IBM: Consumer goods companies apply technology to sustainability

A new study reveals the sustainability strategies and solutions being used by consumer goods companies.

According to a new global study of 1,800 consumer goods executives across 23 countries from IBM and The Consumer Goods Forum (CGF), respondents indicated their companies will boost technology budgets by an average of 34% over the next three years in order to operationalize sustainability.

Technologies respondents plan to invest in to aid sustainability efforts include automation (71%), analytics (69%), IoT (62%), artificial intelligence (55%), and intelligent workflows (44%). Seventy percent are applying AI-enabled workflows to improve inventory management and eliminate excess stock, while 69% are using AI-powered demand sensing and 67% are leveraging predictive and prescriptive analytics.

About one in four (26%) respondents driving supply chain efficiencies with “digital twin” (26%) technology that creates virtual replicas of the supply chain for streamlined testing.

Strategic initiatives

Six in 10 (61%) respondents are purposefully aligning their sustainability and operational goals, with 77% agreeing sustainability investments will accelerate business growth. This alignment typically results in initiatives such as sustainable packaging, energy-efficient manufacturing processes, and ethical sourcing of materials.

The study, “Redesigning brand values: Purpose and profit converge in core operations,” also found that nearly 75% of respondents agree on the need to recalibrate how they measure and report on sustainability targets. However, many lack the capabilities to monitor and measure progress in real time.

"In today's world, consumers actively seek out brands that reflect their values, making sustainability integration an important differentiator for consumer goods businesses and the retailers they service,” said Luq Niazi, global managing partner for industries at IBM. “Meaningfully embedding sustainability into brand operations can only be achieved through a robust combination of business process, technology, ecosystem partnerships, and C-suite collaboration across manufacturing, technology, operations, supply chain, and sustainability. By embracing this holistic approach, consumer industry executives can help drive sustainable business performance to tap into a larger share of consumer spending.”

"The world we live in is rapidly changing and FMCGs as well as consumers are taking notice,” said Ruediger Hagedorn, CGF end-to-end value chain director. “So, how are companies in this sector preparing for both a more sustainable and efficient future while leveraging new technologies? This report provides valuable insights into what determines decision making at the boardroom level globally, which will shape our future." 

In 2022, the IBM Institute for Business Value and The Consumer Goods Forum (CGF), in collaboration with Oxford Economics, conducted a global survey of 1,800 industry executives across 23 countries - North America, Latin America, Europe, Middle East and Africa, and Asia Pacific - to understand how consumer products leaders balance emerging and urgent sustainability objectives with ongoing operational goals. 

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