Impact of the demand for natural ingredients on supply chain: A Global Executives Survey
GlobalData’s Impact of the demand for natural ingredients on supply chain report examines what changes increased demand for natural products and ingredients may cause in supply chains, in order to identify the best practices for minimizing disruption.
The majority of FMCG manufacturers are projected to use natural ingredients in the products they manufacture over the next five years as the demand for natural ingredients among consumers is growing. According to the majority of B2B respondents, the term natural refers to being free from synthetic ingredients, while global consumers consider it as preservative-free. The rising trend of natural ingredients among consumers has led to change in supplier engagement as the majority of respondents either plan to change or have recently changed their suppliers to include more natural ingredients. Furthermore, the focus is towards manufacturing more natural ingredients and price is highlighted as the main challenge to deliver products containing natural ingredients.
What else does this report offer?
A definition of natural from a B2B perspective: Identifies the understanding of the term ‘Natural’ as perceived by B2B vs. global consumers
Product proposition with natural ingredients: Recognizes the proposition of natural ingredients used by FMCG manufacturers at present and the likely use of natural ingredients in the products they manufacture over the next five years
Supplier engagement: Highlights whether respondents plan to change or have recently changed suppliers to include more natural ingredients
Price fluctuations: Identifies if the increased demand for natural products will affect prices in various categories of products manufactured or supplied by FMCG manufacturers/suppliers
Challenges in delivering natural products: Categorizes the main challenges faced by FMCG manufacturers/suppliers in delivering more products containing natural ingredients to their customers
While 66% of B2B respondents highlight the term natural as being ‘free from synthetic ingredients’, 24% of global consumers identify it as ‘allergen-free’
The majority of respondents state that the term natural will be more appealing to the FMCG industry over the next five years
In total, 45% of respondents are using natural ingredients in the products they manufacture
Globally, 54% of respondents plan to change or have recently changed suppliers to include more natural ingredients
Reasons to buy
Helps organizations to understand the know-how of what the term natural means to their customers so that they can align their product propositions accordingly
Organizations can improve their supply chain management by consultation with suppliers to include increased natural ingredients in their products
Helps organizations to track the price fluctuations against their competitors who plan to manufacture products using natural ingredients
Addresses the important challenges faced by the manufacturers/suppliers in delivering more products containing natural ingredients