by Lim Zhi Rong
Prologue - This is one man's view of the FMCG industry after spending his HR experiences working with the Investment (4 years), Oil & Gas (2) and FMCG industry (3 and still counting). I hope this could shed some light on the dynamics of the industry and hopefully be of value to those who may be looking into a possible career change into FMCG!
Fast Moving Consumer Goods (FMCG), or some call Consumer Packaged Goods (CPG). When people talk about FMCG, they think about the likes of P&G, Nestle, Unilever, Mondelez, Mars, Perfetti, Hersheys... and many more other household names.
It's an interesting industry. Having worked in the Investment/Financial, Oil & Gas and FMCG industries, FMCG is the fastest paced industry that I've ever experienced. And I think this is partially because of the need to stay ahead and meet fast-changing consumer demands and investors' high expectations (as they often assume that developing markets has an insatiable appetite for FMCG products!).
I know some of my friends from the Investment industry may disagree (and drop me a message if you do! After all, I could be wrong since I've left the industry for some time already... and the financial industry I know back in 2011 must have changed since the global Finance crisis in 2007-08 and all that BASEL risk management frameworks and regulations in place today!)
It is interesting to point out that most FMCG companies have a Category-Led Operating Model. What do I mean by 'Category-Led'? Some context:
In P&G, they've Baby, Feminine and Family Care, Beauty, Hair and Personal Care, Fabric Care and Home Care, Health Care and Grooming categories.
In Unilever, they are organized by Personal Care, Home Care, Foods and Refreshments categories.
In Reckitt Benckiser, they've mainly Health, Hygiene and Home categories (disclaimer: they do have what they call Portfolio Brands and Foods categories which constitutes about 8% of their total turnover).
In Mondelez International, we've Chocolates, Biscuits, Gums & Candy and Powdered Beverage and Meals categories!
And the list goes on...
Category operating models are proven to work and deliver results. Category model provides the opportunity to grow global brands at a larger scale, create best in class cost management to drive margins and achieve operating excellence.
Ok - I know the above sounds like big words and fancy terms. So let me explain in a simpler way:
In the past, you may have a category (let's use grooming category - Gillette shavers as an fictional example) registering strong sales growth in Japan and South Korea but not doing so well or virtually non-existence in China and Vietnam because of a strong local alternative competitor who has dominated the market share.
If you were still operating in a country-led operating model, the Country GMs in Japan and South Korea may probably just continue to look at investing grooming category in Japan and South Korea since P&L are held at the country level and their bonus are probably tied to their country performance.
If you've shifted to a category-led operating model, a Category President is likely to look at the category from a regional pov in Asia. A Category President may have the ambition to grow the category outside Japan and South Korea by investing heavily to promote (or even launch from scratch if there was no presence) the grooming category and Gillette brand in China and Vietnam in an effort to expand the category footprint and market share.
The Category President can leverage best global marketing and brand equity practices, learn from how other regions has launched categories in new markets, and explore if there are ideas that they may steal with pride.
Did the above help clarify?
I love the FMCG industry because of a variety of reasons. It's fast pace nature means there's never a boring day for you. You'll be constantly required to look at change management, transformation, cross functional projects and supporting the business to deliver top & bottom line QUICKLY. It is also an industry where I can relate to the products very instantly. These are products that have an impact in millions of home across the world.
Even the way FMCG companies do business has changed. They are doing it more responsibly than before and putting in increasingly more efforts to ensure good corporate social responsibilities.
Some examples includes Reckitt Benckiser's carbon footprint reduction targets by 2020, Unilever's effort to improve opportunities for women with the Dove Self-Esteem project to Mondelez's Mindful Snacking initiative.
The FMCG brands found in consumer products is a trusted name for millions of consumers worldwide. The ultimate aim is to make sure the products help people get more out of life, making our days better in small and meaning ways. And for this - I love the FMCG industry.
This article first appeared on LinkedIn