Navigating FMCG: Insights from PepsiCo’s Former Chairman & CEO

As digital-first businesses and direct-to-consumer startups disrupt the fast-moving consumer goods industry, traditional companies are struggling to keep up. The industry, once known for its agility, is now grappling with slower adaptation cycles and outdated operational models.

Shiv Shivakumar, a veteran leader with experience at global brands like Nokia and PepsiCo, sheds light on the evolving landscape of FMCG and the urgent need for transformation. 

In a session at Masters’ Union, Shiv discussed the importance for legacy FMCG brands to rethink their strategies, leverage technology, and form ecosystem partnerships to remain competitive. 

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Watch the podcast to learn more about the future of FMCG, the importance of agility, and how technology is reshaping the industry, from Shiv Shivakumar, Former Chairman & CEO of Pepsico.

The Declining agility of FMCG companies

One of the most pressing issues discussed by Shiv is the growing lack of agility in traditional FMCG companies. He notes that these companies, once pioneers of innovation, have become slow to embrace the technological advancements that are driving other sectors forward. 

While tech startups leverage data and pivot quickly to meet consumer demands, many FMCG firms continue to rely on outdated models and practices. This decline in adaptability threatens their competitive edge, especially as new, agile players are emerging in the marketplace.

The evolution of FMCG: From branding to technology

Historically, FMCG companies like Procter & Gamble revolutionised branding and distribution strategies, setting new standards for the industry. However, Shiv emphasises that the industry has now reached a crossroads, with many established brands failing to innovate and adapt to the digital age. In contrast, smaller tech-driven companies are able to pivot quickly and offer personalised, innovative solutions to consumers. This shift in the landscape presents a challenge for traditional FMCG firms, which must adapt to new consumer behaviours or risk losing relevance.

The importance of ecosystem partnerships

Shiv points to the need for collaboration between FMCG companies and technology ecosystems. 

In today’s business environment, success lies in building interconnected networks that allow companies to share resources, data, and insights. 

By forging partnerships with tech companies, FMCG firms can create more effective consumer solutions and expand their market reach. This collaborative approach helps companies stay competitive and relevant in a world increasingly driven by digital transformation.

Targeting modern consumers

Shiv observes that modern consumers are more informed, demanding, and focused on personalised, innovative products. As a result, smaller startups, which are able to quickly iterate and focus on niche markets, are better positioned to meet these evolving needs. 

In contrast, larger FMCG corporations, burdened by bureaucracy and slow decision-making processes, often struggle to keep pace with these shifts in consumer expectations.

The need for business education reform

Shiv offers a critique of traditional business education, advocating for a shift towards practical, real-world problem-solving. He believes that business schools must adapt their curricula to reflect the current challenges and opportunities in the corporate world, instead of relying solely on theory. 

By fostering critical thinking and hands-on learning, institutions can better equip students to navigate the complexities of modern business environments and respond to rapid industry changes.

Strategic career management

For students and young professionals entering the corporate world, Shiv provides valuable advice on strategic career management. He encourages individuals to commit to roles for a reasonable duration, ensuring they build a solid foundation of experience and develop relevant skills. 

Continuous learning, skill-building, and contributing to the broader business ecosystem are essential for long-term career success. By adopting this mindset, professionals can position themselves as valuable assets in their industries.

The way forward: What next?

Shiv Shivakumar’s insights offer a compelling analysis of the challenges and opportunities facing the FMCG sector in today’s fast-evolving landscape. His emphasis on agility, innovation, and collaboration serves as a crucial reminder for established companies to rethink their strategies and embrace the technological advancements that are reshaping the marketplace. 

The future of FMCG lies in the hands of those who can adapt, innovate, and collaborate. As the industry continues to evolve, only the most agile and forward-thinking companies will remain relevant in the face of fierce competition from tech-driven startups.