KANSAS CITY — Numerous signs suggest that the bottlenecks that have wreaked havoc on the food and beverage supply chain for the past two years are easing. The lessening supply chain disruptions is allowing manufacturers to shift much of their focus away from keeping production lines running and customer shelves filled, bringing routine and normalcy back to day-to-day operations.
A series of presentations by executives with companies like General Mills, the Coca-Cola Co. and McCormick & Co. at the Deutsche Bank dbAccess Global Consumer Conference in Paris in early June highlight how the businesses have been able to shift their attention away from a crisis-management mentality to executing against specific strategies to improve efficiencies, margins, distribution and innovation.
At General Mills, for example, executives are shifting their focus back to improving productivity, or, as the company calls it, holistic margin management.
“Over the last few years, we have been spending most of our time just trying to get product to market,” said Jefferey L. Harmening, chief executive officer, during a presentation. “And, so, our productivity efforts have lagged with what we would normally do. Usually, we’re kind of industry-leading in productivity, and we look to get back to that, which I think is what should be a welcome byproduct of getting supply chains back to normal.”
At the Coca-Cola Co., efforts are underway to improve revenue growth management (RGM). It always has been a priority for the company, but the COVID-19 pandemic and the supply chain constraints that followed drew attention and resources away from the traditional blocking and tackling of RGM.
A key for the beverage company has always been understanding consumers and influencing them to drive purchase and purchase frequency. The company has been one of the most effective at marketing, meeting consumer needs through price/pack architecture and innovation. Now the company is seeking to upgrade its efforts.
“The other piece of the RGM equation which gives me confidence that we can still do a lot more is the world of analytics and all that’s available nowadays and even more brand or — being more specific on patterns that are at play in the marketplace,” said John Murphy, president and chief financial officer at Coca-Cola. “And I think we’re in the early stages of really fully leveraging that.”
Flavor and spice manufacturer McCormick & Co. is focusing on category management. Prior to the pandemic, the company zeroed in on supermarket aisle reinvention — partnering with retailers to ensure it was easy for shoppers to find the flavors and spices on their shopping lists. The effort did not cease during the pandemic and afterward but has gained momentum as the company has begun rolling out a line of spices in new packaging specifically designed to improve product performance.
What General Mills, Coca-Cola and McCormick are doing is not new or unique in the business world. These are tried and true strategies used to improve performance and margins. What is promising is these initiatives have moved up the priority lists of management to be primary goals rather than secondary to overcoming the distractions of the past few years.
It’s a sign of a return to business as usual, and it is welcome.
