The stakes have never been higher for procurement and supply chains in the consumer sector. From fashion to fast-moving consumer goods (FMCG), retail and travel & tourism, organizations across industries are grappling with rising costs, shifting consumer expectations, and increasing scrutiny on sustainability practices. Each sector faces unique challenges, but shared pressures, such as supply chain vulnerabilities and inflationary pressures, create an urgent need for strategic transformation.
A recent survey by BCG sheds light on the scale of these challenges: Among 32 procurement leaders across consumer-facing sectors, only 41% actively track the execution of their procurement strategies, leaving significant room for improvement in achieving long-term savings and operational efficiencies. Furthermore, supplier risks remain largely unmanaged, with 34% of respondents lacking a formal supplier risk management process. These findings underscore a troubling reality—many organizations are not adequately equipped to navigate the complexities of today’s consumer landscape.
In 2025, the spotlight will be on procurement teams to address these gaps and drive meaningful change. Drawing on insights from INVERTO consumer procurement experts, we have identified five key areas organizations must prioritize to stay competitive and navigate the complexities of 2025. In this article, we delve into each, exploring actionable insights and strategies for procurement and supply chain leaders to succeed.
Building Agile, Resilient, and Consumer-Focused Supply Chains
Global disruptions—from geopolitical tensions to climate events—continue to expose vulnerabilities in consumer supply chains. With social media accelerating trends and amplifying consumer expectations, procurement teams face growing pressure to adapt quickly. To tackle these challenges, a layered approach to resilience is essential. For instance, cost pressures from tariffs introduced during Donald Trump’s administration significantly impact industries heavily reliant on Asian sourcing, such as fashion. These tariffs strain global sourcing strategies, forcing companies to reevaluate supplier relationships and adapt to rising costs. As a result, nearshoring and regional sourcing emerge as logical starting points, reducing reliance on distant suppliers, mitigating geopolitical risks, and enabling faster response times.
However, true resilience goes beyond proximity—diversifying supplier bases adds flexibility, while agile supply chain design allows companies to respond nimbly to demand shifts. As trends now spread rapidly online, short lead times are not just beneficial—they are critical to success. Advanced risk management technologies, such as AI-driven predictive analytics, complement these efforts by monitoring supplier health and forecasting disruptions like port closures or material shortages. To complete the picture, inventory strategies should leverage real-time data, balancing just-in-time efficiency with the need to avoid costly stockouts.
Cost excellence amid inflationary pressures
Inflation and soaring raw material costs have placed unprecedented pressure on consumer businesses, where razor-thin margins and price-sensitive markets leave little room for error. Procurement teams face a pivotal challenge: balancing immediate cost-saving actions with strategic initiatives that safeguard long-term competitiveness.
This urgency is underscored by the sharp rise in indices for critical raw materials like cacao and aluminium, with cacao futures skyrocketing 144.77% year-on-year to $11,173.67 per metric ton as of January 2025¹. For FMCG companies, these cost surges are compounded by climate-driven disruptions, such as plant diseases that devastate cacao crops, leading to severe supply shortages and price volatility.
Amid these challenges, structured and continuous cost optimization has proven critical. A BCG study reveals that organizations with dedicated cost management programs achieve 62% of their savings targets, compared to just 43% for those relying on ad-hoc measures². This striking contrast demonstrates the tangible value of a proactive, disciplined approach to cost control—one that separates leaders from laggards in today’s volatile economic landscape.
Success requires more than negotiation. Category-specific strategies enable industries like fashion to recalibrate supplier contracts, preserving brand integrity while driving cost efficiencies. Advanced working capital management, powered by AI, ensures liquidity and reduces waste, while sustainable initiatives—such as reducing packaging or adopting energy-efficient technologies—offer dual benefits of cost reduction and enhanced consumer trust. Together, these efforts empower procurement leaders to combat inflationary pressures while strengthening resilience, protecting margins, and maintaining unwavering quality standards.
Leveraging AI and Technology for Consumer-Specific Efficiencies
Technology is transforming procurement at an unprecedented pace, creating opportunities to drive efficiency and enhance decision-making. While many discussions focus on large-scale AI implementations, consumer companies can achieve significant efficiencies by starting with targeted, manageable projects. For instance, procurement departments can use AI to draft supplier communications, simulate role-play negotiations, and brainstorm arguments or counterarguments for supplier discussions. These smaller-scale initiatives make AI adoption less daunting and provide immediate value.
The integration of AI-powered demand forecasting, for instance, enables companies to manage seasonal peaks more effectively, reducing overstocking and stockouts. Sustainability tracking tools provide additional value, ensuring real-time monitoring of supplier ESG performance and alignment with both regulatory demands and consumer preferences. Beyond planning and compliance, automation has become a game-changer in simplifying complex processes like supplier negotiations and category management. Together, these advancements not only optimize day-to-day operations but also enable procurement teams to build supply chains that are both resilient and responsive. The result is a streamlined operation that enables rapid adaptation in the fast-moving consumer sector.
Embedding Sustainability into Procurement Practices
Sustainability has shifted from a “nice-to-have” to a business imperative, but its poor execution carries significant reputational risks. In today’s hyper-connected world, a single misstep can ignite widespread backlash on social media, making transparency and accountability more critical than ever. While immediate priorities for many companies may currently lie elsewhere—such as cost management or supply chain resilience—these priorities often align. For example, sustainability initiatives like investing in energy-efficient technologies or reducing raw material waste can simultaneously lower costs and carbon footprints.
Regulatory pressures, like the EU’s Corporate Sustainability Reporting Directive (CSRD), and growing expectations from investors ensure that sustainability cannot be sidelined for long. To embed sustainability into procurement practices effectively, companies must adopt holistic approaches. Circular procurement models, emphasizing recycled materials, reuse, and repair, offer practical solutions for industries like fashion and consumer goods. Partnering with suppliers committed to low-carbon goals is another priority, especially in emissions-intensive areas like logistics and manufacturing. By balancing affordability with proactive planning for regulatory compliance and investor demands, companies can meet evolving expectations while safeguarding their reputation and future competitiveness. Transitioning procurement to embrace sustainability requires not only strategic planning but also elevated capabilities within the function itself.
Elevating Procurement Capabilities
Procurement is evolving from a transactional function to a strategic driver of value, but this shift requires a deliberate focus on capability building and collaboration. Upskilling programs in areas such as category management, sustainability, and risk evaluation equip teams to navigate increasingly complex challenges. However, skills alone are not enough. Cross-departmental collaboration—ensuring alignment with marketing, finance, and operations—accelerates innovation and improves time-to-market for new initiatives. The adoption of advanced technologies, coupled with enhanced digital literacy, empowers procurement professionals to make informed, data-driven decisions. By addressing these areas, procurement teams can elevate their influence, becoming pivotal contributors to broader business success.
