The Importance Of Data For Agile CPG Companies

Will Salcido

by Will Salcido

April 10, 2019

Bedrock’s Key Takeaways:

  • CPG manufacturers shouldn’t have to choose between organizational agility and data analytics.
  • The best companies visualize trends, opportunities, and weaknesses with data while quickly adapting to a changing marketplace.
  • Data Analytics might seem like a luxury expense, but it’s actually an investment in the foundation of any growing brand.


Here’s a scenario: You’re a CPG brand responsible for a highly-specialized niche product. After a promising product launch and an initial period of rapid growth, you suddenly find yourself competing for shelf space and channel access with larger, more seasoned brands. Product sales suddenly level out, and you’re forced to tighten your belt. Looking over the latest budgets, you must choose between one of two planned investments:

  • Organizational restructuring that promotes agility within your company.
  • Data analytics tools, which can visualize trends for your product category.

Given how rapidly business climates can change these days, many industries have begun to focus on agility above all else. In 2017, McKinsey’s Consumer Packaged Goods Practice published a survey about the organizational issues prioritized by CPG human resource leaders. From these results, McKinsey learned organizational agility was an essential goal for most companies — 73% of respondents prioritized the ability to make faster and smarter decisions at every business level.

For CPG manufacturers facing the above scenario, the choice is a trick question — agility alone is not enough. Data analytics is what enables your company quickly respond to in-depth sales and financial reviews, flatlined product sales, and other threats to your brand. Analytics grants businesses the ability to visualize industry trends while offering essential insights for executive decision making.

To be clear, agility should absolutely be a priority for any modern company. It enables businesses to react to the latest trends, and quickly adapt in the face of myriad business challenges. But in the fast-paced CPG industry, agility and data analytics go hand-in-hand.

The importance of organizational agility

According to the McKinsey survey, organizational agility certainly bears results — agile business units are 1.5 times more likely to report financial outperformance compared to non-agile competitors. They are also 1.7 times more likely to outperform on non-financial measures (things like market share, category leadership, new product launches, etc.).

It’s clear that organizational agility is effective, but only a small percentage of CPG companies have embraced it. McKinsey goes on to note that only 4% of businesses completed a company-wide agility transformation, while 37% are still in-progress. That’s a stark difference compared to the 73% of businesses prioritizing agility. Where’s the discrepancy?

From Bedrock’s perspective, the answer is clear: Agility requires data.

The importance of data to agile companies

Organizational agility requires companies to establish a strong vision and orient themselves with core goals. For CPG manufacturers, that often means obtaining access to reliable product data. With the right syndicated sources, you can visualize trends, opportunities, and weaknesses of specific product categories at scale, and quickly adapt to changes. But without these insights, CPG companies cannot leverage the smart decision-making of an agile company.

Think of it this way: Agility is the forward motion taking your business where you want it to go. But you need to know where you’ve been, where you are now, and what it’s taken to get you there — that’s data-driven situational awareness. You also need to understand the potential opportunities and dangers that lie ahead — analytics can provide that foresight. With all three elements working in concert, you stand a much better chance of reaching your destination, unscathed.

Without the agility informed by data and analytics, you’ll blindly stumble forward, not knowing what comes next.

Instead of a unified approach, many organizations tend to view agility as a reactionary practice. When an economic downtown occurs, it takes the form of rapid changes to product pricing or manufacturer supply chains. This kind of agility is necessary when responding to circumstances that have already occurred, but doesn’t allow you to prepare for what’s coming.

That requires what we like to call predictive agility, which lets you adapt to economic circumstances in advance — something that is only possible with reliable data analytics.

Reactive and predictive agility don’t have to be mutually exclusive. You can have a flexible organizational structure while continuing to invest in data resources. So why don’t more companies do that?

Why prioritize data?

While many professionals in the CPG field are adapting to agility at a structural level, some are unfamiliar with the benefits of data analytics. Perhaps this is because data wasn’t considered a priority for CPG industries until recently. All too often, when a brand suddenly faces new challenges, adapting to immediate circumstances seems more pressing than predicting what comes next. In such circumstances, investing in data hasn’t seemed like an effective use of resources.

But times have changed. The CPG industry is more fast-paced than ever before, and ignoring data is a perilous choice.

Businesses without data don’t simply lack visibility into their current situations, they can’t see ahead to where they want to go, or how to get there. To survive, CPG brands must be able to see the road ahead and be aware of what other brands in their space are doing. And even if data analytics and agility didn’t go hand in hand, manufacturers can’t afford to choose between them anymore. The risks of failing to find a consumer audience, or being outmaneuvered by competitors, is far too high.

The good news is that data analytics is not a pure expense. It’s an investment in the foundation of any CPG business looking toward the data-driven future. When threat and risks rear their ugly heads, understanding data helps you stay out of the red. It lets you visualize trends that are currently unfolding, and provides glimpses of trends to come. It offers organizational stability while letting you respond dynamically to new circumstances.

In other words, an agile CPG company understands and utilizes data.

Looking to find out more about our data analytics platform? Dig deeper into the Bedrock Analytics platform, and schedule a product demo today.