Inbound Logistics | January 2022

Consumer Packaged Goods

CONSUMER LOYALTY IS BUILT ON TRUST Most executives say they’re investing significantly to prevent trust erosion on multiple fronts ( see chart ), a Deloitte report says, and it’s not hard to see why: 95% of consumer product companies that have high consumer trust are more resilient. Here are three things consumer product brands should keep in mind when it comes to maintaining trust, the report says: 1. Supply chain issues result in stockouts. Stockouts break the inherent promise of reliable availability and hurt perceptions of competence—not just of retailers but also of brands themselves. 2. Labor shortages reduce production and, in some cases, affect quality and service levels, further harming a brand’s perceived ability to deliver on its promises. Workers who don’t trust a company to create a sense of belonging are also unlikely to accept job offers or stay. 3. Rising prices that increase beyond what consumers view as justified break the promise of a fair deal. The intent and motive of the brand comes into question.

The Sustainability Consortium, a global nonprot focused on transforming the consumer goods industry, formed a new recycling coalition to address small-format packaging, which is commonly used in cosmetics and food supply chains. Small-format packaging consists of items such as beverage bottle caps, lip balms, travel-size shampoo bottles, and other small packaging components that are unrecyclable in most curbside recycling programs due to the size of the screens used for sorting. Consequently, most small-format items end up in landlls or become litter, rather than being repurposed in other products through a circular path. The recycling coalition includes nonprots, universities, and companies such as P&G, Burt’s Bees, and Colgate-Palmolive. Its aim is to improve circularity for small-format packaging of all material types through collective, science- based projects. The coalition will perform a study involving a projection of the scale of collection to estimate economic value, and testing secondary sortation technologies. The ndings will help create tools that can be used globally to create a more circular supply chain for small consumer products. GREEN THINGS COME IN SMALL PACKAGES

EXECUTIVES SAY CONSUMERS LOSE TRUST IN BRANDS WHEN…

Brands are not open and transparent

90%

Brands don't meet ESG expectations

84%

Brands engage in greenwashing

82%

Labor shortages affect quality

79%

Prices increase higher than justified

76%

Last-mile shipping to home is delayed

59%

Products out of stock at preferred retailers

55%

Brands fail to engage in a personalized way

51%

Preferred variety of a product is unavailable

48%

Source: Deloitte 2022 Consumer Products Industry Outlook Survey

LEADING CONSUMER PRODUCT BRANDS WILL WORK TO BUILD TRUST IN THREE PRIMARY WAYS IN 2022: 1. INCREASE TRANSPARENCY

2. EXPAND DIGITAL ENGAGEMENT 3. INVEST IN THE FUTURE OF WORK

—Deloitte

26 Inbound Logistics • January 2022