Published on: June 4, 2010The Consumer Goods Forum (CGF) Global Summit - the first under the new organization that was created by the merger of CIES, the Global CEO Forum and the Global Commerce Initiative (GCI) - is scheduled to take place in London on June 23-25...and MNB will be there, as we have been since Content Guy Kevin Coupe covered his first CIES Summit in Stockholm a decade ago.
In anticipation of the London CGF Summit, MNB engaged in an e-interview with Jean-Marc Saubade, CGF’s managing director, in which he discussed the ways in which CGF is evolving and how that will be reflected in the Summit.
What makes the Consumer Goods Forum different from the organisations that it replaces? And what will make this year’s Summit different from past Summits? And future Summits?
Jean-Marc Saubade: The Consumer Goods Forum was founded on the basis of parity. The board is made up of an equal number of retailers and manufacturers. The reason for this is very simple: we want to work together on a number of shared issues and common goals and develop solutions for the whole industry. To do this, both parties need an equal voice. Both former organisations were exclusive operations, driven by one set of stakeholders or another. The Consumer Goods Forum is all-inclusive and outward-looking. I think we will see this inclusivity beginning to be reflected in The Global Summit, but the important point about The Forum is that it is a work in progress. This will be our first Summit since the creation of The Forum. We have had a year to work on our vision for the future. This Summit will be a time to agree this, to set out our agenda and our plan of action. Future Summits will be different again, as we will be reporting back on our progress. I also think the sense of inclusivity will develop as time goes on.
In what way do you believe that sustainability is evolving as a consumer value? Is it different in different parts of the world? And how should retailers and manufacturers be responding to this shift?
Saubade: I would say that, from the consumer point of view, sustainability has evolved already to the point where it is what I call an entry-level requirement. If you want to play in consumer goods, in any market, your products and business practices have to be sustainable and ethical. If they are not, consumers will find you out. If you are lucky they will simply pass you over until you get it right. If you are unlucky they will destroy your reputation within a few seconds online and you may never recover. Further, the window for competitive advantage on sustainability is very small and is closing fast. Today this is a shared responsibility and must be tackled on a shared platform. Manufacturers and retailers have understood the first point a long time ago: I can’t think of any company today that doesn’t have clear goals and targets on sustainability or indeed that hasn’t already made great strides. The creation of The Forum, with a mandate for collaborative action on sustainability as a prime objective, shows they have also understood the second part. What comes next is down to participation.
You have a session on efficient Consumer Response (ECR) on the agendas for the Summit, which I would think would surprise a lot of Americans for whom ECR would seem like a dated initiative. What makes it relevant for 2010...and how has the concept evolved since the halcyon days when it was a state-of-the-art concept?
Saubade: Well, first of all, ECR is still a thriving concept in Europe and Asia, although I agree that the US has favoured other approaches. ECR’s inclusion in The Summit is a good illustration of your earlier point about what is different about The Forum. There is considerable scope for schemes and associations with common goals to align more closely and work together in appropriate areas. The Forum is not a lobby, but we will look to work closely and align ourselves with the FMI and GMA in the States, with AIM and EuroCommerce in Europe, since these associations do work on industry advocacy. We will look to work more closely with JCA in Japan, with CCFA in China and with ECR Latin America, so that we are covering all the regions and learning about those markets. If we want to get something done as an industry then all the cogs in the wheel need to be moving together.
I’m curious about the session featuring London School pupils - what is the mindset behind this session? What are you hoping to achieve? Do you believe that the food industry needs to do a better job of getting in touch with the tastes and priorities of young people who will soon be core customers?
Saubade: Absolutely, yes. The session is about the trends that are reshaping consumer behaviour and business growth. There is no point asking executives in their fifties how kids want to shop, where they go online, what media channels hold their attention and what sorts of products and shopping experiences they are looking for. You go to the source. So, to answer the second part of your question, we are hoping to learn something. I would add, however, that these are not merely the core customers of tomorrow. They are also the core customers of today. Kids may not actually hold the family wallet, but if you think they are not influencing purchasing decisions and brand loyalty from the earliest age then you are missing a trick.
What do you feel is the most controversial issue facing the food industry today? And how should retailers and manufacturers respond to it?
Saubade: I think consumer health and wellness continues to be a very controversial topic, particularly when it comes to obesity. This is partly because the stakeholders are so diverse and partly because their motivations are not always compatible. Central to this controversy, in my view, is the issue of who is responsible. I believe the way for the food industry to respond is to focus on what we can actually do. We can firstly listen to consumers and understand what consumers want and don’t want in their products. Then we can sit down together and work out how to communicate and educate on ingredients, nutrition and diet in a way that consumers can understand, that is science-based and in whose credibility they can trust. If we do this effectively and quickly, we can avoid unnecessary legislation that will only serve to limit consumer choice. The industry has acknowledged the need to collaborate on this via The Forum, by making health & wellness one of our five strategic pillars. But to get moving on this, we need you at the Summit. We need your input and participation. It’s no good if only a few companies or a few countries work on this.
It seems to me - and a lot of my readers - that more than ever there is at least the appearance of a divergence of interests in the food industry. Big companies have less in common than ever with small companies, manufacturers have less in common with retailers, and both people and companies operate within silos of self-interest. How can the CGF help to create a global climate that breaks down some of these barriers, to create commonality when addressing divergent interests and issues?
Saubade: I don’t believe there is a divergence of interests in the food industry or in the consumer goods industry in general. Everyone competes, yes of course. But the focus for everyone is the same: the consumer. This is the same whether you are a one million-dollar manufacturer or a 300 billion-dollar retailer. You keep your eye on the consumer’s needs and the rest will follow. Healthy, vital competition is essential to consumer choice, if that is what you mean by silos of self-interest.
But our job at The Forum is to show how certain problems are in fact a joint concern, and how shared problems require shared solutions. By sharing the burden of building those solutions at The Forum, you also share in the benefits. The benefits of collaboration on these non-competitive issues are more time, cash and resources to compete where it really counts for consumers – on innovation, quality, price, service and experience. There’s no point in retailers and manufacturers competing with each other on food safety, for example. Safe food is the minimum price of entry and your licence to continue doing business with consumers.
To put it another way, if you really want to look at it through the lens of self-interest, if your rival suffers a food safety problem, you have a problem too. Look at what happened with peanuts and spinach. The global spinach market has still not recovered from the E. Coli problem in 2006, which was traced to a single field. Consumers today understand that supply chains are global; a pathogen outbreak in the US will affect consumer confidence in Europe and Asia, no question. That makes competition irrelevant where safe food is concerned. It is much better if we can work together on this. The same is true of sustainability and health & wellness. By the way, both the one million-dollar manufacturer and the 300 billion-dollar retailer are welcome at the Forum and both would have an equal voice. The best way for them to get that voice heard is to join our working groups and take an active role in driving change.
Look for MNB’s exclusive coverage of the 2010 CGF Summit, beginning June 23...with special “Content Guy On The Road” blogs, sponsored by TCC, the global leader in retail marketing programs.
- KC's View: