The current economic crisis opens new windows of opportunity for consumer packaged goods (CPG) manufacturers and retailers, according to Tim Hammonds, president emeritus of the Arlington, Va.-based Food Marketing Institute. In remarks made during the March 25 general session of the Information Resources Inc. (IRI) Reinventing CPG and Retail Summit: Insights to Impact, held in Las Vegas, Hammonds also stressed that “90 percent of life’s victims are volunteers” — and that companies that hunker down in fear instead of reinventing their own futures will be the next victims.

Consumers are on the offense today, he stressed. Today’s crisis is not just financial, it’s a “cultural watershed” that finds consumers frightened and angry. As a result, companies need to find ways to help these consumers cope.

Hammonds also urged manufacturers and retailers to fight to preserve international trade, and to “get connected” to Washington, D.C., and the regulatory process. Companies need to prepare to deal with the new organized labor agenda as well, he said, and the potential effects of such agenda on trade agreements with Colombia and Mexico.

Hammonds outlined several other strategies for success, including:
* Adding Baby-boomer “reluctant retirees” to the payroll, and learning how to use their talents.
* Focusing on sustainability as a means to save money, especially in building new stores.
* Being straight with consumers in terms of products and their health and wellness benefits; obesity is driving gains in health and wellness offerings, but consumers know when manufacturers are trying to trick them.
* Building trust with consumers in relation to food safety. The industry needs to “completely rethink” the recall process, Hammonds said.
* Operating multiple store formats, including smaller-store formats, to meet various shopper needs.
* Finding new ways to help shoppers cope with what he believes will be permanently higher food prices resulting, in part, from corn ethanol, a growing global population and the rise in meat consumption in places such as China.

Although store cleanliness and food quality are still important to consumers, Hammonds said price and location now are more critical. Supercenters, therefore, have gained share at the expense of supermarkets, and private labels — or what Hammonds strongly prefers to call “private brands” — are enjoying strong growth.

Finally, Hammonds told attendees, “It’s not just time to hunker down.” He said now is a great time to “get some passion” — to bring in new people, connect with consumers and focus on how to reinvent their companies.

From the May 26, 2009, Prepared Foods E-dition