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How CPG brands can deliver on supplier diversity promises

- How CPG brands can deliver on supplier diversity promises

It pays for consumer packaged goods companies to diversify their supplier networks. Costas Xyloviannis, CEO of supplier experience platform HICX, offers a 3-pronged approach.

There are many good reasons for global consumer packaged goods (CPG) brands to have supplier diversity programs. For one, they face expectations from regulators, shareholders, and consumers, which if missed impact sales figures and share price. Further, brands that support supplier diversity may enjoy economic benefits as a by-product and, of course, they can make a positive impact.

Reasons aside, supplier diversity is a top-level issue with at least eight of the world’s top 10 CPG brands by spend, having stated goals in this area. For example, Unilever has committed to spend €2 billion (US$2.137 billion) annually with diverse businesses by 2025. By the same year, Mars intends to reach £1 billion (US$1.248 billion) globally in diverse business spend and have at least 60% of its suppliers actively promoting diversity programs within their organizations. Other brands, including Mondelēz International, Coca-Cola and Nestlé, are also dedicated to sourcing from businesses that are 51% owned by a historically under-represented group.

Likely, more CPG brands will continue to make supplier diversity a priority.

While the leaders of global brands embarking on this journey plan to drive spend to diverse suppliers, in practice, their teams on the ground face an obstacle: diverse suppliers are difficult to find. Only a portion are indeed certified as ‘diverse,’ and those who are certified wouldn’t necessarily be skilled to match specific market needs.

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