Resilience in the FMCG Industry is The Key to Grow Past Pandemic


Apr 1, 2022 • 8 min read


resilience-in-the-FMCG-Industry (1)Although it sounds dramatic, "change" has become a cliché these days. The pandemic has led to a fundamental change in shopping behavior.

So, with the "new normal" that doesn't seem completely normal, the FMCG industry must be prepared to meet the needs of today's affected consumers

Redefine The Challenges and Opportunities for FMCG Companies

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Now that we are (hopefully) past the peak of the pandemic, the FMCG companies must begin to identify the new challenges and opportunities that exist and take several steps to deal with them.

1. Weakened purchasing power

It is undeniable that the pandemic has weakened purchasing power. In mid-2020, the Indonesian government also acknowledged that people's purchasing power had weakened due to declining incomes. One of the reasons for this decline in revenue was the result of layoffs and loss of business opportunities for small medium enterprises.

Strategic solutions:

  • Product innovation is a must! With low purchasing power, create economical packaging for your products so that consumers can still afford them.
  • Seeing the tendency of consumers to stay at home, create frozen food innovations or ready-to-eat food for those of you who have an F&B business.
  • Making products with positive values ​​can also be an alternative, seeing that the pandemic has changed the psychological condition of consumers and it is easier to empathize with their surroundings.

2. Tough demand creation

Weakened purchasing power conditions have also made it challenging to generate new demand.  In addition to the increasingly limited places for consumers to reach your products offline, customers are also increasingly calculating when making purchases.

Businesses must be observant to see where consumers are and use that information for marketing reference material.

Strategic solutions:

  • Invest in establishing insightful communication with the right channel where consumers are.
  • Distribute the right product at the right time by integrating offline and online through omni channel platform.
  • Reach your customers wherever they are and give reward for every engagement they have with your brand (online and offline) with omnichannel loyalty platform.
  • In addition, collaborating with influencers or public figures that are relevant to your products can also be an attractive and promising alternative to create demand for your product.

3. The rise of small FMCG companies

“Giant” FMCG companies sometimes forget that today's consumers have started to have specific preferences influenced by many channels, especially social media.

Products sold in bulk have begun to be abandoned by several types of consumers, including millennials and baby boomers. Local products from smaller FMCG brands with sustainable values ​​and positive campaigns relevant to consumers' daily lives are increasingly chosen.

Strategic solutions:

  • Large FMCG companies must be agile in seeing and understanding today's consumers.
  • A typical startup mindset, such as agile, unique, creative, open-minded, and flexible, and using social media appropriately, even giant companies must adapt well.

4. Digital transformation

Nowadays, people are used to spending most of their time at home. They are also starting to invest some money for renovations to make it more comfortable and practical to support many activities, including work from home.

As a result, it will likely be difficult to attract consumers away from their homes, even after COVID-19 is no longer a risk.

Today's consumers prefer to shop online while still looking a chance to go out to the stores. So, if you only depend on your offline supply chain, your brand will likely to suffer in the future.

Strategic solution:

  • Carry out digital transformation and invest the budget in the proper digital marketing to convey messages to your targeted consumers.
  • Optimize the use of social media to approach consumers through topics relevant to their daily lives.
  • Make your online shopping experience at your store as comfortable as offline shopping with excellent service.
  • Use an omnichannel loyalty program to reward your customers whether when they shop offline or online.

5. Redefine sales channel

Although digital transformation has shifted most consumers to make online purchases, they are still consumers who like to shop directly at the stores.

Consumers hope to find the products they are looking for in all sales channels, from grocery stores, traditional markets, supermarkets, and online shopping.

The FMCG industry must be ready to meet these needs with an integrated supply chain or even shorter supply chain to meet customers in the right time and place.

Strategic solution:

  • Build good communication and relationship with distributors and other sales agents, so that your products can reach consumers anywhere.
  • Motivate your distributors with attractive rewards and incentives so that they prioritize your products over competitors. 

6. Changes in consumer's financial situation

In contrast to electronic consumers who are ready to pay more for the quality of a particular brand, FMCG consumers are more sensitive to price. The pandemic has made lower-middle consumers reduce their purchases and become more price sensitive.

By knowing these conditions, you can better understand the impact of a price increase or decrease on your profits and time your planned price changes to take advantage of your customer's situation.

Strategic solutions:

  • The FMCG industry must assess the sensitivity of each product category and potential customers to tailor their marketing and commercial strategies.
  • There is nothing wrong with making economical packaging, such as the size of a sachet, so that consumers can still afford your product.

7. Concerns about sustainability are growing

In today's situation, the existence of green customers are growing. They prefer eco-friendly product with safe packaging to enjoy their favorite products while saving the earth.

These green customers are expected to grow even bigger in the future as Millennials and Gen Z will dominate the world. These two generational individuals are known to have more awareness and concerns with environment and green solutions.

According to Fooddive, 54% of consumers surveyed stating that they consider sustainable packaging when purchasing a product, and 83% of them saying that they are willing to pay more for such eco-friendly packaging.

Strategic solutions:

  • Changing packaging to be more sustainable and environmentally friendly is neither easy nor cheap. Many calculations need to be reanalyzed. However, there are always creative ways to get around this.
  • Making empty packaging refill services can be considered the first step in this sustainability effort. Unilever and Body Shop are two companies that have taken this step by providing refill stations in several areas.

The Takeaway

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Consumers today are forced to change their daily routines significantly due to the pandemic, and this will impact the buying behavior for years to come.

To grow and evolve even in past pandemics, FMCG brands must be willing to accept this "new normal." Brands that do so will be better equipped to meet the changing needs of consumers now and in the future.

Tada can help you to build a loyalty program to incentivize your loyal customers as well as to retain them. We also have an omnichannel loyalty program that will allow you to reward your customers anywhere, anytime, whenever they purchase your product.

Request our free demo now to know more about how our loyalty program can be a good fit to support your business goals.

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Content marketing specialist