WEBVTT 1 00:00:01.943 --> 00:00:04.853 The FMCG sector had been the darling of Wall Street, 2 00:00:05.990 --> 00:00:07.830 for the decade through to 2016 3 00:00:07.830 --> 00:00:10.450 had been the single largest value creating sector 4 00:00:10.450 --> 00:00:11.500 in the whole economy. 5 00:00:12.620 --> 00:00:15.933 But since then the star has fallen, and it's fallen badly. 6 00:00:16.900 --> 00:00:18.560 It's now number seven of ten. 7 00:00:18.560 --> 00:00:20.140 And when you actually dig in, 8 00:00:20.140 --> 00:00:22.540 what you realise is there are some pretty severe pressures 9 00:00:22.540 --> 00:00:24.290 facing the leaders in the industry. 10 00:00:25.940 --> 00:00:28.540 What's caused the sector to collapse to this degree? 11 00:00:29.540 --> 00:00:32.046 And how can FMCG companies turn this around? 12 00:00:32.046 --> 00:00:34.629 (upbeat music) 13 00:00:37.220 --> 00:00:38.360 There's been a mix of factors 14 00:00:38.360 --> 00:00:40.540 that have driven that collapse. 15 00:00:40.540 --> 00:00:42.350 Rising consumer expectations 16 00:00:42.350 --> 00:00:45.380 driven by customization in the B2C space, 17 00:00:45.380 --> 00:00:47.590 increased social impact expectations, 18 00:00:47.590 --> 00:00:50.110 and sensitivity among consumers. 19 00:00:50.110 --> 00:00:52.320 But most substantively for us 20 00:00:52.320 --> 00:00:54.570 is a belief that actually the barriers to scale 21 00:00:54.570 --> 00:00:55.990 at each stage of the value chain 22 00:00:55.990 --> 00:00:57.690 that actually come under pressure. 23 00:00:59.000 --> 00:01:01.250 In manufacturing with co-packers, 24 00:01:01.250 --> 00:01:05.360 in retail with E-com and fragmentation of channels, 25 00:01:05.360 --> 00:01:08.240 and in marketing from a social and digital standpoint. 26 00:01:08.240 --> 00:01:11.580 And each of those things has been exacerbated by COVID-19 27 00:01:11.580 --> 00:01:14.180 and the pressures that that's created on the system. 28 00:01:15.770 --> 00:01:19.160 The question is, what's the solution to this? 29 00:01:19.160 --> 00:01:20.450 And how do they get back on track 30 00:01:20.450 --> 00:01:22.160 to being the leading value creating engine 31 00:01:22.160 --> 00:01:23.160 that they have been? 32 00:01:25.490 --> 00:01:26.990 We think there are five critical things 33 00:01:26.990 --> 00:01:28.960 that are required to do that. 34 00:01:28.960 --> 00:01:30.760 The first of those is to become 35 00:01:30.760 --> 00:01:33.040 an always-on portfolio manager. 36 00:01:33.040 --> 00:01:34.760 That means constantly and aggressively 37 00:01:34.760 --> 00:01:39.210 reshaping the portfolio, both buy-side and sell-side, 38 00:01:39.210 --> 00:01:41.050 taking advantage positions, 39 00:01:41.050 --> 00:01:43.200 exposing yourself to positive growth, 40 00:01:43.200 --> 00:01:45.010 and looking for complimentary positions 41 00:01:45.010 --> 00:01:47.610 that advantage from the scale that you already have. 42 00:01:49.830 --> 00:01:52.060 Number two is reinventing the demand model, 43 00:01:52.060 --> 00:01:55.350 that means deeper levels of demand science capability 44 00:01:55.350 --> 00:01:57.810 to really understand what's driving consumer choice 45 00:01:57.810 --> 00:01:59.780 in the categories you compete in. 46 00:01:59.780 --> 00:02:00.613 And it's secondly 47 00:02:00.613 --> 00:02:02.940 reinventing the consumer engagement model, 48 00:02:02.940 --> 00:02:05.760 both physically and digitally. 49 00:02:05.760 --> 00:02:08.410 More science to compliment the art 50 00:02:08.410 --> 00:02:10.260 of marketing and consumer engagement. 51 00:02:12.090 --> 00:02:13.920 There's a huge opportunity to digitise 52 00:02:13.920 --> 00:02:16.470 the end-to-end capabilities in the business system. 53 00:02:17.310 --> 00:02:18.850 We see so many companies 54 00:02:18.850 --> 00:02:21.510 with a thousand flowers blooming in this area, 55 00:02:21.510 --> 00:02:25.230 but very few that are truly embracing AI at scale. 56 00:02:25.230 --> 00:02:27.590 That is the data, that's the tech, 57 00:02:27.590 --> 00:02:29.410 and that's the people change management 58 00:02:29.410 --> 00:02:31.380 that truly captures the full power 59 00:02:31.380 --> 00:02:34.120 of data and digital in the business system, 60 00:02:34.120 --> 00:02:37.733 across sales, across marketing, across supply chain. 61 00:02:39.380 --> 00:02:41.470 Fourth is the operating model changes. 62 00:02:41.470 --> 00:02:44.030 On the internal side, a chance to re-contemplate 63 00:02:44.030 --> 00:02:46.820 the role of geographies versus central functions, 64 00:02:46.820 --> 00:02:49.120 bringing greater clarity to the roles, 65 00:02:49.120 --> 00:02:52.460 and introducing new agile ways of working across them. 66 00:02:52.460 --> 00:02:56.720 From an external standpoint, embracing the full ecosystem, 67 00:02:56.720 --> 00:02:59.990 and leveraging partners to accelerate innovation 68 00:02:59.990 --> 00:03:02.053 and maximise scale through the system. 69 00:03:03.860 --> 00:03:07.113 Finally, there's an opportunity to inspire with purpose. 70 00:03:08.170 --> 00:03:09.660 Entrepreneurial ventures have actually 71 00:03:09.660 --> 00:03:12.090 outplayed the leaders on this front. 72 00:03:12.090 --> 00:03:15.430 There's a real opportunity to bring unique, believable, 73 00:03:15.430 --> 00:03:18.660 and differentiated propositions to the marketplace 74 00:03:18.660 --> 00:03:21.200 that reflect both the company's history 75 00:03:21.200 --> 00:03:23.070 and its sustainability goals. 76 00:03:23.070 --> 00:03:25.630 We see this as an absolute value imperative 77 00:03:25.630 --> 00:03:27.270 and going to be a key driver of change 78 00:03:27.270 --> 00:03:28.520 in the next decade ahead. 79 00:03:29.770 --> 00:03:32.000 These steps constitute the playbook 80 00:03:32.000 --> 00:03:35.150 for those who aspire to win in the FMCG space 81 00:03:35.150 --> 00:03:37.350 in the roaring twenties ahead, 82 00:03:37.350 --> 00:03:39.780 and in doing so create profound value 83 00:03:39.780 --> 00:03:41.573 for all of their stakeholders. 84 00:03:43.852 --> 00:03:44.685 (music fades)