Operations and Sales: Significant Pandemic Challenges for Brand Owners in Latin America

The results of our survey pointed out clearly that operations and sales are the areas posing the most challenges to companies that manufacture consumer packaged goods in the midst of the current COVID-19 pandemic.

In operations, one of the biggest challenges for companies is managing cost structure: “Keeping manufacturing costs competitive is a priority for us: it is the only way to stay on our clients’ vendors list,” according to the director of a participating company.

This threat of losing competitiveness, faced by manufacturers of consumer packaged goods in the Latin American region, is reflected in the purchasing capacity decline of their end customers, a serious detrimental factor for sales. "Maintaining the company’s level of sales will involve a tough battle with the competition," predicts a food producer, who in any event sees innovation and development as a way to mitigate the consequences of the current market distortions. "Achieving and surpassing first quarter sales through marketing strategies for the digital commercial channels could compensate for the lack of buyers in physical stores, complemented by the offer of extreme biosecurity by the time face-to-face purchases return.”

Biosafety guarantees

Building trust and security with consumers seems to be the strategy many companies are following to keep operations and sales dynamic, and thus biosafety is preponderant among the challenges they experience today. The current trend is toward the "transition from a state of control to a culture of hygiene, safety and disinfection," says one survey participant. A coincident assessment collected from the survey’s responses indicates an urgent need to promptly obtain safety certifications that will prepare them for the economic reopening. "Looking for reliable partners and innocuous processes will be the new great challenge for the industry," said a businessman in the processing sector. Two of the measures that companies are applying are aimed at making security an ally for their plans during and after the pandemic.

Remote access

Digital remote technology has been mainly used in many administrative operations and for work from home by employees. As discussed in previous articles based on our first survey in early April, however, it is increasingly being used in production and plants, and many companies intend to apply it in other areas.

It is significant that, in addition to the approximately one-third (34.9%) of companies surveyed by Mundo PMMI who stated they are already using remote access technologies, a similar percentage (32.5%) has considered their use in the short term.

Our readers’ answers about use of remote access in their companies now cover technical assistance, preventive maintenance, factory acceptance testing, operations monitoring, online operator training activities, and/or resolution of problems related to installed capacity. One survey participant states: “As a company that uses bag forming machinery, we have relied on remote installation of new equipment. This has been a challenging task, but it has helped us find new ways to support our production.”

The remote access option has also enabled producers of consumer packaged goods in Latin America to counter current difficulties in some of their production processes: “Working to adapt to changes in operations and supporting ourselves more with remote access technology has improved our manufacturing and our products and services offer to customers," says a producer consulted by Mundo PMMI in the survey.

Packaging tailored to needs

A second current strategy is implementing changes to packaging. In addition to costs and changes in production, modifying a package is a decision that implies an important impact on the brand and on consumer perception. Although we have recently seen cases of companies giving their products new names to send messages of optimism and show their good wishes for overcoming the crisis, preserving the features of a package or the image of a product is a market consolidation strategy many companies find difficult to change.

However, the attention that the COVID-19 pandemic has brought on packaging is leading a significant number of CPGs that participated in our survey (74%) to think of ways to use packaging to respond to consumer concerns on health, safety, economy and environmental sustainability when choosing the products they purchase.

Increased biosecurity and asepsis in packaging is the most evaluated measure, followed by another decision that combines safety, functionality and economy: the design of special packaging for online sales. A low –but no less important— percentage of survey participants also points to the development of packaging that fights pathogens as a way to meet the demands imposed by the pandemic.

Sustainability is another consideration in new packaging properties, with possibilities such as creating recyclable options, reducing the use of materials, or packaging materials design that promote proper selection and recycling amongst consumers.

This series of three articles based on the responses to our recent survey has been aimed at exploring brand owners’ expectations along the value chain amidst and in a post-pandemic scenario. Their responses have enlightened us on the challenges they face and the strategies designed to meet them. We also encourage our readers to complement this information with the conclusions and guides offered in the PMMI’s recent business intelligence economic report Economic Impact of COVID-19, Guidance in an Uncertain Economy 2020, published recently and with general application. This research highlights, among other things, the importance of being attentive to the future, identifying trends, finding ways to perform our work in different manners, differentiating ourselves from the competition and thinking about what it takes to have everything ready for the coming moment when the situation turns.

Our readers’ responses and comments, and the guidance offered by studies such as the above, are surely important tools to begin examining the post-pandemic period with a realistic look, distanced from pessimism and focused on new opportunities.