Silafrica Kenya Talks Navigating Changes in the FMCG Value-Creation Model Through Packaging

The fast-moving consumer goods (FMCG) industry is facing a number of changes in the value-creation model that will affect how companies operate and how they create value for consumers. These changes include:

1. Excellence in mass-market product innovation and brand building, including premiumization. Consumers are increasingly looking for higher-quality products that offer more value for their money. Companies will need to invest in product development and marketing to create premium products that stand out in the market. High quality and attractive packaging to go along with high quality product is key as ultimately packaging is the first point of contact with the customer.

2. Advantaged consumer access via mass-trade relationships. As e-commerce continues to grow, companies will need to build strong relationships with major retailers and distributors to reach consumers. This will require companies to have a deep understanding of the retail landscape and be able to offer products and services that meet the needs of specific retailers. In most cases, high shelf-appeal is imperative as the idea is to get as many eyeballs on the product as possible and consequently be ‘fast moving’ from the shelves.

3. Developing-market category creation alongside rising incomes. As incomes rise in developing markets, consumers will be looking for more variety and higher-quality products. Companies will need to be able to create new product categories that meet the needs of these consumers and be able to reach them through effective distribution channels. Being able to increase your product range will be influenced by the cost of your inputs and processes and with packaging being one of them, it is important to have a partnership with a packaging manufacturer that is both affordable and allows for flexibility to change from different labels communicating different products within short lead times.

4. Operating model that drives consistent execution and achieves cost reduction. Companies will need to be able to operate efficiently and effectively to meet the demands of the market. This will require companies to have a strong focus on cost reduction and to be able to consistently execute their strategies. Affordable inputs enable cost reduction.

5. Mergers & Acquisitions to consolidate markets and enable organic growth post-acquisition. Mergers and acquisitions will continue to be an important way for companies to gain market share and create value for consumers. Companies will need to be able to identify and pursue strategic acquisitions that will enable them to grow and create value for consumers.

One of the key ways that companies can navigate these changes in the value-creation model is through the use of the right packaging. The right packaging can help companies to visibly and attractively communicate premium products, reach consumers through mass-trade relationships, allow for flexibility and affordability in creation of new product categories, and create value through strategic acquisitions influenced by brand visibility. Moreover, using eco-friendly packaging can help companies appeal to conscious consumers and set themselves apart from competitors.

In conclusion, the fast-moving consumer goods industry is facing a number of changes in the value-creation model that will affect how companies operate and how they create value for consumers. Companies will need to be able to navigate these changes to be successful. One of the key ways to do this is through the use of the right packaging.

ABOUT SILAFRICA: Silafrica has been the leading manufacturer and supplier of the most innovative and sustainable rigid plastic packaging solutions for beverage, food, personal and home care, and chemicals in Kenya and East Africa since 1967.

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