Embracing Devolved Strategies: Devolution at the FMCG Policy Vanguard

In the dynamic landscape of Fast-Moving Consumer Goods (FMCG), staying ahead of the curve is not an option – it’s a necessity. Both the Welsh and Scottish governments are aware of the need for innovation, and have consistently used their devolved powers to implement policies that resonate with their populations. Devolution has empowered nations to craft innovative policies with more agility than what is often seen in Westminster, presenting both risk and opportunities to commercial organisations – and a clear business case to engage.

Operating in the FMCG sector often involves negotiating diverse regional and local markets, each governed by a unique set of policies, regulations, and political priorities. In such a scenario, a centralised, one-size-fits-all strategy will prove inadequate to address the complex interplay of regulations, cultural differences, and consumer preferences across regions. Companies are under constant pressure to innovate and adapt to stay relevant in the market, and adopting untested innovations on a large scale can be risky and costly.

This is where a devolved strategy comes into play. By enabling organisations to conduct small-scale experiments and trials within specific regions, they can assess the viability and effectiveness of new ideas, without the full commitment of a widespread rollout.

Devolved governments are often keen to innovate on policies and regulations, to prove they are driving towards positive reform at a faster rate than the rest of the UK. By aligning with a government that supports policy experimentation and trials, brands can not only gain a competitive advantage, but also help shape the regulatory landscape in a manner that benefits both their operations and society at large. This mutually beneficial relationship creates a platform for joint innovation, enabling companies to showcase their commitment to responsible business practices, while influencing positive policy changes.

As such, the implementation of a devolved strategy in the FMCG sector should be considered crucial for navigating the complexities of differing government priorities and regulations across markets. Businesses must tailor their strategies to local contexts – to facilitate innovation, but also to spot any regulatory risks coming down the track early, taking targeted action to intervene before we see a domino effect across the rest of the UK. A key example of this is the implementation of Deposit Return Schemes across the UK – the planned earlier roll-out in Scotland highlighted myriad issues with the scheme’s implementation plan and lack of preparedness, which industry was able to identify and feed into DEFRA officials, to inform the development of Westminster’s scheme down the track.

One region that has consistently demonstrated its commitment to innovative thinking in the FMCG sector is Wales, whether that be in relation to food and health, or packaging and recycling. Because of this, it’s imperative for businesses across the UK to engage with the Senedd, and view Wales as an early warning system for wider policy rollouts. A notable example of this is the introduction of the plastic bag charge, which has been instrumental in reducing plastic waste and promoting sustainable consumer behaviour. It was a landmark policy that not only had a local impact, but paved the way for similar measures to be adopted throughout the UK.

Where one UK nation moves first, the others very often follow – so smaller policy trials in the devolved nations can act as a helpful testbed to see what’s working well, what isn’t, and what revisions may be needed in the future, should a UK-wide policy be implemented.

By proactively engaging with the devolved nations at the early stages, and avoiding a Westminster-centric approach, companies will be better prepared for potential changes in policy or market conditions, minimising disruptions and maximizing opportunities. This is especially true if the expected policy alignment between Welsh Labour and a future UK Labour Government is fulfilled.

As organisations navigate this complicated terrain, it has become increasingly important to understand how decentralised policy-making will impact the FMCG sector’s future. Simply put, devolution can offer businesses the opportunity to collaborate with governments to better align with shifting regulatory frameworks, understand the preferences of consumers, and introduce innovative policies that contribute to a sustainable and prosperous future.

At Grayling, we are proud of our unique devolved network, with nine offices across the UK, including in Cardiff and Edinburgh. This means we can offer our clients live ‘on the ground’ intelligence, devising political communications strategies that account not just for the Westminster bubble, but for what’s really going on in every corner of the UK.

To find out more about our devolved offering, contact Math via: math.williams@grayling.com