Thrifty times call for new strategies

At an investors conference call yesterday, Indira Nooyi, the chief executive of PepsiCo, said she expects the ‘age of thrift’ in consumer spending to continue into next year.

As consumers in the developed world are placing value at the top of their agendas, the company’s efforts in the future will be on developing lower priced products. Pepsi has, in the past, been quick to spot and adapt consumer trends such as the introducing healthy snack food. And if it now believes that consumers will not be interested in pricey products, others too will follow.

So what does this mean for the chemical industry? Will companies such as Pepsi move to cheaper packaging formats? Will these companies be less interested in packaging innovations?
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Picture source: PepsiCo

This will have implications for innovation in the chemicals industry – especially development of value added grades/products? Many of the leaders in the industry have been using innovation as a platform to differentiate themselves. Is it time to reconsider this strategy?

Or will consumer product companies simply use this trend to drive an even harder bargain when purchasing raw materials?

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