Last month, members of the Consumer Goods Forum, representing more than 400 top multinationals in the consumer goods industry, gathered in New York City for the organization's annual global summit. Member companies were joined by NGOs, journalists and other stakeholders to discuss a topic near and dear to our hearts here at 3p: trust as the foundation for growth.
Bringing top multinationals like Procter & Gamble, Nestlé and Pepsico together raised a heap of questions that will prove crucial to the industry. Fundamentally, what "trust" actually means still seems open for debate. If a shopper gravitates toward a certain brand or product out of habit, does that mean she trusts the company behind it? Should she? And does it even matter?
These questions strike at the heart of key dichotomies that, as we move through the 21st century, may very well separate the winners from the losers: brand versus parent company and performance versus citizenship. A company can produce great products and hire winning PR firms to market its brands, but the troubles of its poor corporate citizenship are always lurking in the shadows -- waiting to bring about disaster. Likewise, a company can be an exemplary corporate citizen but still produce an undesirable product -- or simply not know how to market its product in a way that resonates with consumers.
"Our industry is at an inflection point," Bulcke continued. "The 'how' has become as important as the 'what.'"
"We are at a crossroads as an industry," Indra Nooyi, CEO of Pepsico, said in agreement. "Our future is in jeopardy if we don't bridge the cap between consumers and consumer goods companies."
But ... not everyone at the event was buying it.
"[Customers] don't stop to think about the trust of a company; that's a creation of the press when they have to fill inches or minutes and want sensationalism," Michael Bloomberg, founder of Bloomberg LP and Bloomberg Philanthropies, said at the CGF Summit. "Either the product is good or it isn't good. Either you like it or you don't."
On one hand, studies and surveys show that 21st-century shoppers are increasingly interested in corporate citizenship and sustainability. Sustainability writers like myself often point to a 2014 Nielsen survey, in which 55 percent of global online shoppers said they are willing to pay more to buy from companies that are "committed to positive social and environmental impact."
But there's a big difference between the way someone answers a survey question and what they actually do in the store. Sure, on face-value customers may say they'd rather buy from a company that practices good corporate citizenship, but do average consumers really know about the CSR performance of their favorite brands?
These are all worthy points, but Bloomberg's argument misses one key factor: the advent of social media.
"This is an age where everyone has a megaphone at their fingertips," Indra Nooyi of Pepsico said at the summit.
A.G. Lafley, president and CEO of Procter & Gamble, summed it up briefly at the summit: "We can build trust for decades and lose it in a minute." (Bloomberg also said he buys Colgate toothpaste simply because he "always has," so what trust means for companies isn't all he and Lafley disagreed on.)
And while Mike Bloomberg probably won't be dissuaded from his favorite cavity-fighter, the same can't be said of the plugged-in generations below him. The New York icon conceded this himself, saying Bloomberg Philanthropies, which receives 86 percent of Bloomberg LP's profits, is a huge asset in recruiting young people. "They make the decisions," he said of young recruits. "They also make the decisions on how environmentally friendly companies are. Any company understands that because their HR department comes back and says, 'This is what the kids are asking about.'"
This touches directly on why all of these powerful men and women, who likely had dozens of other things they could be doing, assembled in New York to discuss brand value: As the world becomes ever-more transparent and socially connected, now is the time to start thinking about trust. For 21st-century companies, what goes on behind closed doors won't stay that way for long, and poor corporate citizenship will always come back to bite you in the bottom-line -- whether it's tomorrow or 10 years from now.
As Nooyi of Pepsico put it: "Although tomorrow looks different, the way we move forward is the same ... Trust in large companies is down. We have to stop and ask ourselves why that is."
Images courtesy of the Consumer Goods Forum