How CPG Companies Can Use AI to Unlock Growth

How CPG Companies Can Use AI to Unlock Growth

How CPG Companies Can Use AI to Unlock Growth

Aug 30, 2023

Aug 30, 2023

Consumer packaged goods (CPG) companies operate in a landscape of rapidly evolving and fluctuating consumer demand. Meanwhile, agile competitors threaten market share through digital savviness and extreme consumer focus. Legacy CPGs must adapt quickly to drive growth and remain competitive.

The key opportunity is thoughtfully leveraging artificial intelligence (AI) to enhance institutional knowledge, collaboration, and strategic foresight across the enterprise. By combining generative AI (Gen AI) capabilities with human strengths, CPGs can become agile learning networks that respond to market changes through shared intelligence. In fact, AI in the CPG industry can increase productivity by 1.2-2.0% of annual revenues, which amounts to an additional $400-660 billion per year.

Increasing Competition From SMB Disruptors

In the CPG industry, your primary focus is on driving consistent growth for your company. However, even the largest consumer goods companies are not immune to disruption from nimble small and midsize businesses (SMBs).

In the past, large, established CPG companies had unassailable advantages of scale, distribution, brand recognition, and retailer relationships. But today, size does not guarantee continued success. SMBs are disrupting legacy CPG brands more than ever by leveraging consumer demand and social platforms.

How do these smaller challenger brands achieve such rapid growth? They intimately understand today's consumers, who are:

  • Highly informed: Today's consumers extensively research products online before making purchases.

  • Price-sensitive: They compare prices across retailers and channels to find the best deals before buying.

  • Socially connected: Social media engagement, influencer recommendations, and online ratings/reviews heavily influence their purchasing decisions. Viral product reviews can make or break CPG products.

  • Seeking instant gratification: For today's consumers, fast shipping and in-store pickup are now the norm.

  • Skeptical of branding: They are less influenced by traditional advertising and more swayed by authentic user-generated content.

  • Trusting of the crowd: They depend more on crowdsourced ratings and reviews than on brand claims.

In contrast, many traditional CPG enterprises still operate with siloed functions, rigid annual planning processes, bureaucratic hierarchies, generalized messaging, and a general consumer disconnect. This operational model fundamentally lacks alignment with the needs of today's consumers.

To adapt and compete, CPG companies must continually discover what consumers want using data and human insights. That's where Gen AI comes in.

Human Experience Combined With AI Yields Strategic Foresight

As gen AI becomes more accessible, it presents a major opportunity for CPG companies. But the winning strategy is not just implementing AI tools. It's thoughtfully combining AI with your sales teams' accumulated knowledge and expertise.

Companies focusing narrowly on back-office automation and efficiency gains without integrating human insights across the organization will likely struggle. They will miss the full potential of AI.

Instead, reimagine your company as an agile, insights-sharing network. Use AI to rapidly disseminate market learning across brands, regions, and functions — anywhere it can add value.

For example, you can adapt pricing based on local consumer sentiment by sharing up-to-date cost and pricing data faster and more accurately with your global teams. This real-time knowledge sharing via AI systems gives you a competitive advantage.

The key is combining AI's analytical horsepower with human judgment and experience. It augments strategic foresight across the enterprise.

Combining AI and Human Insights for Impact

When exploring AI, a common question from CPG leaders is, "Where do we start?" The key is viewing AI as a collaborative tool to enhance human capabilities, not replace them. Think of it like a very intelligent intern you need to train.

To start, identify an existing slow and inefficient process that relies on significant human analysis. It's low-hanging fruit for AI augmentation.  Utilize powerful tools like see6 AI to leverage the power of AI and craft customer-centric sales narratives.

Next, audit the skills of your current workforce. Look for gaps an AI assistant could fill, like analyzing huge datasets or personalizing millions of customer interactions. Monitor AI closely at first and have people work alongside it to correct mistakes and solidify guardrails. Like a new intern, AI requires careful coaching. Establish clear metrics tied to business goals early and watch for unintended consequences. AI should enhance outcomes you already measure.

While challenging, embracing AI's collaborative potential can transform CPG companies into responsive, insights-driven organizations. As the consumer landscape becomes more complex, combining institutional knowledge with AI gives you an advantage in navigating complexity.

Building an AI-Driven Culture in CPG

Investing heavily in data infrastructure, model development, and AI talent is necessary but insufficient. To extract value, insights from AI systems must meaningfully inform the daily decisions made by cross-functional teams across the organization. Achieving this pervasive usage is the ultimate objective for CPG companies seeking to align with consumer demand.

It requires changing mindsets across the organization to integrate experiential knowledge with data and AI-driven analytics. Empowering collaboration and real-time insight sharing will help you transform into an agile, insights-driven enterprise.

While challenging, dissolving rigid functional silos represents an enormous opportunity for CPG companies to build a responsive consumer-centric culture augmented by AI. Rather than a technical hurdle, this is primarily an organizational and leadership challenge that requires ongoing coaching, training, and role modeling.

True success comes from connecting every level of your company with data and insights — from the C-Suite setting strategy to sales and customer teams interacting daily with consumers. It's largely a question of transforming processes, communication norms, and culture rather than deploying technology alone.

Embrace AI for Sustained Growth and Competitiveness

CPG companies that embrace AI's potential to enhance human collaboration and insights will achieve sustained growth even as the industry evolves. The key is taking an insights-driven approach that thoughtfully blends institutional knowledge, external data, and AI models to empower more informed, contextual decisions tuned to shifting consumer sentiment. The future winners in the CPG space will be enterprises that build organizational agility by integrating AI with collaborative human ingenuity, empathy, and expertise.

see6, a SaaS sales enablement platform, offers an innovative AI tool tailored to the CPG industry. This enterprise-ready solution empowers sales teams to streamline their efforts, create more impactful sales pitches, and ultimately drive better results. 

Contact us today to learn more. Combine your teams' expertise with cutting-edge generative AI to unlock new growth opportunities.