Promise of vaccine brings calls to not return to business as usual by retailers, CPG manufacturers

By Elizabeth Crawford

- Last updated on GMT

Source: Getty/DisobeyArt
Source: Getty/DisobeyArt

Related tags Consumer Brands Association Albertsons Cos Tyson foods

With a coronavirus vaccine on the horizon, many industry stakeholders are looking forward to gathering over drinks or dinner with business partners they haven’t seen in months, but not to talk shop as they might have before the pandemic.

Rather, some CPG industry leaders say they hope business conversations will continue the way they have evolved during the pandemic: as a more frequent, transparent and cooperative, instead of highly scheduled, transactional and a touch performative.

“There is so much value in looking someone in the eye and sharing a meal together. There’s tremendous value in that. But, since that wasn’t possible [during the past 10 months of the pandemic], being able to adapt to digital platforms and connections have made conversations not require a plane or a [predetermined] frequency. But to be very timely and intimate,”​ Dean Banks, president and CEO of Tyson Foods, told attendees during the Consumer Brands Association’s CPG Speaks webinar Dec. 9

“When there was so much emphasis on face-to-face, you would sometimes stage your communications. But now, it feels very fluid. And the idea of information flow and transmission feels instantaneous and on a just-in-time basis,”​ that opens the door for more creativity and a deeper level of connection, he added.

For example, he noted, during the pandemic Tyson Foods has been able to better innovate and iterate with partners though virtual cuttings and increased touch points that allow for product development that more closely aligns with consumer needs. Likewise, he said, the company has taken a more strategic and less transactional approach with suppliers and shared as much information as possible to try and reach a common incentive.

“If we came into the crisis and had a transactional orientation and were just trying to get to the lowest price or something along those lines,  you’d be leaving so much on the table and be pushed into making perverse decisions”​ that weren’t the best for all players, he said, adding “we didn’t have to thanks to great partners.”

Increased communication transparency and frequency are two things that Vivek Sankaran, president and CEO of Albertsons Companies, agreed he would like to continue to see going forward.

“In the early days of this pandemic, as we went through shortages, we would talk every week … to figure out what we can do differently”​ to get product on the shelf, he said. “There was a higher degree of transparency than ever before – just a general acceptance of the problems and the reality that we’re facing and a sense of speed in solving it. I’m hoping we continue to maintain that kind of relationship”​ without people withholding information because they think it gives them leverage.

Kathy Widmer, company group chairman, North America & Latin American, at Johnson & Johnson Consumer Health echoed these sentiments.

“It really makes you wonder about our rituals and how we operate and sort of how we establish these annual calendars of connections and communications and ways of working that, I think some of it has a rightful place in relationship building, but some of it [doesn't]. This experience shines a light on the small efforts to build trust and relationships really do add up,”​ she said.

Setting mutually beneficial goals

To facilitate streamlined and more timely communication in the future, all three executives agreed that stakeholders must work towards a mutually beneficial goal and, as much as possible, optimize digital information sharing.

Before the pandemic, Widmer noted that negotiations between manufacturers and retailers often were around what works in a retail environment from a margin perspective, which might not align with that of the manufacturer.

“I think we are finding that there are all kinds of opportunities for us to be at the table together and say, what do we initiate here that is accretive on both sides and share the data that we know is available,”​ she said.

Banks agreed, noting he wants to increase digitization of data at Tyson Foods throughout the supply chain so that the company can be more predictive. Ultimately, he would like a delivery truck to arrive just as a customer is preparing another order. But for that to be possible, all sides need to share their capabilities and their observation of consumers at point of sale, and have that data at the ready digitally.

Other trends to watch

Improved communication isn’t the only change during the pandemic that is likely to endure well after a vaccine is widely available. Other consumer behavior changes that likely will persist include a preference for local, sustainable and healthier options as well as for companies improving worker welfare and social justice, the three executives predicted.

Reflecting on the growing preference for local, Widmer said the trend “creates a really interesting opportunity for neighborhood grocery”​ to deliver more convenience and regional options that better meet their consumers needs.

Likewise, she said, the social justice movement that pushed into the mainstream this year is “not a moment in time, but a real movement”​ that companies need to fully address in how they do business and the products they offer. For example, she said Johnson & Johnson is “looking at everything from internal and external and partnerships and products, including working with Black dermatologists … to make sure the products and services and experiences that all our customers have is authentic.”

Banks also noted that consumer preference for healthier and more sustainable options is not going away, but rather likely will become more nuanced as consumers have had more time and incentive during the pandemic to research where the food comes from, how it affects their bodies and how it affects their planet.

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