What strategies are companies in Consumer Staples using to win
Explore Consumer Staples companies
In Consumer Staples, the following strategies are implemented by companies to win:
1. Evolve the Portfolio Through Continuous Innovation
Winning companies constantly adapt their products to meet changing consumer needs, such as health consciousness, convenience, and new experiences. This ranges from incremental improvements to radical business transformation.
Example: Procter & Gamble: Focuses on category leadership through its "Drive Irresistible Superiority" strategy, which mandates best-in-class performance across product, packaging, and value. An example is their goal to Enhance Product Performance Benchmarking.
Example: PepsiCo: Aims to "Evolve our portfolio to always win the consumer" by broadening its offerings in both food and beverages. This includes initiatives like Advance Positive Choices Innovation (e.g., no-sugar beverages) and Develop Meal Occasion Extensions (e.g., Lay's potato omelets).
Example: Coca-Cola: Concentrates on being a "total beverage company" by expanding into new and healthier categories, such as with its goal to Expand Plant-Based Beverage Offerings.
Example: Philip Morris International: Represents the most extreme version of this strategy with its "Accelerate Smoke-Free Transformation," fundamentally pivoting its entire business model away from combustibles and investing heavily to Develop Innovative Heat-Not-Burn Alternatives.
2. Drive Productivity and Efficiency to Fund Growth
A relentless focus on cost savings and operational excellence is crucial. These savings are not just for margin expansion but are reinvested into innovation, brand building, and other growth initiatives.
Example: Procter & Gamble: Views productivity as fuel for its superiority strategy, with a core goal "Fueled by Productivity" that includes initiatives like Automate Manufacturing Processes and Reduce Overhead Spending.
Example: PepsiCo: Aims to "Improve Productivity and Efficiency" through digitalization and automation, such as by Increasing Automation in Plants and Warehouses and optimizing its fleet networks.
Example: Coca-Cola: Focuses on "Optimize Coca-Cola Ecosystem," improving efficiency through its unique franchise model with goals like Accelerate Bottling Operations Refranchising.
3. Leverage Digital Transformation and Data Analytics
Companies are using technology to get closer to consumers, personalize marketing, and streamline operations.
Example: Procter & Gamble: Leverages "Digital Acumen" with goals like Develop AI-Powered Consumer Insights to personalize product offerings and marketing.
Example: Coca-Cola: Has a dedicated pillar to "Digitalize the Coca-Cola System," which includes using AI for marketing analytics and developing digital tools for retail customers.
Example: PepsiCo: Seeks to "Modernize the company to fuel growth" by using data for competitive advantage, from store-level execution to harmonizing global IT systems.
4. Embed Sustainability as a Core Business Driver
Sustainability has evolved from a corporate responsibility function to a central strategic pillar that builds brand reputation, attracts consumers, and creates a more resilient value chain.
Example: PepsiCo: Leads with its highly branded "pep+ (PepsiCo Positive)" initiative, which transforms the entire business from Expanding Regenerative Agriculture Practices in its supply chain to offering healthier product choices.
Example: Procter & Gamble: Aims to "Balance the Needs of All Stakeholders" by integrating sustainability directly into its business, with goals like Incorporate Sustainability into Innovation to create environmentally responsible products.
Example: Coca-Cola: Focuses on its "License to Operate" by strengthening sustainable practices, such as its initiative to Improve Water Stewardship Initiatives in the communities where it operates.
5. Expand and Optimize Market and Channel Reach
Growth depends on being available wherever the consumer is, which means expanding into new geographic markets and winning in high-growth channels like e-commerce, direct-to-consumer (D2C), and away-from-home venues.
Example: PepsiCo: Explicitly aims to "Expand our availability to reach consumers everywhere," with a focus on scaling its Away From Home Food and Beverage Presence and building its D2C platform capabilities.
Example: Procter & Gamble: Leverages its global reach by tailoring strategies for different market types and exploring new channels with its goal to Explore Direct-to-Consumer Business Models.
Example: Philip Morris International: Is highly focused on market expansion for its new products, with a key objective to Expand IQOS ILUMA Availability into new and existing markets.