Executive Update

2012 Executive Conference Sessions Highlights

The Executive Conference program was carefully crafted to highlight emerging consumer trends within the CPG industry, bringing together though-leaders and industry experts to examine some of the most critical issues impacting consumer product makers today and in the future. Please find below a brief sampling of the Strategic, Leadership and "Coffee With..." Sessions featured at this year's conference.

 

Deterrence and Detection: Aggressive Anti-Counterfeiting Strategies
to Protect the Supply Chain

During this session, industry experts Steve Perlowski, vice president of industry affairs and member relations for the National Association of Chain Drug Stores; Rana Saoud, special agent and national program manager of Global Outreach and Training Unit for the National IPR Coordination Center, US Homeland Security; and DeeJay Smith, brand protection manager for The Procter & Gamble Company discussed deterrence and detection of fraud, and what effect it had on the industry as a whole.

According to the panelists, fraud is becoming a huge issue in the United States. In just the last year, $200 billion worth of counterfeit goods entered our US supply chain, leading to many consumer risks.

One of the concerns of counterfeit products is that the replicas are too difficult to tell apart from the actual product. “We’re not just talking counterfeit purses, handbags and glasses. It can be anything from guns to pharmaceuticals to car parts and more,” said Perlowski. “The counterfeiting operations we are dealing with are intelligent, they’re not amateurs.” They are creating products that are so similar to the real thing, that retailers and consumers can’t tell the difference.  Smith added that “these products don’t have the same quality of standards, and can often be hazardous to consumers.”

According to Special Agent Saoud,counterfeiting, or intellectual property theft, is on the rise, and the leading cause - the internet. “People are going online to purchase goods they believe are legitimate. But because of the ease of the internet, there’s so much counterfeit product in the supply chain now it’s difficult to seize these products.”

To help battle this issue, the government is reaching out to the industry for help. “We’re trying to open up the lines of communication, between industry, associations and the US government,” explained Saoud. “We rely on the industry to send us a lot of leads, and sometimes to help with basic investigations.”

So what can manufacturers do to help prevent counterfeit products? “Secure our supply chain, have an active brand protection program and encourage or trading partners to report seemingly ridiculous offers for products to the IPR center for further investigation,” suggested Smith.

Perlowski also added a piece of advice to consumers about avoiding counterfeit products – “if a deal seems too good to be true, it probably is.”

 

Win-Win-Win Collaboration: Sam’s Club’s Joint Business Planning

During this session, a panel of retailers and manufacturers discussed joint business planning (JBP) that allows the consumer, manufacturer and retailer to all win.  This panel featured Charles Redfield, executive vice president of merchandising for Sam’s Club, as well askey trading partners Dave Dudick, senior vice president of General Mills; Melvin Landis, chief retail sales officer with Coca-Cola Refreshments; and Sean Fallman, president of Georgia-Pacific’s North American consumer business.

"JBP is a great way of developing trust," explained Redfield. “It’s about building relationships and building alignment. The most important part is focusing on who we’re serving externally.”

According to Redfield, the four key steps to successful JBP are as follows:

  1. Trust
  2. Collaboration
  3. Strategic Alignment
  4. Sustainable, profitable growth for both parties

“Honest dialogue is a key part of JBP, which can be tough. It’s not about being best friends, it takes a lot of difficult conversations for both parties, and it’s frustrating, but you have to be mature and once you get over that part of the honest dialogue, the ease starts setting in and you start having useful conversations.”

All panelists agreed that it should always stem from the demand of the consumer. Landis of Coca-Cola said that it’s important to start with the consumer, align with what they say, and work backwards to increase your ROI.

Dudick offered an example of their Cheerios product being sold at Sam’s Club. They were selling a large box of cheerios, but found that consumers said it wasn’t pantry-friendly because it was too large, and it would often go stale before it could all be eaten. So General Mills switched from one large box to two smaller boxes sold together, and not only was it now pantry-friendly and longer-lasting, it was also more sustainable because they were able to eliminate a lot of head room in the packaging. Being open-minded and able to do business in a different way ended up a huge success for the company.

The panel went on to explain how JBP requires a high level of commitment from the entire organization, beginning with the senior level, because it is a top down process designed to deliver long-term growth. “There is senior level commitment needed, making the junior level people comfortable with that environment,” said Fallman. “It takes time and it’s an investment in both the human side of things and the business side of things, and it takes commitment.”

“There is the philosophy of collaboration, throughout the whole company. It delivers results and that is ultimately why we’re here,” added Redfield.

 

The e-Commerce End Game: How to Play Offense and Defense

With e-commerce on the rise, retailers are beginning to reassess their supply chains and business models, and manufacturers are also feeling the pressure to respond as digital continues to drive growth in channels where some manufacturers barely play today.  

Moderator Jean-Marc Bellaiche, senior partner and managing director of The Boston Consulting Groupdiscussed what has caused the increase in e-commerce, including new and innovative technologies, more connected people, places and objects, the explosion of social networks, and the blurring of online and offline purchases. “E-commerce allows the breadth and depth of product offerings to be much higher,” said Bellaiche.

“There are three reasons consumers go online: information, education and inspiration," said Alex Tosolini, vice president, global eBusiness for The Procter & Gamble Company."Now it's all about brand-building in a digital world, and the more we understand the consumer journey, the more we are able to fulfill their need."

As food, grocery and low-ticket items move online, growth platforms for 3rd party sellers accelerate, and suppliers now experiment with their own e-commerce channels, panelists agreed that this is something that cannot be ignored.

“This is the intersection where companies need to react. CPG companies need to decide how they are going to execute in that digital space to ensure that they are in the consideration space,” said Richard Tarrant,chief executive officer of MyWebGrocer. “We advocate this ecosystem of CPG companies and retailers working together in the digital space.”

Although the landscape will continue to change, e-commerce will not be the sole retail channel any time soon. “At the end of the day, the grocery consumer is after convenience,” said Tarrant. “The good news for our industry is that the most convenient spot is still the grocery store that they shop at.”

Also participating on this panel was Jeff Gell, senior partner and managing director at The Boston Consulting Group and Tina Sharkey, former chairman and global president, BabyCenter LLC for Johnson & Johnson.

 

CEO Priorities in a Volatile World

In this session, Steve Brown, general manager of the consumer products industry for IBM and Carrie Jones-Barber, chief executive officer of Dawn Food Products, Inc. shared insights from a study of over 1700 CEO’s and addressed how creativity has emerged as a leading quality for dealing with change and uncertainty.

Sharing insights from the 2012 Global CEO study, Brown discussed the new environment for CEO’s, how they are more focused on values, collaboration and mission than ever before, and how collaboration, communication and creativity are seen as key success factors for employees.

Below are some suggested recommendations based off of outperforming companies and their priorities.

1. Replace rulebooks with shared beliefs: In open organizations, rules and regulations cannot keep up with the multiplicity of situations – employees must buy into a set of shared beliefs to inform everyday decision making. Do this by confronting cultural reality; allowing your employees to focus on the customerby limiting internal meetings to once per week; and re-calibrating controls by growing employees outside their area of expertise.

2. Build future-proof employees: Organizations need employees who are equipped to adapt – those who are collaborative, communicative, creative and flexible. Do this by creating unconventional teams; concentrate on experiential learning by broadening the range of situations and experiences that employees are exposed to in their normal work; and empowering high-value employee networks by encouraging employees to develop a diverse and extensive network of contacts.

3. Provide the means to collaborate at scale: As organizations globalize and the boundaries between functions blur, organizations need more extensive, sophisticated methods of collaborating. Do this by pursuing social collaboration technologies; devising incentives that foster collaboration; and re-imagining the employee “suggestion box” by using social media, open dialogue and collective construction of solutions.