Research agency Deloitte launched Societal Impact and Purpose: Unlocking Value for FMCGs and Food Retailers on Thursday at the Food & Grocery Australia conference detailing how brand’s leading products can create awareness in most societal issues the industry is facing now.
“Australian business leaders agree that they have a significant role to play in addressing challenges that range from climate change to plastics, and from health and wellness to ethical sourcing and supply chains,”
said Vanessa Matthijssen, Deloitte Australia national consumer products leader.
“And they are taking action. According to global research by Deloitte and Forbes Insights, they increasingly care about their impact, with one in four ranking having a positive societal impact as the most important success measure in evaluating annual performance, notably higher than pure financial performance metrics.”
She added more consumer product leaders globally (51%) don’t believe societal impact initiatives create a positive impact on profits thus it leads to “placing future social issue investment at risk, right when it’s needed most.”
“To ensure the pace and depth of investment continues, and is seen as more than just a cost of doing business, we need to reframe the challenge, and unlock the value that societal investments can offer,” added Matthijssen.
Matthijssen said in a statement that the return on societal impact investment is multi-faceted. People are keen to work with companies who are socially responsible. The committed workers generally are more creative and productive.
“It’s also important to value chain partners, both upstream and downstream, and partnering with retailers on societal impact innovations can be the source of stronger strategic relationships that deliver value over and above the access to market,” she explained.
Matthijssen further added that consumers were arguably the greatest source of return for FMCG companies and food retailers.
“Consumers are increasingly driven by their social and environmental values, and more and more, societal impact is driving consumer decision-making, loyalty, and willingness to pay,” she said.
Deloitte said that brands can lead in the FMCG sector by showing the consumer a societal problem and influence them to care about them more and provide solution via their products.
These products can offer functional (e.g. improved health) or emotional benefits (e.g. feeling good about the purchase) which can lead to consumers feeling that they are making a difference in the society.
“The societal impact agenda is often set by activist groups, governments or retailers, but when brands lead on societal impact, they not only determine the driver of choice, they control the value it has in the eyes of the consumer, and they then hold the premium,” Matthijssen added.
“Yes, consumer value can be hard to unlock, it requires behavioural change, and that is especially hard in a habitual area such as grocery shopping. For consumers to act on their values, they need to see the problem, feel it, and understand how they can make a difference by associating themselves with the brand and the product.
“We encourage brands to tell their social impact story. Too many of today’s impact initiatives live in a CSR report, but aren’t communicated at the coal face. Societal impact stories will have to come down from a corporate level to a brand and product as that is what the consumer connects with.”
Deloitte’s report also showed how artificial intelligence (AI), smart packaging and conversational voice, are now altering how brands are affecting social issues through their products.
“AI-powered marketing will allow brands to use values-based micro segmentation and personalisation at scale, and packaging fuelled by technology is fast becoming an interactive digital channel, helping brands to tell their societal impact stories and capture the attention of the consumer in a moment that truly matters, be that in store or at the point of consumption,” Matthijssen explained.
“And voice commerce and natural language processing and can bring a human element, and empathy, to the consumer conversation. Finally, it’s important to recognise that brands operate in broader ecosystems that run from suppliers and retailers to government, regulators and third party certifiers. All have the power to amplify or diminish value and reinforce trust and authenticity, and just as much to break it when values are in conflict.
She said that collaboration is critical as its a good two-way dialogue or joint investments on shared values can deliver proven results.