Industry Insights – F4SS Bi-annual Meeting

F4SS Contract Manufacturing IndustryIndustry conferences and seminars are good for many things including networking, renewing connections face-to-face, building a larger network of possible sales targets, showcasing new products or services to industry influencers, etc. But if you don’t learn anything new, discover ways to improve yourself, and find information to make your company better the return is not all it could be.

During the first week of March, I attended the Spring F4SS Connect event. F4SS stands for the Foundation for Strategic Sourcing. F4SS is an industry organization for Contract Manufacturing and Secondary Packaging within the food and pharmaceuticals industries. F4SS brings customers and suppliers together to work on becoming more strategic in relationships, share best practices, and create tools that will benefit not only group members but the entire industry.

While at this conference I was able to gain multiple insights that were not only new learning but will also have application for me personally and PacMoore as a food contract manufacturer. I have already shared these with our senior management team. Now it’s your turn!

First of all, let’s discuss some of the external trends that will continue to have significant impact on our industry.

The Need for Adaptable Capacity

Product introductions will continue to increase while product lifecycles will continue to decline – the big winners will be the food contract manufacturers who are nimble and are known for having adaptable capacity. Another way to look at this is that it is hard to get large CPG companies to leave 90% of their business (their battleships) to chase the 10% that is growing so they need flexible and adaptable contract manufacturers (a fleet of small PT boats) to chase these small but growing categories while they maintain the effectiveness of the battleship. With our pilot equipment and product development capability, PacMoore is able to serve in this way for dry blending, extrusion, spray drying, consumer packaging, and each new capability we add.

 Relationships are Here to Stay

Relationships are not declining in business as some predicted they would years ago but they are growing in importance as CPG companies cut costs by moving away from producing their own products. Because of this these CPG companies are increasingly looking for external suppliers to fill this production void. They need to know they can fully trust these suppliers to consistently deliver their needs. The ones that deliver on that trust will become long term supply chain partners.

Automation is Scaling Up

Automation is scaling up in the food contract manufacturing industryAnother industry trend that is going to continue to grow at increasing levels is the utilization of automation. There are a few reasons for this. One is the lack at times of readily available skilled production workers. Another is that equipment companies are working to take the tech out of technology which will make it increasingly easy for people and companies to apply it. Regarding specific technologies, 3D printing was mentioned as one that is scaling up in every area of life. From a manufacturer’s perspective, many are already committing to 3D printing for creating spare parts in their plants.

Next, let’s discuss some of the information that was directed to how we as companies can best approach our businesses in the current industry environment.

Know Your Core Competency

From a strategic standpoint, attendees at the F4SS conference were encouraged to pay attention to their company’s core competency. A company that expects to be sustainably profitable in the long term must decide what they are going to be great at, what they are not going to be great at, and what they are going to be lousy at (so they never consider doing it). An analogy is a great left tackle in football – his core competency is protecting the quarterback so he doesn’t ever attempt to run the ball. Companies that know their core and successfully communicate it internally have employees that work more freely and effectively. Companies that know their core generate most of their growth by growing their core – a caveat to this, however, is that we can’t get so comfortable in the core that we miss the need to redefine it. One excellent final point is that it is also critical for each of us as individuals to consider and reflect on what we desire to be our own individual core – what is your essence?

Communicate the Why

A related point for us as companies and especially for a marketer like me is that we have to be sure that we “communicate the why” in our messaging. This is the primary message of a popular Ted Talk by Simon Sinek called “Start with the Why”. Most companies communicate What then move to How then move to Why. Inspired companies reverse the flow to communicate the Why then move to the How then move to the What. The theory behind this is a good one – that people don’t buy what you do, they buy why you do it.

A New Method of Creative Thinking

Lastly, our event moderator Jeff Hurt provided a new spin on using a group to be creative. He believes that brainstorming is much less effective than we tend to think – that it does not work because it creates Group Think where individual creativity is stifled in order to generate group consensus. He proposes a new method called Brain Writing where everyone writes down an answer to a question on a piece of paper then passes it to the next person who adds to it and passes and so forth until the papers have all fully circulated. Jeff believes Brain Writing causes our brains to release higher levels of oxytocin, which is regarded by many to facilitate trust and attachment. I am especially looking forward to trying this at our next innovation / product development meeting.

There was so much more but I have run out of space. Thanks to F4SS for the great learning as always. I hope you gained something as well!

Chris Bekermeier

Vice President, Marketing and Legal Affairs

Chris’ experience with Scott Paper and ConAgra has allowed him to sell and manage leading brands such as Scottissue®, Viva® Towels, Healthy Choice® and Butterball®. He received his B.S. in business management from Eastern Illinois University and his M.B.A. from the University of Chicago. Chris currently leads marketing efforts to grow PacMoore’s food contract manufacturing business in the areas of dry blending, spray drying, extrusion, re-packaging, and consumer packaging.