Worldwide resource shortages, economic stagnation, the labor market crisis, and climate change: These global problems are having an impact on the operation of all companies. Many executives in the consumer packaged goods (CPG) industry are responding by realigning their businesses and, in many cases, emphasizing sustainability as part of their strategy. The SAP Insight Midmarket Senior Executive Priority Study shows up the priorities set by management in this context. SAP collected data from 10,507 executives from companies in 41 markets with annual revenues below US$1 billion.
The most important corporate goals of the respondents are still the traditional ones: increasing annual revenue, closely followed by enhancing operational efficiency – so far, so not surprising. However, the third most important goal – mitigating business risks – already suggests that the experiences from the most recent crises play a key role: 47 percent of the executives stated that they intended to strengthen supply chain dependability.
Sustainability Is Being Recognized as a Sales Driver
One area that the respondents mentioned as a relatively new strategy to boost revenues and increase efficiency is: sustainability. Sustainable activities have joined the traditional tactics, such as introducing new products and services, expanding to new market segments, and improving brand recognition and reputation. Consequently, this is what the five priorities for future revenue growth now look like:
- Introducing new products or services (38%)
- Expanding to new market segments (35%)
- Increasing sustainability in your products and services (35%)
- Improving brand recognition and reputation (34%)
- Increasing sales to existing customers (33%)
Several different stakeholders driving the sustainability trend: governments, investors, activists, and industry associations. Also, there are now more customers than ever who are giving preference to ecologically produced and fairly traded products and services. Sustainability and fair trade have thus become distinguishing features in highly competitive markets.