Turning threats into opportunities

The arrival of the COVID-19 pandemic suddenly and completely reshaped the consumer landscape at the start of 2020. Many saw their expectations of growth replaced by a struggle for survival. While others had to ramp up production to meet never-before-seen spikes in consumer demand. Keeping up with the consumer- their needs, behaviours and habits, is constantly presenting companies with new possibilities to seize and challenges to adapt to.

The brands which identify and pursue the true value exchange between the offering and their consumers, will be the ones that succeed in turning threats into opportunities.

We partnered with Mars Pet Nutrition for our recent Fluxx Exchange Event, where we explored some of the existential threats facing the packaged goods industry. Here are the key takeaways from our discussions, with inputs from participants ranging from the FMCG industry, consultancies to innovation experts and academia.

• The ‘Pandemic-friendly’ consumer is here to stay. Brands are tapping into the new behaviours and habits that have been embedded during the pandemic. People are developing and practicing new skills that allow them to cut non-compulsory costs. The packaged dining-in experience, for example, offered by many restaurants is one that households will be enjoying even once restrictions are lifted.
• Even with good intentions, consumers won’t pay a big premium for green. 52% of US consumers said they would buy more products with sustainable packaging if those products didn’t cost more than conventionally packaged ones. But they might be willing to do more for sustainability, with upcycling and repurposing products and packaging. Brands have an opportunity to scale those behaviours.
• But they’ll ditch your brand for a greener one if they don’t have to change their lifestyle. Brands are experts in creating consumer desire and directing consumer choice. If they can do it for unsustainable products, they can do it for alternatives; the view in the room was that brands have a moral obligation to deploy their resources to drive sustainability. And there’s loads of examples of businesses that put sustainability at the heart of successful business models; Ben & Jerrys, Unilever, Brewdog and Lush to name a few.

• Sustainable packaging is part of the answer, so might be mushrooms. Brands are experimenting with new materials to package their goods. Since 2019, IKEA has been using compostable mushroom based packaging for its products, and other brands are experimenting with algae and seaweed packaging too.
• Activist investors can and should play a key role in tackling climate change — but we have power too. Larry Fink, Blackrock CEO said “the biggest crises, whether medical or environmental, demand a global and ambitious response”. With more than 75% of the largest investors being pension and insurance funds — of which we as consumers are shareholders and stakeholders — means in theory we have the responsibility to ask questions and demand transparent reporting.
• “The bathroom is the future of health”. People are spending more time at home, and are more aware of their immediate surroundings. Consumers are forging connections with things they wouldn’t have otherwise thought to- even their toilets! — with products like Shine for automated toilet cleaning. Connections were also forged where Shine, a smaller brand was able to leverage a brand like Vanish to bring a great new experience to consumers.
• We want emotional, social and identity-reinforcing experiences to come with the brands we buy. Emerging technologies, heightened importance of ethical and ecological impacts, and focus on wellbeing all drive demand for experiences that go beyond functional one-time consumption. Gatorade went from a sports beverage to a sport nutrition company by expanding their business model to include customisable hydration based on each athletes’ unique physiological needs; that’s a much deeper and longer-lasting experience than any single consumption drink can offer.

• Extending beyond the product to experiences creates more opportunities for brands to create small movements of change in the world around us. Hellmanns partnered with Nintendo and created an island in the popular game ‘Animal Crossing’ where players could convert virtual food waste into real food for people in need. Island visitors were given a 15 min slot to drop off their spoiled virtual turnips and in return, the condiment brand pledged donations to Second Harvest, Canada’s largest food rescue charity.

Ultimately, it comes down to authenticity and brand purpose. Sustainability without true intent can’t and won’t stand the test of time, and as we move beyond the product towards experiences; there’s a real potential for the super power brands to help us make an impact for a brighter, more sustainable future.

Join us at our next Exchange on 12 May, where we’re talking about The how and why of Net Zero: How organisations are creating movements for change.

Jassi leads Marketing at Fluxx. For more details on our company, check out these useful links, or get in touch at jassi@fluxx.uk.com. Want to talk more about challenges and opportunities facing FMCGs? Get in touch with our consumer goods expert Jenn Torry jenn.torry@Fluxx.uk.com.