Why CEOs Are Having Hard Conversations
Each year, The Consumer Goods Forum (CGF) hosts a Global Summit that draws retail and CPG executives together to build the future through shared commitments. The 2024 event recently wrapped in Chicago with participating leaders agreeing on and emphasizing the importance of candor and immediacy.
That tone was set in the opening remarks by CGF co-chairs Frans Muller, president and CEO of Ahold Delhaize, and Dirk Van de Put, chairman and CEO of Mondelēz International. They recapped progress that the group and its members have made over five high-priority Acceleration Areas, including deforestation and conversion-free supply chains, Golden Design Rules for packaging, employee well-being, human rights due diligence in own operations and reductions in emissions. In addition, they challenged executives to think about and engage in “elephant in the room” topics that may be uncomfortable or unknown but must be broached.
“There has been great momentum in Acceleration Areas, but we know the world is also turning quite fast and we all have a lot of challenges in society and in economics as well. So, most likely, we have to speed up, and that’s why our ambition — Dirk and myself together with CEOs — is to accelerate impact and deepen the focus. The solutions are only achievable when we collaborate,” Muller told the group of 1,100 delegates.
Muller and Van de Put spoke in more detail during an interview with Progressive Grocer on the third and final day of the event, noting that the call to collaborative action was well received and that the overriding message of heeding the needs and wants of younger consumers also carried through the Global Summit.
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Van de Put cited one popular panel discussion, in which Gen Z consumers voiced their opinions — and frankly, their concerns — about the state of the consumables sector. “These are things that need to be said and discussed. If they don’t say it here, they will say it somewhere,” he told PG, adding that transparencies shared in the overall Summit will help speed necessary change. “This will require a lot of work, and we need to stay at it, but it’s important that everyone starts to take action.”
Muller added that retailers and manufacturers recognize imperatives like plastic and food waste reduction, health and wellness, human rights, net zero and Global Food Safety Initiative progress even as they are navigating their business through continual changes and obstacles. “How are we going to do it when resources are more shallow? But I think people understand more and more that a sustainable company and a profitable company can go hand in hand — you can combine both and you can do this,” he remarked.
Looking back over their past year as co-chairs, Muller and Van de Put said they are heartened by the work of the nine CGF Coalitions. Van de Put, for his part, pointed to the 34 members representing 10% of global plastic packaging consumption who are committed to reducing waste by signing up for at least one of the nine Golden Design Rules to make packaging more recyclable.
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There have been some eye-opening moments as well. “On the Net Zero topic, not every member is equally aware of what needs to be done there, so the intention is to harmonize that,” Muller reported.
The aforementioned session with vocal Gen Z consumers was also enlightening. “One of the most important things for your people is, ‘What kind of purpose do you have?’ It’s about what you do for your consumers, your associates and the planet,” Van de Put asserted, adding that such mindsets are drivers for young employees and young buyers alike.
Muller agreed, “Forty-three percent of our employees are Gen Z,” he pointed out. “These are voices we need to understand and understand what we can do as companies.”
To the co-chairs’ point, over the course of the Global Summit, retail and CPG leaders learned from one another and engaged in open conversations in which they discussed the various elephants in the room.
Below are some key quotes from CGF members and Global Summit speakers:
“You have to find a way of making yourself relevant to the generations in the media form they are consuming. That’s always been true, but you have to be relevant and meet them where they are. Having said that, there is also a strong undercurrent of live experiences, as the consumption and the ecosystem of digital becomes more murky or remains murky – then there is actually the attractiveness of live events and physical world experiences. That's a great place.”—James Quincey, Chairman and CEO, The Coca-Cola Co.
“Walmart is a very purpose-driven company – we are always looking to help people save money. I’ve seen that resonate, whether you are in a tough or buoyant economy – people want value. Also, we still see the emergence of private brands and what we’ve established is that it’s not trading down. We just launched bettergoods, and we are giving consumers the ability to build a basket that allows them to stay in the budget they have and fill in gaps with private brands.”—Kathryn McLay, President and CEO, Walmart International
“I think for us, what we need to do as companies, is to innovate with knowledge and increase the knowledge that we have on sustainability. Products have to be functionally superior, but at the same time address one of those sustainability priorities – that is where you can have a big impact as a company. For example, we recently launched a new laundry detergent called Wonder Wash, which is for short cycle washing.”—Hein Schumacher, CEO, Unilever
“My callout is to work together to convince consumers to make more sustainable choices as regards to plastic. One of my favorite sayings is that ‘Vision without execution is hallucination' and I think in all these topics we are really in the execution phase, and normally in this room we're pretty good at executing. So it's time to act.”—Alexis Perakis-Valat, President, Consumer Products Division, L'Oréal
“The global plastic treaty is a massive opportunity. We must not underestimate what this is. This is about building regulation that is better for business – it’s about getting it right.”—Dame Ellen MacArthur, Founder and Chair of Trustees, The Ellen MacArthur Foundation
“If you are a retailer, you have to ask manufacturers to deliver against these standards. The more retailers who ask and the more consistent the effort, the easier it will be. Get to know and understand the Golden Design Rules and how to get on board, because it is fast becoming the standard for package design.”—Galen Weston, Chairman, Loblaw Cos. Ltd.
“There’s no better way to change nuanced growth within than (by) using a retail media network to better target the audience you are trying to convert.”—John S. Phillips, SVP, Customer Supply Chain and Go-to-Market, PepsiCo.
“By 2023, 75% of new consumers will come from emerging markets. Young consumers in Asia and the Middle East are 1.5-2 times more likely to trade up versus their western peers.“—Sajal Kohli, Senior Partner, McKinsey
"What’s going to really game-change the future of AI or generative AI is the quality of your data, not the amount of compute. The data that you have, the ability to understand consumers, the judgement, in other words, will not be commoditized. That will be the special sauce for all of us."—Tony Xu, CEO, DoorDash
