Product and advertising claims are vital to growing market share across competitive CPG categories. Take, for example, brands that are asserting that their products are “sustainable.” Surveys show that more than half (55%) of global consumers are more likely to buy products with labels such as “responsibly produced” and “sustainably sourced”, and brands are rushing to align with this consumer preference.
While attention-grabbing packaging is a priority for brands, it carries risk and many have faced scrutiny from regulators and consumers amid an increase in false or misleading information. In the sustainable products space, complaints alleging fraudulent environmental claims increased 280% between 2017 and 2022.
Fraudulent claims are rarely intentional. Rather, they’re often the result of errors that are all too common since many companies still manage claims and substantiation using disparate tools such as email and spreadsheets. This makes it tedious to review and approve language, and difficult to quickly access the documentation needed to substantiate claims if they’re challenged.
There’s a clear opportunity to overcome these challenges: CPG companies can modernize by adopting purpose-built cloud-based solutions for claims management that increase efficiency and reduce errors.
John Cooper, a strategy director at Veeva, brings direct CPG industry experience to his work with Veeva’s product team to design and build solutions to address this pressing need. In the interview below, he shares what he’s experienced and observed that hinders effective claims management in the CPG industry, and explores how modernization is driving long-term value.
Kera Binns (KB): Thank you for joining us John. I’m excited to talk to you about your background and how you’re applying your industry knowledge to move the CPG industry forward in this important business area.
John Cooper (JC): My pleasure.
KB: Let’s start by discussing what obstacles are preventing successful claims management in the CPG industry today.
JC: There has been very little evolution in how claims are managed since I first joined the CPG industry as a brand marketer 20 years ago. For 90% of the companies we talk to, regardless of size, they’re using spreadsheets in platforms like Excel to manage claims. Usually, there’s a different spreadsheet for every brand or product, which creates silos.
Substantiation used to prove statements are true is disorganized. And traceability is particularly challenging because of the cross-functional teams involved. Marketing, legal, regulatory, and research and development teams all need to vet claims. Yet without centralized visibility, it’s hard to keep track of where they are in the approval process, and if and when a claim was approved.
This is largely unchanged from when I was working in CPG. I would often have a PDF copy of the master claims spreadsheet or even a printed hard copy. Marketing was not permitted to access the master sheets for fear of us making changes or accessing highly confidential substantiation information.
KB: Thanks for that insight. Taking a step back, why should improving claims management be a priority for CPG brands?
JC: There’s a new level of urgency for better processes because claims are becoming more complex as consumers’ product preferences change. People want to understand more about the products they consume. In fact, 63% of U.S. consumers pay more attention to ingredient lists than they did more than five years ago, and 56% avoid buying foods or beverages with chemical-sounding ingredients.
Consumer expectations are higher than ever, too. As soon as a new trend emerges, people expect a new product on the shelf. CPG companies can’t take years to launch a new item anymore. At the same time, companies can’t afford to use a claim that hasn’t actually been approved, or run into delays because they couldn’t find the substantiation they needed.
More efficient claims management can directly help get products to market more quickly. We’ve had customers who have reduced the time spent in cross-functional meetings by more than 70% because they can accomplish much of the work within our claims management application.
KB: Sounds like there’s a strong case to be made for including this business process in companies’ digital transformation initiatives. Getting more specific, what would you say is unique about Veeva’s claims management solution?
JC: Claims are incredibly complex, and software can really help make sense of the complexity. Simply understanding which brands or products around the globe have the same claim approved for use is not easy to determine without a claims management solution. Searching across multiple spreadsheets in different locations around the world is not practical. So companies are often left in the dark.
Furthermore, substantiation can often be reused for different claims. However, this isn’t happening because the information, too, is siloed in folders and shared drives. Companies often redo testing for substantiation that already exists.
Finally, companies really struggle with localization of global claims. Claims often require subtle changes to language or footnotes—different marketing channels may be permitted in different countries, and translations all have to be stored alongside the parent claim. This is all possible with a purpose-built solution, but is incredibly difficult to manage with current processes.
Our solution—Veeva Claims—is anchored in a cloud application development platform that unites data, documents, and workflows. Informed by our discussions with customers, and our team’s direct experience working in CPG, we developed this solution because we knew claims were a significant industry pain point. The advantage is that, currently, there’s no other application uniquely designed for claims management. This makes a huge difference for companies that struggle to use applications that aren’t designed for this process.
KB: That’s very helpful context. Turning to how CPG customers are using the solution today, how do you and the rest of the Veeva team work with customers to uplevel their claims strategies and drive value?
JC: We’ve helped CPG customers radically transform the way they operate because the data and documentation they need to substantiate claims and understand where those claims are used is now at their fingertips. This not only helps companies save time and operate more efficiently, but it’s also making them more confident. If they can locate relevant substantiation documents, and know where certain claims are used, they can be more aggressive in the language they use because they know they can react quickly if needed.
Another major challenge for some of our customers is onboarding claims from a smaller company they’ve acquired. Smaller companies are often more lenient when it comes to claims, which puts the pressure on the acquiring company to verify all substantiation. One of our large CPG customers found that they spent 50% less time verifying an acquired company’s claims using Veeva.
KB: Impressive! So if someone working in claims management in the CPG industry wanted to kickstart the journey to modernize their claims processes, how should they get started?
JC: If there’s one step companies can take, it’s developing a single source of truth for data, and having that source live in a cloud-based system. To move away from fragmented processes, there has to be one hub for claims that’s accessible to all pertinent teams. Using a cloud-based system is ideal because you can access it from any device, it’s always up to date, and there’s only one version. This is the foundation for CPG brands to improve their claims processes and, ultimately, to drive better business outcomes.
KB: Well, this has been really helpful. Thanks again for taking the time to speak with me today. Anything else you want to share before we sign off?
JC: It’s been my pleasure. I’ll just close by saying that transforming claims management can be a challenge because there are so many functions involved in the process, and ownership may not be clear. However, given the increasing complexity of claims today and compressed product launch cycles, it’s a process that really has to be moved to the front of the line for digital transformation.
Interested in learning how you can modernize your claims management strategy? Reach out to John to explore your unique circumstances and needs.