How to wield soft power in FMCG
Soft power is a term often used to describe the influence held by a nation beyond its financial and military strength. The United Kingdom has wielded significant soft power over the years, via various means – for example our development funding, our arts (the Beatles, our theatre), and the global reputation of the BBC. Because of this, the visibility and influence of our values and ways of thinking around the world, has often exceeded our financial and military power.
To quantify soft power is hard but few doubt its existence and importance.
Why am I talking about this? Because there is also soft power within our industry. A company's influence is a function of more than just the products it makes, the brands it owns or the shops that it runs.
So how can you think about your organisation’s soft power in our industry? Here’s three questions to consider.
First, are you consistently describing and demonstrating a clear purpose beyond just making money for shareholders? Companies that can do this are typically more highly respected. If you are Essity and can show that you are genuinely committed to the importance of helping consumers with incontinence (a more common problem in the UK than hay fever), that counts for something. If you are Waitrose and are able to demonstrate genuine commitment to animal welfare and a thriving farming community, that counts for something. We can have individual views about the relative importance of these purposes, but that misses the point. The purpose doesn’t have to be grandiose as long as it is valid.
Secondly, are you demonstrating expertise beyond simply manufacturing, branding or shopkeeping? Those things are fundamental, but do you offer more on top? For suppliers, category strategy and management is an example of an additional expertise. People sometimes ask whether it is worth investing in all that data and all those people. The fact that almost all the biggest and most successful companies make the investment, suggests the answer. Having a clear and expert opinion on how to drive category sales and profit adds significantly to your credibility and ultimately your leverage with Retailers. It helps make your relationship more adult-to-adult, and less child-to-parent.
And third, are you getting out there in the industry to be seen and heard, ahead of competitors? Bigger companies can do it - M&S’s profile on LinkedIn seems to me to far outweigh bigger Grocers. Smaller companies can do it - Lucky Saint (low alcohol beer) are much more visible than bigger brands, both digitally and on industry platforms. If people think you are big, you are more likely to get big.
Don’t under-estimate the importance of Soft Power. It’s not just about your product, brands, shops or prices. It’s also about your purpose, your expertise and your visibility in the industry.
Jeremy Garlick is a Partner of Insight Traction, consulting with FMCG and Retail companies. He was formerly Head of Insight at Sainsbury’s, Waitrose and Premier Foods.