In the dynamic industry of fast-moving consumer goods (FMCG), compliance is a crucial element. It has a direct impact not just on a brand’s success, but also on the wellbeing of consumers and the environment.

The FMCG industry is characterized by rapid pace, global reach and diverse product offerings, operating within a complex web of national and international regulations and standards.

In this article, we explore the challenges facing FMCG brands today and look at how brands can seek to respond to ever-updating guidelines to achieve global regulatory compliance.

What challenges face FMCG brands trying to achieve regulatory compliance? 

There is an array of challenges that FMCG brands face in terms of regulatory compliance.

New and emerging markets have seen rapid development which, along with potential growth opportunities, also brings new regulatory challenges. for brands. For global expansion, brands are required to catch up to ensure they can establish the compliance architecture required to expedite this growth.

Coupled with this is a new breed of consumer – one more mobile, more connected and empowered by technology. This new kind of shopper necessitates a new way of connecting with them by brands, and new ways of regulating that connection too.  

As the cost-of-living crisis continues, FMCG brands are sharpening their focus on reducing costs, coupled with a desire to enter new markets and diversify into new products. These new revenue channels bring increased red tape and regulations for FMCG brands to comply with.

Against the backdrop of climate change and an increased focus on environmentalism, the FMCG industry has also seen a heightened focus on sustainability, including the responsible sourcing of raw materials.

With this comes higher, more rigorous levels of compliance required of FMCG brands.

Increased government regulation of products across categories, both harmful (e.g. tobacco) and non-harmful (e.g. foods and beverages). This evolving regulatory environment, designed to protect the consumer, brings with it a host of new standards and requirements for brands to adhere to.

How should FMCG enterprises respond to regulatory compliance risks?

Against this backdrop of increased compliance challenges, successful FMCG businesses will be those that focus their time and resources in getting familiar with – and ahead of – any upcoming changes.

This approach starts with a proactive response to regulatory risk. Here’s how: 

Outline your vision for your regulatory risk capability 

When creating a global regulatory compliance initiative, start by understanding the wider context in which your compliance needs to lie.

Has your business adopted a proactive approach to compliance yet? What specific factors are driving your increased focus on compliance? Has your brand built a process to understand and monitor new regulatory changes?

These questions will help inform the planning stage of your compliance self-assessment.

Alongside this, you should ensure all stakeholders involved in the process have their say. Different departments will bring different viewpoints to the table, and it’s crucial that these are all heard, acknowledged and used to inform your efforts.

Once all viewpoints have been heard and the wider regulatory environment has been assessed, you can start defining the goals of your risk management strategy.

Understand and analyze your existing capabilities 

Once your strategy has been laid out, take time to explore and assess the infrastructure, databases, and tools you currently have within your business.

Use this knowledge to build a picture of your resources and capabilities as they currently stand and identify if they currently support (or hinder) your regulatory risk.

At this stage, it might be useful to conduct a gap analysis to highlight how your existing compliance capabilities match up to what is required based on the market you operate in.

Create, test and roll-out your new compliance processes

Once you have assessed your current regulatory capabilities, now is the time to design, build and trial regulatory management tools to help drive your compliance strategy forward.

Predictive quantitative models, qualitative risk analyses, risk mapping – these are just a few examples of useful tools and processes that could be included in your strategy.

Alongside these tools, build out the policies and procedures you need to support them. Clearly delineate what responsibilities fall to which roles and make clear what those responsibilities might be.

As part of this, identify skill and capability gaps for anyone responsible for ensuring compliance is followed. Implement training to fill these gaps and encourage the adoption of your tools and policies through further training, open forums and informed leadership.

It is crucial that your tools, policies, role and responsibilities are thoroughly proofed and tested.

Seek out key stakeholders and invite them to review your processes, especially those in overseas territories. Their geography-specific feedback is essential for building out a rounded approach to compliance that covers all bases.

It’s also worth having conversations with external experts on FMCG compliance policy too. An independent, external viewpoint can help shine a light on potential pitfalls or missed considerations. 

Navigating global regulatory compliance for success

Creating a global regulatory compliance strategy in FMCG is not a one-off process – it is iterative, and will require multiple rounds of testing before it can be rolled out, plus constant monitoring to ensure compliance with ongoing industry updates.

While demanding, it is a necessity to ensure reliable and consistent compliance within your industry.

Once tested and approved, begin the roll-out of your tools, policies and compliance infrastructure into your daily operations.

Communication is essential here – keep all teams informed about new processes, and lean on your dedicated compliance leaders to encourage uptake of new policies across your organization.

Continue to upskill teams where appropriate and update your reporting processes to include your new regulatory targets and measurements. A proactive, always-on approach with regular reassessment is crucial for achieving global regulatory compliance.

Global compliance in the FMCG industry requires a dynamic, forward-looking approach to regulations.

At THG Ingenuity, our expertise and experience lie in ensuring our customers stay ahead of the changes in regulatory compliance. Leveraging our capabilities across technology, marketing and fulfillment, we build industry-leading compliance excellence into our customers’ infrastructure, so they can keep delighting consumers and driving business success.

Looking to build global regulatory compliance into your FMCG brand? Get in touch today.