Consumer Packaged Goods

Consumer Packaged Goods: Low Spending, Focused on the Supply Chain

In a noisy store full of choices, consumer and packaged goods companies are vying to convince customers to select their products over other companies’ products at the point of purchase. To find a solution to this problem, CPG companies are experimenting with IoT technologies. Although this industry isn’t a large spender on IoT yet, more funding is expected by 2018. The main focus for these companies in their IoT efforts is marketing and monitoring the supply chain.

IoT Spend

In this sector, an average $41.2 million (0.2% of average revenue) was spent on IoT efforts in 2015. By 2018, the industry is expected to spend $67.6 million. 30% of the IoT budget is allocated to supply chain and around 26% is allocated to product and customer monitoring each.


Exhibit III-19: How CPG Companies Apportion Their IoT Spend

What Are They Spending On

Having already experimented with RFID technology to monitor the flow of goods, companies are now looking to implement other IoT technologies to make significant changes in supply chain management and marketing. 56.7% of CPG companies monitor production and distribution operations and track product flow using IoT technologies.


Exhibit III-20: Most CPG Companies Use IoT to Track Product Flow

Business Improvements

Creating more tailored products and services, and providing more proactive services by identifying the problem early on in the cycle are two important business improvements that CPG companies have recognized through IoT efforts.


Exhibit III-21: Top IoT Impacts at CPG Companies

Key Success Factors

The biggest key to success with IoT technology for CPG companies is identifying and acting on new business and revenue opportunities.

Changing management and staff thinking about the aspects of their business that
the IoT could change, winning top-down support for IoT investment, and speeding up decisions are of importance to the industry.


Exhibit III-22: Discerning the Biggest IoT Opportunities is the Key Success Factor