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The Game-Changing CPG Industry Trends of 2020: Learn what Infiniti’s Experts have to say

The consumer-packaged-goods (CPG) industry has struggled to grow over recent years. While the sector saw consistent growth over a decade ago, it faces a variety of challenges currently. The CPG industry is highly competitive and maintaining market share can be difficult in an uncertain market. With its recent shift to the digitization and the direct-to-consumer approach, the competition, and the need to develop targeted marketing strategies have risen simultaneously. Additionally, as the COVID-19 pandemic continues to affect the world, every industry faces significant changes.

The CPG industry needs to revamp its marketing approach before it is too late. Various CPG industry trends have surfaced over recent months, and any one of them could be a significant game-changer for the industry. As consumers’ buying behavior, spending patterns, and needs change, so should CPG marketing.

Over the beginning of 2020, the COVID-19 pandemic took a substantial toll on many industries and most markets, the consumer-packaged goods industry being one of them. Due to COVID-19, the CPG industry has changed its approach, and CPG marketing has been revamped and adopted a new strategy. Digital dependence has increased over the recent decade, and many industries have realized the benefits of the platforms digitization offers. Digitization is one of the most critical changes in the industry and has influenced every trend over recent times.

Another major challenge for smaller CPG companies is acquiring market share. As many top CPG companies continue to hold a significant market share in the industry, smaller companies analyze their strategies and attempt to adjust. In this article, Infiniti’s research experts discuss the industry trends that are changing the face of CPG marketing, as well as the biggest differentiator in the top CPG companies.

The CPG industry is currently facing a plethora of challenges, and Infiniti provides the ideal solutions to overcome them. To learn how Infiniti Research helps CPG companies gain market share, request a free proposal.

CPG Industry Trends of 2020

Game-Changing CPG Industry Trends

CPG industry trends have reformed the approach of companies towards marketing, consumers’ needs, and making an impact. The following four CPG marketing trends are the major game changers of the industry, and all companies need to understand and implement this into their marketing strategies.

Digitization and Omnichannel Marketing

With the constant advancements in technology and the ongoing COVID-19 crisis, how consumers interact with purchasing has changed drastically. The ability to provide products and services direct-to-consumer is highly sought-after. Efficiently executing operations over digital interfaces is a challenging prospect. It requires significant investment and multiple strategic and operational changes. However, the ROI, if efficiently executed, has proven to be worthwhile across industries. As companies compete for top rank on search engine result pages, a significant portion of the consumer packaged goods industry has very recently shifted to a digitized approach. This trend has changed how companies interact with consumers, how supply chains function, how key performance indicators are identified, and consumer needs and demands.

Digitization has also presented itself in marketing, moving many CPG industry players to an omnichannel marketing approach. This is the combination of traditional marketing, and an addition of newer platforms, and efficient consumer-centric environments. A comprehensive digital marketing approach can keep a company far ahead of the curve.

Personalization of Products and Services

The personalization of products and services has been a significant recent CPG industry trend. It creates a more personable experience across all ages and provides consumers with an experience. In recent times, experts have advised a focus on personalization of products and services. Providing customers with the ability to specify their wants and needs, such as a user-friendly website, can increase customer satisfaction substantially. Having both the company and the consumer investing time and energy into this personalized product reduces the chances of customer churn significantly and increases brand loyalty. It also helps companies learn consumers’ preferences, and habits, and use this data for future product design.

Sustainability in the CPG Industry

As global warming and the environmental crisis become real and overshadowing issues across the globe, consumers and companies have started taking a step towards reducing damage. Sustainable packaging and sustainable products are in high demand, as are companies that promote an important cause. Millennials and Gen-Z account for a large portion of consumers and create a mostly cause-driven environment for consumers and companies.

The CPG industry has started to invest majorly into sustainable practices, most evidently in terms of packaging. The reason for this is, though many companies want to make a change, revamping an entire product line to be sustainable is not viable. This is the reason various companies are turning to sustainable packaging, as well as the reason many sustainable start-ups are starting to dominate smaller markets. To stay ahead of the curve, CPG industries across the globe need to move to more environmentally friendly practices.

Brand Values and Social Causes

On a similar note as the previous point, brand identity and values have become a significant focus in the CPG industry. Millennials and Gen-Z find it more attractive and appealing to not only purchase, but also promote products and services from companies that share their values. Many CPG industry players have started to support various social causes on social media. Supporting a social cause is one of the crucial criteria for consumers’ brand loyalty. Additionally, having brand values that are widely accepted help organic engagement and impressions grow exponentially. A social media feed that further promotes and displays these values is highly beneficial for brands. Also, when companies choose to donate, assist in a crisis, or support groups in need, it is highly desired by consumers across the globe.

These and many other CPG industry trends have overwhelmed the market, to understand how they influence your company, get more information.

What sets the Top CPG Companies apart?

Several top CPG companies have maintained sales, customer retention rates, and market share continually over the past few years. CPG companies across the globe are attempting to attain the same. Infiniti’s research experts suggest market intelligence solutions. Analyzing, understanding, forecasting, and identifying crucial data for companies, market intelligence experts help some top CPG industry players achieve sustainable growth. Market intelligence solutions span wide in the functions they serve. Implementation is critical, and with our experts, some of the top CPG companies have implemented market intelligence solutions in the following ways:  

  • Target consumers: Digitization and efficient data management systems allow companies to procure and utilize information on the preferences and habits of their consumers. This enables efficient product development, and with focused segments, it provides for effective CPG marketing. Market trend analysis allows the top CPG companies to understand their consumers and develop comprehensive marketing strategies.
  • Staying ahead of market trends: By leveraging market scanning solutions, top CPG companies stay ahead of market trends. They stay informed on supply-demand shifts, track emerging market trends, keep tabs on target market segments, and gain insights on the impact of these factors. This helps them efficiently prepare and avoid losses or customer churn by strategizing prematurely.
  • Market Intelligence: Leveraging market intelligence solutions enables the top companies in the consumer-packaged goods industry to prepare for every barrier in the market. It also allows them to efficiently forecast changes, strategize, and prepare for CPG industry trends while also understanding consumers’ preferences and maintaining large market shares. Market intelligence firms such as Infiniti Research help CPG companies enhance sales and reduce churn rates significantly.

Being a leader in an industry as competitive as the CPG industry is difficult but achievable. To learn how companies can succeed in this industry, speak to our experts.

CPG industry challenges

Preparing to Combat CPG Industry Challenges in the US Due to Coronavirus

As the COVID-19 situation unfolds across the globe, it presents new operational and leadership challenges for CPG companies. As a result of the crisis, there is a seismic shift in the way consumers shop and what they shop for, creating new CPG industry challenges. The US has seen an exponential increase in the coronavirus cases over the last fortnight. This has left players grappling with new CPG industry challenges relating to how to manage the demand-supply inadequacies, formulate an action plan to turbocharge logistics flexibility, and to adjust the existing commercial strategy to suit the new norms. To address the crisis head-on and ensure business continuity, companies must respond to these new CPG industry challenges by quickly rolling out contingency plans while doing their part to minimize the spread of the virus.

Lessons for US CPG companies from other infected countries

A common CPG industry tre18nd and the coronavirus spreads is that consumers are increasingly stocking up essentials and grocery items, while the demand for non-essentials have drastically declined, posing new CPG industry challenges. US consumer goods companies can learn from the mistakes of other countries and better prepare themselves to face this black swan event. Based on the analysis of our CPG industry experts on the impact of COVID-19 in countries like China and Italy, four main category archetypes have emerged and are most likely to show a similar trend in the US:

  • There is a huge spike in the demand for categories such as health and hygiene (hand sanitizers and disinfectant masks), instant meals, and medical supplies. These items are being rapidly undersupplied across channels which in turn results in rigid turnover and frequent out-of-stock situations.
  • CPG categories such as shelf-stable groceries, daily hygiene products, and bottled water face constrained supply and reduced stock-levels.
  • Decline in non-essential CPG product demand in categories including snacks and savories, soft drinks, personal care products, and pet food.
  • Steep decline in luxury product sales including cosmetics, alcoholic beverages, and confectionery.

As more consumers are shifting to online channels for purchases, this creates new CPG industry challenges for players in terms of adapting their logistics and supply chain to this new trend. Furthermore, these spikes and dips in demand have created intense stress for CPG companies and require them to rapidly adapt their strategies for production, transportation and distribution, key account management, and marketing. 

During times of crisis like this, it is critical for companies in the CPG industry to take calculative and well-executed measures to ensure business continuity in the long run. Request a free proposal to know how industry experts at Infiniti Research can help you plan your next steps during the COVID-19 situation.

Action plan to combat CPG industry challenges due to COVID-19

In countries like China and the UK, CPG companies have faced intensified challenges due to the short-term nature of their contingency plans. To exacerbate the situation, travel restrictions across countries have created logistical bottlenecks, further worsening the existing inbound and outbound supply chain challenges. Here are some strategies for players in the US to effectively combat CPG industry challenges due to the COVID-19 crisis and react effectively to this unprecedented business shock.

Review production plan and inventory management

The need of the hour for CPG companies is to define a contingency plan to ensure supply continuity. Companies in the CPG industry must determine the weakest links in their supply chain including raw materials, packaging, or workforce and build strategies to address these issues in the order of priority.

Build logistics flexibility

Working with local authorities to understand the COVID-19 hotspots and lockdown areas will help companies to better plan the logistics and delivery to these territories. A major revamp would be required for the existing transportation and logistics plan to improve logistics flexibility. Furthermore, steps can be taken to stop or limit the logistics of the non-essential category.

Enable frequent and real-time customer communications

Making account managers constantly available to address customer conversations, especially in critical channels, is vital for companies in the CPG industry during the coronavirus crisis. Working with multi-functional teams to quickly resolve pain points and bottlenecks are essential to provide proactive and quick responses to the customers. CPG companies must also consider creating agreements with manufacturing teams to produce larger batches of specific SKUs in order to increase product availability. 

For more insights, get in touch with an industry expert.

CPG industry trends

Emerging CPG Industry Trends in Asia

The rapid economic growth in Asia has resulted in increased consumer spending. Over the next decade, we can expect continued economic spend in Asia especially as the middle class widens. The economic, industrial and social reforms have transformed the lifestyle and consumption patterns of consumers in the region.  Various changes in the demographic, economic, and technological landscape in the CPG industry in Asia have also given rise to new CPG industry trends. Lured by the growth prospects, several foreign companies have already begun planning their market entry strategies into the Asian CPG industry. For such companies, it is vital to scrutinize and be watchful of the CPG industry trends and formulate strategies accordingly.

To gain a competitive edge and survive in the fiercely competitive Asian market, foreign companies must take a holistic approach inclusive of critical CPG industry trends and opportunities. Learn how our solutions can help!

CPG industry trends in Asia

CPG industryRise of ecommerce

One of the most disruptive change experienced by CPG companies in Asia is the emergence of ecommerce. Ecommerce, which is well established in the West, is gradually expanding routes to the FMCG sector in Asia’s developing markets. Increased access to the internet and smartphones are fueling are presenting a valuable opportunity for brands to target and deepen their relationships with customers. Over the last year, CPG industry sales online saw a steady growth globally, with China being one of the prime contributors to this growth. This change in consumer shopping preferences will greatly impact the CPG industry in Asia.

Growth in premium goods segment

Luxury goods are becoming highly popular among Asian consumers, fueled by urbanization, higher GDP, and changing lifestyles. Although this was relevant earlier in the fashion industry, the premium segment is becoming one of the most attractive CPG industry trends to watch out for. Demand for premium FMCG goods is growing particularly in regions like China, where the demand for luxury purchases are on the rise even in smaller cities and rural areas.

While the opportunities in Asian’s emerging markets are exciting, the market terrain in these countries is complex and dynamic. Get in touch with our experts to learn how we can help you navigate the challenges and capitalize on the opportunities coming your way.

Changing demographics

The aging population is a growing concern in Asian countries. By the year 2050, a good majority of Asia’s population will comprise of the elderly, soon making it home to the oldest population in the world. Such shifting demographics will imply significant change to the CPG industry trends in the region. The demand for certain goods are likely to increase in the long-run while the demand for some currently well-performing segments are bound to decrease. Such CPG industry trends must be considered for companies planning their market entry strategies into Asia.

Strong home-grown brands

Home-grown brands in Asia enjoy a strong and loyal customer base and will continue to dominate the CPG industry in the region. Some of these brands have even mastered effective customer targeting, flexible distribution, social media marketing, and customer engagement. Local brands understand regional consumers and mostly follow low-cost strategies while focusing on efficiency.

Gain more insights on Infiniti’s solutions for companies in the CPG industry

Recent Posts

target market segmentation

Western Europe’s CPG Industry Trends to Expect Over the Next Decade

The CPG industry in Western Europe is poised to witness new waves of change over the next decade. Due to the current CPG industry trends such as migration from offline to online shopping channels, investors ushering in new streams of consolidation, and increasing regulations for CPG manufacturers, players in the CPG industry must reinvent their strategies if they are to thrive in the long-run. In this article, experts at Infiniti outline some of the key consumer packaged goods industry trends that we can expect to see over the next ten years in Western Europe.

Surviving in the saturated markets of Western Europe, in the long run, requires businesses to accurately foresee market changes and draft powerful strategies to adapt. Request a free proposal to know how our solutions can help.

Western Europe’s CPG industry trends

CPG industry trendsEmergence of niche consumer segments

The mass market will soon shrink, giving rise to a range of small yet lucrative customer segments. For instance, CPG industry trends like healthy foods, environmentally friendly product, and increased personalization will gain momentum. CPG companies that want to stay abreast with such CPG industry trends and effectively serve these market segments will have to be innovative and agile.

Cross-channel shopping and growth of discounter sales

Modern consumers now want to shop at more than one type of stores. Such CPG industry trends are becoming highly popular among consumers in Western European countries. They are increasingly making purchases from multiple retail formats, channels, and banners. Furthermore, in European countries such as Italy, Spain, and Germany, discounter sales are gaining increased momentum. Although such CPG industry trends could prove to be a threat for branded manufacturers, it could also prove to be a great opportunity for companies that decide to venture into private-label manufacturing.

We can help CPG companies in Western Europe build operating models that hold promise as future growth engines. Get in touch with us to know more!

Digital shopping

‘Going digital’ is one of the vital CPG industry trends that is going to take the sector by storm. One such trend is ‘online grocery’ which is gradually becoming a vital source of income for both retailers and CPG manufacturers. Furthermore, as online grocery shoppers tend to buy the same items every week rather than browse for new products, it is essential for CPG brands to secure a place on consumers’ digital shopping lists once this trend goes mainstream.

Stricter regulations

Government bodies across Western Europe are introducing new measures to boost consumer protection and promote sustainability. Changing environmental standards and new laws will make it harder for companies operating in Western Europe to stay ahead of the regulatory curve.

Learn more about how Western Europe’s CPG industry is changing

supply chain challenges

Top Supply Chain Challenges Facing CPG Companies

The Consumer packaged goods (CPG) industry is already experiencing a seismic change due to challenges including rising raw material costs, stalled demand, declining profits, skyrocketing retail pricing pressures and the never-ending shift in consumer preferences. Furthermore, the changing consumer preferences is bringing about new supply chain challenges for CPG companies. Companies selling consumer packaged goods must effectively identify and mitigate supply chain challenges coming their way in order to drive growth by reaching new customers and channels.

Leaders of consumer products companies need to strike a delicate balance between cost, quality, product innovation, and market growth, all while maintaining margins. Request a free proposal to know how experts at Infiniti can help you achieve this.

Supply chain challenges for CPG companies

supply chain challengesConsumer demand for variety

Modern consumers are highly demanding. As a result, there is a constant urgency among players in the CPG industry to offer new products that match the changing consumer preferences. This translates to more SKUs and shorter product lifecycles. Th consequent complexity in product development, sourcing, production and fulfillment will add on to the supply chain challenges faced by CPG companies. Reacting to changes in consumer preferences would mean that the CPG supply chain needs to be agile enough so that the required adjustments can be orchestrated end to end across the supply chain.

Venturing into new markets

Experts at Infiniti research are of the opinion that the fastest growing CPG companies are those that choose to compete in the fastest growing product categories and geographic territories. Investing in the right markets is one of the key drivers for growth, which comes with its own set of supply chain challenges. Furthermore, overcoming key supply chain challenges in terms of flexibility will help companies in the consumer packaged goods industry to easily penetrate new markets and create potentially new delivery models and fulfilment channels.

Get in touch with our experts for more insights on how CPG companies can overcome critical supply chain challenges.

Digital transformation of supply chains

Amidst the rising popularity of digital innovations and enhanced customer experiences, it is no surprise that digital transformation is one of the critical agendas for top executives at leading global CPG companies. However, this cannot be rolled out successfully unless their back-end infrastructure is not capable enough to ensure timely delivery of goods.

Learn more about infiniti’s solutions for business

CPG industry trends

Top CPG Industry Trends to Expect in 2020

CPG Industry Outlook

Over the past few years, rapidly evolving technologies, consumer demographic shifts, and changing consumer preferences has greatly shaped the consumer packaged goods (CPG) industry. However, with rapidly evolving customer expectations, CPG companies are under the pressure to offer personalized customer experience (CX) across every communication touchpoint. Consequently, it becomes vital for CPG companies to not only keep abreast with the latest trends but also to be prepared to operate amid uncertainty. To help you prepare for rapid market changes, our experts have curated top CPG industry trends that will transform the industry in the future.

Planning to invest in the CPG sector? Our custom market intelligence solution can help you gather CPG market insights and understand CPG industry trends and transformations.

Top CPG Industry Trends

Top CPG Industry Trends for 2020

Transparency and Sustainability

With buyers valuing transparency in business operations and sustainability in the products that they buy, transparent packaging is becoming one of the major CPG industry trends today. The “clean label” trend is one aspect of transparency. CPG brands are also exploring new packaging alternatives such as bio-plastics and well-known options like transparent glass containers. Hence, it’s no longer enough for CPG manufacturers to simply list ingredients on the label. Instead, CPG brands will need to focus on using packaging materials that are more appealing and environmental-friendly.

Digital consumerism

According to Infiniti’s CPG market research experts, nearly 70% of overall CPG growth came from online channels in the last decade. Therefore, ‘going digital’ is becoming one of the major CPG industry trends today. Also, CPG companies emphasizing on selling online in the coming years will enjoy a significant advantage over other brands.

Leading CPG brands are leveraging Infiniti’s market intelligence solution to identify the latest market innovations and stay ahead of emerging CPG industry trends. CONTACT US today!

Growth in home-delivery

Home delivery services are expected to become one of the most favoured CPG industry trends in the coming years as customers increasingly prefer to have their good delivered at their home. Also, with leading CPG brands introducing home delivery services, traditional CPG companies will be under the pressure to reinvent their sales models and expand their delivery service option. Therefore, in order to drive sales, businesses must constantly analyze their customers’ shopping patterns and evolving needs. Also, leveraging CPG market segmentation approach can help businesses efficiently categorize their customers and provide products to meet their demands.

 A Multichannel Future

Another exciting CPG industry trend that is expected to go mainstream in 2020 is the adoption of multichannel business strategy. Gone are the days where brands could win customers and sales solely by relying on their brand image. In today’s competitive CPG marketplace, brands must start adopting multi-channel strategies to reach consumers directly through digital channels.

Is your brand ready to adapt to the unexpected transformations and gain a leading edge in today’s competitive marketplace? Request for more info to know how our experts can help you identify evolving CPG industry trends and achieve your business goals.

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