Navigating waves of social change in the FMCG space

By Adam Thorn and Jerome Doraisamy|21 April 2020
Navigating waves of social change

Lawyers Weekly profiled four senior corporate counsel in the FMCG space to garner a better understanding and appreciation for a sector that, as the name suggests, presents a multitude of professional challenges for legal professionals.

“No two days are the same, and I am always on the go,” recalls L’Oreal Australia and New Zealand legal counsel Loren Goodwin.

“Each day I get to work with people at the top of their respective fields who are truly passionate about our brands and what they do. There’s a special energy you can feel as soon as you walk into the building.”

Many if not most corporate counsel we at Lawyers Weekly speak to espouse the idea that in-house life is fulfilling due to the variety and diversity of work day-to-day. However, in no sector does this appear to be truer than for those in fast-moving consumer goods (FMCG) – and not just because three in four interviewees for this feature told us so.

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In this feature, Lawyers Weekly is focusing its gaze on the FMCG sector and the myriad vagaries of such legal work, namely, how evolving sociocultural expectations from consumers are influencing not just the nature of in-house work for lawyers in this space, but the broader business direction of companies as well.

To do so, we spoke with Ms Goodwin, PepsiCo Asia Pacific legal director Lily Wong, Guzman y Gomez group general counsel Danielle Keyes and Who Gives a Crap legal counsel Kate Sherburn about the nature of life in-house at an FMCG business, the inherent issues and challenges, how regulation and social media have impacted upon the nature of their work, the imperative for successful cross-team collaboration as well as how these roles will evolve in years to come.

What the FMCG sector looks like

According to Ms Goodwin, the FMCG industry is “fast-paced and constantly evolving”.

“To be successful, brands must be nimble and constantly innovate their products and services to not only meet but exceed consumer expectations. Consumers are more connected than ever with a wealth of information to inform their buying choices via reviews and social media,” she explains.

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“New technologies and e-commerce are transforming the way that consumers experience, research, find and buy products which presents unique challenges and opportunities for FMCG brands.”

For her business in particular, FMCG has transformed the way that the L’Oréal Group does business, she notes.

“Data and artificial intelligence have enabled us to personalise and customise the way we engage with consumers – from our products to the experience on our websites. Our digital teams have partnered with tech start-ups and in 2018 we acquired our first tech company, Modiface, whose augmented reality and artificial intelligence technology [enable] make-up and hair colour try-ons and skincare diagnostics. For us, digital is not just a transformation; it’s a revolution”.

Ms Wong agrees on the breakneck nature of the work, labelling it “super fast-paced”.

“It’s really driven by the market and the customers, so I think in that sense you really need to be able to be agile and change your behavior and adapt to the changing market dynamic, so as to really ensure that the business is successful in the long term,” she muses.

“So, as part of our corporate strategy, we’ve had to always continually look at how we make, move, and sell products, and obviously that strategy and vision that we tried to implement [are] at the top of our minds as we execute what we’re doing on day-to-day.”

Life as an in-house FMCG lawyer is a “mixed bag”, Ms Wong continues, especially in businesses that have undergone or are undergoing necessary transformation to keep pace with marketplace shifts.

“We do everything from agronomy – which is studying and working with farmers to best get the most efficient and sustainable amounts of crops – to procurement, HR and taking the lead on all of our transformation projects. Whether you’re dealing with the sales team and enabling them to be as competitive as possible, or dealing with our customers, part of the transformation journey means being a key partner in each of the projects,” she says.

Ms Keyes supports the notion that “no two days are the same”, and there is perhaps no better demonstration of this than in the need to navigate sociocultural turbulence. Such external forces, she notes, have a huge impact upon FMCG businesses.

“In the supply chain, there are events that can have a catastrophic impact on supply, such as floods, fire and drought. I don’t know the impact of the coronavirus yet, but there’s no doubt there will be something, I suspect. African swine flu, for example, affects the pork supply. So, there’s all these things that impact upon the supply chains which [create] an additional layer of complexity of working within this sector,” she says.

Regulatory challenges

FMCG is “an incredibly fluid space”, Ms Keyes espouses, with voluminous media attention and regulatory scrutiny in the space.

“We’ve got big regulatory buckets: food, franchising, employment and consumer. Those spaces are really under the spotlight at the moment and we kind of fall squarely into all four of them. So, there’s real challenges I think that come with being able to get on with business and do all of the things that the business wants to do to keep growing,” she notes.

“Making sure there’s the right resources in place to manage and work within the regulatory frameworks, and ensure we’re getting the right advice from industry professionals and we’re hiring the right people in the relevant roles to make sure that we have that depth so that we can successfully operate within those frameworks, [are] fundamental given that we are experiencing an incredibly turbulent moment [for the sector].”

What can sometimes be onerous, Ms Sherburn highlights, is that regulatory changes can “move so quickly”, compounding the need to stay on top of what’s happening domestically and internationally.

“It’s not just what’s happening in Australia, it’s what’s happening in every market that we’re involved in and making sure that we’re complying with everything. That is a big challenge. The key to that is to make sure there that you plan,” she muses.

“There’s never a day that’s the same with this job, and so there’s a duty to maintain the right balance and make sure that we’re not exposing ourselves unduly to risk and staying protected. It’s something you have to figure out in-house… Sometimes, the black and white legal answer is not necessarily the correct approach for the business to take.”

Ms Goodwin supports this, advising that year-on-year, the regulatory frameworks governing FMCG organisations become more complex and nuanced “even more so for global companies operating across multiple markets. This doesn’t just impact our marketing teams, but our entire business and supply chain.”

“For example, in recent years there has been the introduction of the Grocery Code of Conduct, the European General Data Protection Regulation and Australian Mandatory Data Breach Notification law, Illegal Logging Prohibition Act, changes to whistle-blower laws and the Modern Slavery Act – to name a few!”

It is therefore incumbent upon her, she submits, to “proactively monitor proposed local and international regulations and help the business navigate this”.

“I work closely with our teams in advance to assess current processes and systems to minimise disruption to business and our supply chain on implementation. This often involves collaborating with our legal teams in other markets to establish the broad ‘frame’ which is then adapted locally to ensure local regulatory requirements are met. This is not always an easy feat,” she says.

CSR and innovation in the modern world

Adapting to an evolving sociocultural landscape presents difficulties for counsel in this space, particularly with regard to changing consumer expectations around environmental friendliness.

The explosion of social media across the globe has allowed the average consumer to communicate to the masses in ways they’ve never been able to do before, Ms Keyes says, which subsequently adds a new layer of responsibility for businesses in the FMCG space.

As Ms Sherburn puts it: “You have to be across things as soon as they’re being spoken.”

“People definitely have more input and opinions about the way that brands that they support should act, what they should do, and where we are conditioned as well. I mean, we are positioned as an environmentally friendly organisation and our customers are going to be skewed to that anyway, they’re going to be socially aware sort of consumers in the first place. But I think the companies that do put themselves out there as being ethically and socially aware actually almost get put on a higher pedestal and have more scrutiny, because you are saying you’re doing the right thing. So, our customers want to make sure that we are doing the right thing and we’re not just talking the talk. They want to make sure that we’re actually walking the walk as well,” she explains.

Consumers are expecting more, Ms Keyes adds, and moreover they’re able to demand that in a public space.

“Guzman y Gomez is a company that – certainly I, as a lawyer – I feel very comfortable about when compared to some brands that, behind the scenes, don’t operate as well as they appear to on the outside. [For GYG], there’s a lot of investment in health and treating the staff right and not cutting corners. It’s made life easier for me as a lawyer, because the business itself is making sure that it is innovating and changing and listening to what consumers want and trying to give them what they want and engage with them,” she notes.

“That’s been a real challenge for us,” Ms Wong recounts.

“There’s a lot of innovation being put into place to make sure that we move with our changing customer demand and expectations. This involves, firstly, the health front, and secondly, having a corporate strategy on sustainability. Our role as lawyers [in these circumstances] is not simply to say, ‘This is what the law says, and this is what the regulation says’. We have to be a strategic partner to enable the business to continue to be competitive and to ensure the long-term sustainability of it, because the customers are always expecting the new innovation, new products, better types of products as well as understanding what we are doing with plastics that we generate or use as part of the manufacturing process.”

As part of her role, Ms Wong notes that she joined PepsiCo’s sustainability and environment committee, which has a long-term goal to achieve “zero waste to landfill by 2025 but we’re 2020 now”.

“It’s our one planet at the end of the day, and we all get lost in the rat race and there’s been a lot of focus in the media lately, but it’s something we’ve been conscious of, but it’s important [in businesses like ours] do to it in a way that’s sustainable,” she says.

Moral imperatives aside, such projects also present enormous innovative opportunities. This has been the case for Ms Goodwin, who notes that driving legal innovation is “one of the most exciting aspects” of her role.

“Innovation and entrepreneurial spirit are core values of the L’Oréal Group, and as a legal team we absolutely embrace this. I love that I get to utilise my ‘right-brain’ creativity, intuition and imagination in my role as in-house legal counsel,” she says.

“Since 2015, our team has been transforming the way we support the business through automation of routine legal tasks and agreements, digitisation of the function and use of data analytics to drive efficiencies. We currently have 15 bespoke self-service business facing legal apps which generate contracts (e.g. influencer agreements, services agreements, complex customer contracts) and automate workflows (e.g. contract approval and e-signature). I have had the opportunity to lead the development of several apps, with direct involvement across the entire automation process from contract and process simplification, defining app logic, mapping workflows, designing user experience and implementation.”

Working across the business

Cross-team collaboration is inextricably linked to the success of an FMCG business, but is not without its difficulties, muses Ms Wong – particularly when you are a larger brand and have to interact not just with teams across the nation, but abroad too.

“It’s a challenge to make sure that everyone is heard and then work with them. It’s important to be bold enough to be able to ask questions along the lines of ‘Why are we doing this’, which is a really valuable skill to have, and also necessary so that other teams ensure they are listening to the lawyers. Commercially, it’s crucial to take a step back and ask, ‘Why are we doing this again?’ I’ve done that a couple of times, to make sure that we’re aligned to our core purpose and strategy,” she says.

Within the Pepsi business, Ms Wong continues, the legal department has been able to develop a strong working relationship with the sales function, with the latter “always coming to talk to us in terms of any potential issues”. Similarly, the marketing team is now engaging with legal on advertising concepts.

“There’s always room for improvement, but [it’s important to] really drive that message home: partner with us. Factor us in into your project timeline, because there’s no use coming to us later on after people have already commercially agreed, done the deal, filled everything and you just want us to document it, that isn’t how it works. You need to be able to engage with us a lot earlier so that we can leverage whatever it is that you’re trying to negotiate so that we can be in the best possible position,” she says.

Ms Goodwin backs this up, noting that support for the business’ marketing team represents one of the largest components of the work needed to be completed by the GC and their legal team. This necessarily includes, she outlines, advising on “everything from engaging talent/brand ambassadors, new product launches, brand activations and consumer promotions and competitions”.

“The volume of marketing content and consumer promotions increases each year as the group acquires more brands. As a legal team, we have had to think outside the box as to how we can efficiently and effectively manage this increase in workload, in addition to the rest of our ‘business as usual’ matters,” she reflects.

“We have partnered with our legal tech provider, Plexus, to launch two business-facing legal apps – we currently have 15 apps in total – to assist with marketing compliance: one which provides our marketing teams with competition terms and conditions and more recently another which enables review of marketing collateral and flags any issues – both within 24 hours. The marketing team can access these apps from any device, anytime, anywhere to get almost instantaneous legal support. This has had a huge impact for our business and enabled us to do more with less while still managing legal risk.”

When it comes to cross-department collaboration, Ms Keyes puts it in a different light: “the struggle is real when lawyers and creatives collaborate!”

“It took some time to really penetrate the mindset of the business. Initially, I had to be up in their face, shaking everyone down and making sure that I was part of those discussions early, rather than leaving it [and allowing] things to get bottlenecked in legal. So, there’s been a really nice transformation in the business, and now – as the head of department – I sit with all the other department heads and can actually be involved in commercial discussions with them. They appreciate that there is always legal risk in everything and they actively seek my input,” she says.

Looming evolution of the role of FMCG lawyer

With all of the aforementioned challenges currently being faced by FMCG lawyers, Ms Sherburn feels the imperative to be involved across the business will remain integral, if not increased.

“It’s so important that when everybody starts [in the business], they have a one-on-one session with every business unit. I present every couple of months, and it just introduces you. Explain what you do and why you do it, so that there is no distance with legal. The earlier that you get involved, the less likely it is that I’m going to have to say no,” she says.

“Because, ultimately, we don’t want to say no. We just want to make sure that the companies we work for are protected. The earlier that people come, the more we can work together to get what they want, or as close as we can get to that.”

The lesson, therefore, is that if FMCG businesses can better engage with legal, “we can get to a point where we’re all kind of happy”, Ms Sherburn surmises.
Looking ahead, Ms Goodwin believes that the role of in-house FMCG lawyers will continue to expand in line with regulatory and business environmental changes – not to mention, of course, the sociocultural factors impacting brand strategy.

“As the workload continues to increase, being a strong technical lawyer will not be enough. Embracing technology to automate routine manual legal tasks will no longer be a ‘nice-to-have’ but a must-have. An effective FMCG lawyer will not only advise on the law, but drive value for the business as a true business partner,” she posits.

“To do this, in-house counsel must have an open and curious mindset and demonstrate empathy. Upskilling in areas outside of the strictly legal will enable lawyers to better understand the functions they advise rather than operate in a silo – for example, take a course in digital marketing or spend time with the retail teams on counter to experience first-hand the challenges they face.”

For Ms Wong, the role of the in-house FMCG counsel will increasingly become one whereby that lawyer is a strategic partner for the business.

“I see that playing out more and more… as you become more senior in the organisation, you will have that voice and confidence to be able to have those conversations with relevant stakeholders and influence the business’ direction. I see that as being key and it will continue to be an issue for in-house lawyers in this space in the future,” she says.

Conclusion

When asked about some of the challenges one faces as an in-house FMCG lawyer, Ms Goodwin responds that: “Our brands are constantly innovating and pushing boundaries which [mean] as in-house legal counsel I am often required to advise on things which haven’t been done in the market before or contemplate novel legal questions which have no clear-cut answer. I enjoy the intellectual challenge of problem-solving where things are not black and white – I get to practise law in full colour.”

That notion of getting to practice the law in full colour seems to sum up how those in this space feel about the breadth and scope of their daily work. The FMCG sector continues to evolve at breakneck speed, placing burdensome pressure upon the legal professionals at the helm. But, evidently, it’s a challenge that they’re more than willing to meet in a sociocultural landscape that can and is impacting upon the direction of the marketplace.

Navigating waves of social change in the FMCG space
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