Transcript 0:00 [upbeat music] Welcome to The Peggy Smedley Show, the podcasting voice of IoT and digital transformation with your host, Peggy Smedley. 0:19 Hello, listeners, and welcome to today's edition of The Peggy Smedley Show. I'm your host, Peggy Smedley. What a great day to be on the radio. 0:27 Today, in segment one, I'm gonna be looking forward to be tackling our main topic of the month, IoT in the CPG industry, and how is the Internet of things playing a role in CPG. 0:40 For those of you who might not know, that's consumer packaged goods. What trends should we be watching for? What's going on with some of the major players in the space that are worth investigating? 0:52 And later on in the show, I'll also be interviewing some great guests. I will be opening up the show talking with Kingbin Yuan, Senior Director of R&D International at The Hershey's Company, so that's gonna be all sweet. 1:05 So and then later on, I'll wrap up the show with a show regular, James Arthur Ray, entrepreneur, author, life and business coach. So let's get started. Today, we're gonna be talking about spending. 1:19 I think, I, I'm gonna spend a few minutes, uh, defining, you know, what is consumer packaged good and how it's different from retail. 1:27 You know, if you think about CPG, you know, it refers to products or goods that consumers buy and replace frequently, like, uh, food and beverages, cosmetics, personal care products, and household cleaning products, I think just to name a few. 1:43 When I'm talking about the CPG industry, of course, I'm talking about the whole value chain that it takes to bring these packaged goods to all of us consumers, so this includes manufacturers, marketers, and retailers. 2:00 Now, you can start to fill in, I think, the blanks when I'm talking about this. Retail is one piece of the CPG puzzle, the selling piece of this puzzle. Retailers handle the sale of all of the CPG products to end users. 2:15 Usually, usually I should say, if I can get that word out, consumers in this case. But the consumer packaged good space is important in a number of ways. It really is... 2:26 I, I like to think of it as the backbone of today's consumer-oriented economy. It's a huge driver of the GDP, the gross domestic product, in the US and I think everywhere. You know, anything you could think of. 2:42 So when we talk about the IoT supporting our nation's economy, we're really talking about how these technologies are helping industries like CPG grow and expand. 2:54 So now I hope that that's kind of given you, I would think, a, a preparation for what I'm gonna be talking about. 3:01 So as I was reading what CPG companies themselves had to say about their industry, I stumbled across this really interesting article from Nestle. 3:12 Now, it's interesting, I'm gonna be inter-interviewing Per- um, Hershey's, but I wanted to kind of give you a little bit of everybody. But Nestle Purina has on its careers page, and this was interesting what they said. 3:23 Nestle Purina points out that if you are a CPG producer, competition is fierce for retail shelf space and for the shelf space consumer- in consumers' homes. 3:36 So for that reason, the company points out the importance of marketing to drive consumer loyalty to its brand, as well as innovation that can improve business in ways that will ultimately also drive brand loyalty, and that's where IoT technologies come in. 3:53 It's in innovation. 3:55 And I also think it's also important because we think competition is changing, and when we think about CPG companies, they have to change and adapt and kind of adapt to all of our needs because we're pretty demanding. 4:09 We expect a lot, and I think the competition is increasing. And I think when we look at CPG companies, they've been slow to adapt to the market. 4:19 So right now they're just kind of, as the expression goes, putting their toes in the water and trying to figure out how do they compete and use AI and IoT and all of this big data to actually get into it. 4:31 And that's why I'm excited about interviewing Hershey, because I think they're still trying to figure it all out, and we're gonna discover that in our next segment. 4:38 So here's a few reasons why I think CPG companies really need to be thinking about innovation. 4:45 And I think more so the traditional way of doing business is not enough anymore, and I think that's what we need to be talking about because we all live in this giant connected globally society that we talk about, and connected consumers expect more from brands, products, and our retailers, and we're all a bunch of fussy bunch of people, right? 5:06 And I think, for instance, as consumers, we want to know where our products have come from. 5:12 We want to know what the ingredients are in the, in our cosmetics, our cleaning, our hygiene, as well as all those ingredients and where they've been sourced. 5:22 So maybe you're one of those conscientious consumers who avoided buying Halloween candy this year that it had palm oil in it because oil from palm plantations are destroying habitats for animals like the orangutan. 5:38 Now, think about that. Are you one of those people who's really very concerned about that? It's a different world than it was a few decades ago for our grandparents and their parents. 5:49 So if we think about things like this, as consumers, we're starting to speak up about the social issues and most of them that as consumers, the ones that we care about, and companies need to be sensitive to that.And they're being forced to listen or lose customers forever. 6:07 And you can roll your eyes, but that's how you get business, or that's how you lose business if you're not listening. And you get business by caring about what the customers care about. 6:20 And I will bet you, if you're in listening right now and you're a business, you're getting it. And as you're a consumer, you're going, "Hey, hey, that's me, because if you don't listen, I'm not gonna buy your stuff." 6:31 So the IoT can help businesses be more transparent about ingredients and materials and ingredient and material sourcing and every other aspect of the business process. 6:43 And I can tell you that's the thing that's happening as companies who are based in the States are having to go overseas, and they're having to look at the source of the ingredients, and they're having to do a lot more collaboration and understand it because of the sourcing. 6:58 So consumers' tastes are changing constantly, and information and data analytics can help CPG companies kind of keep on top of everything that is happening across the supply chain. 7:10 Now, one sticky point here is that consumers want their privacy, and they deserve it. We all don't want the information we give to be given to everybody else. We want to make sure of that. 7:20 But on the other hand, as consumers, we also want the perks of personalization and having brands understand our preferences and anticipating all of our needs. Again, I go back to we expect things. 7:34 We want it the way we want it. So acco- to accomplish these feats, I think brands need the data. They've got to have the data, and they've got to understand the data, and that's where big data is so important. 7:46 So I do think that most companies and consumers think that there's a trade-off is in their favor, depending on how and which side of the fence you're on, when you share data and brands use it appropriately and protect the security of it. 8:04 So everybody wins when everybody does the right thing on the right side of this. 8:08 So it can be difficult kind of, uh, to, to toe that line, though, if you're on the, the vendor side, you know, or the CPG side, and it's also a very difficult thing if you're a consumer saying, "I'll give it to you, but I want to make sure I can trust you." 8:24 So then there's always the cyber criminals out there looking to ruin it for everyone by stealing data and using it for all the wrong reasons, and that's what we all fear, right? 8:34 That, that our heart gut-wrenching feeling that, you know, those nefarious characters are out there and, and, you know, I don't want to give the data because something bad can happen. 8:44 So in terms of CPG trends, I want to highlight some of the challenges the industry I think is facing right now. 8:51 CB, CB Insights says, uh, has an interesting, I think, research, uh, brief that outlines some short-term, medium-term, and even long-term challenges facing the industry. 9:04 And for short-term challenges, you can look at the recent CEO turnover rates in the CPG industry, and it makes you wonder what the heck's going on. I mean, you got to look at that. 9:15 Also, CB Insights suggests activist investors are putting pressure on brands and their CEOs, creating a lot of unrest right at the top. 9:26 You, if you're at the top, you better know what the heck you're doing, otherwise you're going to get ousted. So new entrants into the market are also creating medium kind of term challenges for the CPG industry. 9:37 A couple of examples are the Dollar Shave Club, which completely is turning the business model for shaving products, I think, on its head, which is interesting, and if you look at Chobani Yogurt, which, you know, kind of waltzed onto the scene and has been challenging the big li- big dogs like, uh, Dannon and Yoplait. 9:57 You know, look at what they're doing. 9:58 And then in terms of long-term challenges, you have the technology companies forcing CPG companies to go back to the drawing board on things like marketing strategies, and they're having to do a lot of different things, and they're having to think about who do they partner with. 10:14 So think about this too. 10:15 In the future, we as a society may have to move beyond the storefront, and we all know this, and we're all hearing this a lot, and CPG companies need to start planning now for how they're going to get their products in front of consumers and understand if consumers are going to continue to buy their products. 10:35 So that actually leads me to my tip for the day. Does your business fall somewhere in the CPG value chain? If so, challenge yourselves. 10:47 I mean, that's really what you got to do to think about how technology, AI, can help address short-term, medium-term, and long-term challenges. You got to be using big data and AI because if you're not, guess what? 11:01 You're out of business. You got to start thinking about this stuff. So manufacturers, and then I guess here's my opinion for today. 11:08 Manufacturers, marketers, sellers, and everyone else involved in consumer packaged goods needs to lead the charge. This is where it gets super, super exciting. 11:19 You know, don't just try to keep up with what consumers want. Try to be the ones creating innovation with the help of technology. As I always say, you can't do it alone. You've got to partner with the right people. 11:31 When you partner, you're going to have tremendous success because in today's innovative world, it is changing way too fast to think you've got all the answers. And you know what? 11:41 Everything's going to the cloud, whether you're on the edge or right at the cloud, you've got to be able to respond quickly to consumers' needs because you know what? 11:49 We as a consuming world, we want things fast, quicker, easier than ever before, and we're demanding it, and if you're not willing to give it on the CPG side because our tastes are changing, and they aren't the way they were before, and they're not going to be the same in a few years because as we age and things happen and tastes change, everything's going to change, and you need to change with it, and partners will help you get there. 12:12 So that's all I have for this segment. So those are my thoughts for today, but I want to hear what you think, and I tell you, get up on Twitter. 12:19 Y'all, you guys have all kinds of other things to say, but I want to hear what you want to say about what I just had to say, so tweet at me at ConnectedWMag. 12:26 And if you tweet at me, hey, maybe I'll put you on the radio, and we'll have something else to talk about. Hey, that's all I got for this segment, but stick around. 12:33 Hershey's is going to have something to say, and let's hear what they have to say and see if they agree with me on all this. So check out our website at connectedworld.com or thepeggySmedleyShow.com. 12:43 You know, we're going to take a quick commercial break, and after this commercial break, I want to get right back with Hershey. 12:49 So remember, this is The Peggy Smedley Show, the podcast voice of IoT and digital transformation. Remember, with great technology comes great responsibility. Go get that quick cup of coffee, and we'll be right back. 13:02 [outro music]
