Article

LS International 02 September 2019

Adapting with Speed to Keep Performing in a Fast Changing and Disruptive Environment by Christophe Beau

The success of CPG businesses has always been based on consumers, by understanding their needs and answering it with appealing propositions and great executions securing high brand equity scores, strong consumer loyalty, and repeat purchase. But the way to get to true and deep consumer insights has changed.

In our current times, keep winning in the CPG world has become more and more challenging as consumer trends are evolving fast. Far are the times when a media plan used to rely on a spent split between TV, radio, print and a few other items.

For example, in Indonesia, consumers are now only spending 2h16 a day in front of their TV, whilst spending 3h26 on social media and almost 8h a day surfing the internet!

On top of it, Indonesia counts with one of the highest penetrations of mobile users in the world (+80%).  Then it is easy to understand why a media plan in Indonesia needs to be shaped towards digital and the brand content has to address the new consumer trends in a fast way.

Now the digital world is bringing a new component to our marketing strategy: not only the brands have the ability to deliver instant content to their final consumers but also brand owners can access a world of data, helping them to decode the latest trends in a very short time. These new ways of working are disruptive as CPG needs to behave with even more speed and agility, having the capabilities to flex strategies and respond almost immediately to new requests. It has direct implications on the way teams are led, empowered and organized.

In Indonesia, we are learning how to adapt to this new reality almost daily as our environment is evolving so fast. GoJek, Grab, Bilbli, just to name a few, have started to reshape the way we do business.

For decades, the beer category in Indonesia had been very dependent on the “Red Districts” where Sing & Dance and Male Fun outlets were driving most of the consumption.

But for the last few years and accelerated in the last few months, we have noticed a shift in consumer occasions supported by the development of new channels (Modern On Trade) and the surge of big digital/e-commerce players. Now, we can observe the main beer consumption is driven by the Casual Get Together occasion when Adult Millenials gather in small groups (6 to 8 people) and enjoy their drinks. It could be in mid-tempo bars or restaurants, at friends’ homes or any informal location. This change has pushed the whole industry to reformulate his consumer proposition, redirecting investment behind new channels and new tools to connect more effectively with consumers.

With Guinness, we’ve adapted to this occasion by shaping a new strategy tapping into the consumer trend called “We are what we eat”, offering local adult consumers to pair a beer of character, Guinness, with local food (perfect match with Indonesian spicy food!) whilst watching their favorite football games or having a relaxing moment amongst friends.

As a consequence, we had to re-focus our investment into modern on-trade outlets, moving away from the traditional dark outlets, connecting with adult millennials through digital platforms and engaging e-commerce players to deploy instant prize promotions, and working with them to strengthen our distribution, ensuring Guinness can be enjoyed perfectly cold and poured during any Casual Get Together moment.

Shifting our strategy has not been easy and we have only started the journey, but it is amazing to see the new level of precision we now have to articulate how we can engage with consumers or shoppers. The learning from our partnership with Happy Fresh, GoJek are massive, allowing us to craft communications and promotions based on very targeted consumer groups, helping to better connect with our consumers and improving our return of investment.

Definitely, Data has become the new “Gold Mine”, allowing CPG to decode faster consumer needs, prioritizing and focusing investment to get a better return.

The journey has only started and will require to keep learning along the way, making more and more relevant local insights.

To embrace these changes, let‘s ask ourselves the following question: is our organization really ready for the digitalization of the glocalization?

Let’s hold the mirror and lead the change!

Christophe Beau

General Manager Diageo Indonesia. August 2019.