The Lisbon MBA Católica|Nova Cycle of Sector Panels – FMCG

Posted by The Lisbon MBA on 15 Apr, 2021 2:10 pm

The impact of the pandemic has not been uniform in the economy and specifically in the FMCG sector. Some companies have been among the hardest hit, suffering massive sales declines, whereas other companies or businesses, or categories within businesses have faced unprecedented spikes in demand. But what we can say is that for all companies and businesses, things have changed, and trends have accelerated.

 

We invited Meghan Davis, General Manager Portugal at Johnson & Johnson, Diogo Pereira Dias, Executive Board Member at Sumol+Compal and Gonçalo Bernardes, Executive Board Member at Unilever to participate in a Sector Panel focused on the challenges that the FMCG industry is currently facing and what is foreseen for the future. Professor Jorge Velosa of the Lisbon MBA Católica|Nova moderated the session.

 

The FMCG market is behaving quite differently in the health, wellness, and hygiene sectors where we saw a spike in sales, and in the HoReCa market, where sales dropped significantly. The fact that we saw an increase in sales in health and wellness, namely in Piz Buin, confirms that “people genuinely need things that make them happy”, says Meghan. On the other hand, demand in sectors that are vital to the beverage industry, like hospitality, schools and tourism was basically inexistent. This trend was even more accentuated in Southern European countries where “socialization happens outside consumers’ homes”, Diogo explained.

 

According to Diogo, the main activities of Sumol+Compal during the pandemic were to protect the people (in factories, in warehouses and the sales force) that had to continue working, to protect the business ensuring that the supply chain worked and adjusting the cost base, and to prepare for the rebound by redefining the strategy (changing the commercial model of Out of Home business by digitalizing the sales channels).

 

For Gonçalo Bernardes the pandemic “did test the resilience of the businesses including people and systems”. For example, Unilever had to support customers in refilling the shelves with specific products because when consumers see an empty shelf, they buy everything they can, and a vicious circle is created. Some categories exploded, and the supply chain had to respond to what people were buying.

 

Looking ahead the challenges start with the consumer. For Diogo “sociologically the biggest change is the home living concept, so the services that are going to be needed at home will increase exponentially”. E-commerce, home delivery, take away and proximity shops will be the trend in shopper behavior that will stay albeit at a lower level. Although these channels already existed, the revolution comes not from the innovation, but from the scale of acceleration. From the consumer perspective, there are five trends that can be identified: consumers will tend to benefit trusted brands; consumers look for brands that help them stay healthy; consumers support the circular economy; consumers look for affordability; and consumers will look for products that are produced at the national level.

 

Meghan brought to the discussion the “building back better” concept: “everything we knew was challenged and we had to look differently at everything so, now that people are coming back to the world, they are definitely elevating the framework of living a healthy life, staying local and shopping local”, Meghan explained. Wellness is replacing health and is all about the holistic view of what the product means to the customer from a values perspective (environment, economy, country, family, etc.). For Meghan, the omnichannel is also important. “Portugal values face to face interactions, but with Covid we had to provide value in a different way, so now J&J works with a mix of truly face to face and technology.”

 

Gonçalo added that “although there is a need for great products, we need to sell the customer an emotion, a purpose behind why we are selling”. For example, in detergents, the claim “dirt is good” reflects the fact that getting dirty is good for kids’ development. The purpose is to let kids get dirty, let kids develop and we are here to help you clean their clothes.

 

The last phase of the debate was about the key competences needed for those who want to pursue a job in FMCG and especially in this new environment.

 

Meghan recommended that as a marketer “one needs to have a consumer/customer obsession so students should build on the fundamentals of core marketing skills”. Other important skills are agile methodologies and impactful communication.

 

For Gonçalo it is also important “to put the consumer at the heart of everything you do, so that you know what the consumer wants even before the customer knows it’. Gonçalo recommended students to find a company with a purpose, a company that they identify with so that “working for that company brings out the best in you”. Other important skills are resilience, agility, and a lifelong learning mindset in order to adapt better to changes.

 

For Diogo it is important to “know about your role, but is very important to be a flexible generalist, to have a general vision of the company”. Another important skill is to stay focused in a world of infinite data. Diogo ended with the recommendation that when thinking about a career change one needs to consider two aspects: how happy one is with the current job and if one is having opportunities for development.

 

The Lisbon MBA Católica|Nova Sector Panel is an initiative by the Career Management Center of the Lisbon MBA Católica|Nova, where students get the opportunity to learn about different industries by getting in-depth understanding of their challenges, trends and the talent they are interested in, as well as to build a professional network with senior executives.