Several trends’ cross-influence will put the well-being of people in the limelight. Transparency and traceability will have to be improved for the sake of better food security. A standard product withdrawal system will have to be established so that obsolete products can be withdrawn from circulation in a rapid and uniform way. Cooperation with consumers will set out directions in brand innovation. Well-being will not only mean eating healthy but also better personal hygiene and physical condition. New business models, dialogue and cooperation will lead to developing practical solutions. Results will be achieved by governments, organisations, industrial actors, pharmaceutical companies and people working together, following the ideology of ‘better lives through better business’.