The clue is in the name: fast-moving consumer goods (FMCG) companies must constantly adjust and innovate to meet shifts in consumer demand and changing regulations. This is an industry that is particularly exposed to supply chain disruption.

And disruption is having a material financial impact on businesses. Maersk’s latest research, Course for Change, reveals that the average FMCG company lost 3.7% of its revenue to disruption in its most recent fiscal year. With regulatory non-compliance posing a material financial risk, businesses must rethink their approach to resilience.

Our research compares ‘frontrunners’ (companies that experienced losses of less than 1% of revenue in the past fiscal year) and ‘followers’ (companies that experienced losses totalling more than 5% of revenue). How are these two groups responding to disruption?

Regulators and consumers shall become more vigilant

The FMCG industry operates in a maze of rules governing everything from raw materials from sourcing raw materials and designing packaging to ensuring downstream compliance and product safety for the end consumer. This creates risk for businesses and means compliance is high on their agenda: 41% say that understanding regulatory compliance and geopolitical risk management is a top three priority for resilience over the next one to two years.

But compliance is not straightforward. Rules about traceability, including the Chinese Import and Export Food Safety Measures, and ESG disclosure requirements, such as EU Deforestation Regulation, require audit-ready data and multi-tier oversight.

Consumer expectations are adding to the complexity. Ingredient-scanner apps such as Yuka – which allows shoppers to scan products for information on ingredients and their potential risks – and similar platforms are empowering consumers to make more informed purchase decisions. This, in turn, raises reputation risk for FMCG companies.

To manage these challenges, documentation, routing and emissions accounting considerations must be embedded in trade and logistics flows. This means end-to-end visibility, as well as greater flexibility over suppliers and logistics, are now strategic imperatives.

How can FMCG companies build regulatory resilience?

About nine in 10 FMCG companies say that disruption is forcing a new approach to resilience. Regulation is an important driver of this rethink, with new environmental, social and product standards increasing pressure to prove compliance across products and regions.

Frontrunners are responding by ensuring they are able to pivot sourcing as new obligations emerge, they are eight percentage points more likely than followers to say that being able to switch sources and suppliers would help them to balance agility with long-term stability.

“Sourcing flexibility is crucial," says Jacob Nielsen, Chief Procurement Officer at Nestlé and CEO of Nestrade. "In an ideal situation, we qualify multiple suppliers across regions and allocate volumes dynamically. The cheapest buy means nothing if the production line stops – flexibility keeps the cost of goods sold turning.”

But flexibility is just one part of the solution. With regulatory duties extending far beyond first-tier suppliers, companies need real-time oversight across their networks to identify and address compliance risks before they escalate. And as regulators demand greater transparency, visibility has become the bridge between compliance and resilience. Here, the frontrunners are ahead: 41% say real-time visibility will help them balance agility with stability, compared with just 17% of followers.

Many are using technology to embed visibility into their operations. More than half of frontrunners (55%) are developing dashboards to track compliance metrics and optimise costs, compared with just 27% of followers.

Collaboration is the new compliance advantage

Due diligence, reporting and traceability requirements demand a level of transparency that few companies can deliver alone. That’s why almost nine out of 10 FMCG companies (88%) say that partnerships are crucial for preparedness and strategic flexibility.

With real-time access to reliable information critical to achieving this level of transparency, data sits at the heart of these partnerships. But it is the number one resource FMCG companies say they lack that would help them build agility and long-term supply chain stability.

Frontrunners recognise that data sharing is only the first step. These businesses are turning to their logistics service providers (LSPs) to turn data into action: 62% say partnering with LSPs for supply chain management solutions, such as third- and fourth-party logistics, can enhance supply chain resilience. Just 29% of followers say the same.

“Collaboration with the logistics providers is a real source of resilience,” says Nielsen. “They have a unique vantage point from serving multiple clients, so they are able to spot emerging pinch points before we do. By sharing data and insights across networks, they can offer visibility over disruption that a single company might not be able to achieve on its own. This collaboration is important to mitigate supply risks.”

To build and sustain supply chain resilience in today’s operating environment, FMCG companies need to put regulation at the centre of their supply chains. Multi-tier visibility, robust data and collaborative partnerships will help to ensure that products are sourced and moved in line with regulations. Companies that operationalise this now will move faster and trade more efficiently, and this will protect both their revenues and their reputations. Today's consumers expect nothing less.

Supply chain imperatives for regulatory resilience

1. Map and trace across tiers: Extend visibility across tiers to ensure end-to-end regulatory compliance.
2. Partner for visibility: Collaborate with suppliers and logistics service providers to share data and strengthen regulatory oversight.
3. Monitor and document: Use tools such as dashboards and control towers to track compliance metrics and maintain audit trails.

Be ready for intelligent supply chain resilience to go all the way! Explore the full Course for Change report and learn more about Maersk Supply Chain Resilience Model, or for more logistics trends and insights, read and download The Logistics Trend Map.

About FT Longitude

FT Longitude is a specialist thought leadership agency, owned by the Financial Times, working with a wide range of the world’s most prestigious B2B brands across Europe, the US and Asia-Pacific. FT Longitude’s 80+ clients are concentrated in the professional services, financial services, and technology sectors, but also stretch into energy, infrastructure, manufacturing and other industries. Headquartered in London, the company was founded in 2011 and was selected as one of Chief Marketer 200, Top Marketing Agencies of 2020, an Inc. 5000 Europe in 2018, an FT 1000 company in 2017, and a 2016 Leap 100 high growth UK company by City A.M. and Mishcon de Reya. It is led by founders Rob Mitchell (CEO), James Watson (COO) and Gareth Lofthouse (Chief Revenue Officer). For more information: visit longitude.ft.com.