The consumer packaged goods industry has seen a major shift in the last 2 years. With the ever-changing shopper preferences, a new CPG competitor is rising everyday in the market. And on top of that, technologies like Generative AI, are all set to turn the CPG industry on its head.
We are not just talking about testing; we are primarily talking about adoption. The numbers? 4-year CAGR of +29.75% is impressive, indicative of a tech boom. Curious? In fact, you do. So, let’s dig deeper.
Upcoming sections will spill out the details, ensuring you know everything trending in the CPG sector.
Table of Contents
Definition of CPG market
The CPG market, or consumer packaging, is a vast and ever-growing industry that includes all the products consumers buy on a daily basis.
From your weekly grocery shopping to personal care planning, it covers a wide range of products.
By the way, did you know that if we talk about its size, the global CPG market is projected to reach a staggering $24 million by 2028? Yes, this is great!
What factors are driving this growth?
Well, it’s mainly driven by consumers’ desire for convenience, affordability, and high quality.
The CPG market is categorized into two core segments: food and beverage and personal care/cosmetics.
The food and beverage industry is extensive, with sales expected to reach $1.961 trillion by 2024. Additionally, the personal care industry is making great strides in offering green and healthy products.
The report published by Repsly on the 2024 CPG outlook shows what CPG brands are focussing on this year. And this is what they found:
Do you know any specific personal care products that are eco-friendly?
Due to increased focus on sustainability and wellness, consumers are increasingly choosing products that align with their values.
In the past, the CPG industry was primarily dominated by large corporations with significant market power and economic clout.
In recent years, however, dramatic changes have occurred with direct controls (DTCs) development. These emerging brands posted an impressive 15% growth from 2019 to 2022.
In short, the CPG industry is a vast, dynamic industry where innovation is constantly buzzing. With new features and techniques popping up every day, it’s an incredibly exciting place to behold.
At its core, the CPG industry exists to meet people’s needs and wants. As consumer behavior and preferences change, companies strive to adapt and stay relevant.
The CPG industry truly embodies the spirit of innovation and customer focus. You will get to learn more in the following section.
Importance of understanding market trends in the CPG industry
Navigating the dynamic landscape of the CPG industry requires a deep understanding of market trends.
Why is this important?
Because it’s all about aligning with the customer’s priorities, meeting the vendor’s expectations, and taking advantage of opportunities in different segments and channels.
Let’s glance at the importance of studying market trends in the industry.
1. Aligning with Customer Needs
First, market trends tell you if you are aligned with your customers’ needs. Aligning customer demands, which are market trends, with your product can be a game-changer. As the market evolves, understanding and adapting to emerging trends will be essential.
What new desires, preferences, and innovations are evident?
Well, the companies are taking a proactive approach. This trend takes CPG companies a step further, enabling them to offer products that consumers actually crave.
Keeping up with what customers want is the ultimate formula for success, wouldn’t you agree?
2. Vendor Expectations
But that’s not all. Another essential factor is vendor pressure. Consider this: the most effective retailers are looking for products that not only fly off the shelves but also deliver tangible value.
Do you wonder if your product meets the standard? It’s worth considering.
To match the retailer’s expectations, your company must keep up with trends, remain relevant, and increase visibility and retention.
3. Segment, Channel, and Geography Dynamics
Now, let’s dive into the market. Trends vary across CPG segments, channels, and geographies. It’s like solving a puzzle;
Hence, the companies need to integrate everything seamlessly.
Consider the conundrum of growing global demand for organic and natural products. This situation raises an important question: how can companies best tap into the expanding market of eco-conscious consumers? This complex puzzle will be unpacked in upcoming sections as we explore tailored strategies and insights to meet the needs of this eco-conscious population.
4. Embrace the Rise of e-Commerce
By shifting focus to different channels, online shopping in the CPG industry is rising. So, there is no secret – people rely heavily on e-commerce for their daily needs.
How can companies ride this wave? Take advantage of that and tweak your marketing strategies. Optimizing any online space leads to significantly higher sales, in line with changing consumer preferences.
That’s the pulse of consumption, isn’t it interesting?
Repsly’s research highlights an interesting point: 34% of respondents are ready to invest in retail or sales research in the next year. It is clearly indicative of trends in the industry.
Market Overview 2024
Now, after getting the gist of studying your industry, here comes another deciding factor: the market overview.
In this section, let’s discuss the growing influence of Gen Z, changes in digital marketing, and how these trends shape marketing strategies in the CPG industry.
Current state of the CPG market
Before actually diving into the market with your product, you should have a brief idea of the current CPG market state. And hence, digital marketing is taking center stage in 2024.
With online shopping on the rise, people are turning to digital channels for everyday buys. The global pandemic is driving trends as people rely on the convenience and safety of shopping from home.
And think about it!
The Gen Z CPG market is buzzing with excitement! Their growing spending and deep love of social media radically change how brands approach marketing.
This isn’t just a subtle change – it’s a dynamic change that requires our attention. Let’s explore how these digital natives are reshaping the game for brands and what that means for the future of marketing strategies.
Undoubtedly, Instagram and TikTok are Gen Z hotspots for exploring and sharing experiences.
Now, here’s the kicker for CPG brands: How do you actually engage with these digitally savvy, socially conscious consumers?
It’s all about activating their values and priorities. Got a way to do that?
Gen Z people are all about green practices and social responsibility. So companies that advertise their commitment to these aspects will benefit greatly. Seems pretty simple, right? But that’s not just it.
Brands are competing day in and day out to stay ahead of the curve by reaching Gen Zs.
There is a race to stay ahead of the curve for CPG brands and find new ways to reach Gen Z. Think about it: with so much competition, how do you cut through the noise and capture their attention?
One way is through influencer marketing. Teaming with key social media influencers that align with your brand values can help amplify your message. This also allows you to connect with Gen Z on a deeper level.
But wait, there’s more! More than the product, Gen Z wants to know the story behind the logo. They like to see if you support something other than profit.
Therefore, it is essential to incorporate your values and ethics into your marketing campaigns. Show them how your brand positively impacts the world, and watch their loyalty grow.
Growth Trends in CPG Industry 2024
Before we look at the growth trends, here’s an exciting survey by Repsly. And you will also enjoy it. Because the numbers are really worth looking for.
You really need to keep an eye on things floating around your industry. So, let’s dig into this aspect.
Before that, you might know that the main shake-up of the CPG industry is the rise of private consumer goods companies. Now, it’s not just the big brands that dominate the shelves.
But, the private brands are on the rise, offering high-quality products at competitive prices. Who wouldn’t be intrigued by that, right?
And speaking of convenience, let’s not forget the ever-expanding e-commerce sector.
Internet marketing is on the rise! From online retailers to delivery and direct-to-consumer, the options are limitless. Shopping is changing, and it’s all about convenience and products at your fingertips. So, is there a better way to shop?
But wait, there’s more. The CPG industry is moving towards sustainability. People want things that align with their values. That’s why brands are going eco-friendly, using recyclable packaging and sustainable sourcing methods. It’s about making a positive impact on the planet. How encouraging is that, right?
Now, let’s discuss personalization. It’s a kind of trend going on. The consumers feel more satisfied when they want something they need and get that exactly.
Moreover, the companies use technology and data to give you a more personalized experience – think about skincare, meals, and nutrition plans. Everything is there on the list.
It’s about adding that additional value that is uniquely tailored to your brand!
And finally, let’s not forget the game-changer – digital innovation. The CPG industry is investing in cutting-edge technologies such as AI and machine learning to transform the way we produce, sell, and consume.
Picture this for a moment: a product that has been fine-tuned to fit seamlessly with consumers’ needs, improving their daily lives.
The innovative concept is an incredible opportunity for CPG brand managers and designers.
Have a look at the data found during the survey; it’s really astonishing for the CPG brands to look at.
Key players in the market
Step into the category of “major market players,” where industry leaders set trends and inspire innovation. Demonstrate architects of change establish concepts with a cohesive impact in a business environment.
1. Procter & Gamble (P&G)
Procter & Gamble (P&G) dominates the CPG industry with a market cap of $378.30 Billion. Known for Tide, Crest, and Pantene products, P&G has a rich history of acquisitions to deliver to customers worldwide.
Additionally, they are constantly innovating and adapting to the changes seen in customer needs to ensure they remain market leaders.
Hence, P&G’s commitment to research and development has enabled them to introduce groundbreaking products that make everyday life easier and more convenient.
2. Nestlé
Boasting a staggering market capitalization of $288.79 Billion, Nestlé is the ultimate destination for a wide range of global flavors. Whether it’s the irresistible lure of KitKat desserts, a leisurely sip of Nescafe coffee, or browsing through a wide variety of 2,000 other energy drinks, Nestlé caters to everyone’s palate.
Beyond just a satisfying taste, Nestlé emphasizes quality and sustainability, exemplifying responsible sourcing of ingredients. Their commitment to green and socially responsible practices makes them outstanding industry leaders.
3. Anheuser-Busch InBev
Anheuser-Busch InBev, rocking a market cap of $125.56 Billion, is a powerhouse in brewing, bringing us classics like Budweiser and Stella Artois. Have you ever wondered why these brands are so beloved?
Their secret? Smart strategies, including extraordinary collaboration and accessibility, help them spread the magic of winemaking worldwide.
In an ever-evolving world of consumer preferences, AB InBev is always ahead of the game, creating new flavors and experiences. Want to know how they stay on top of the brewing game?
Their business acumen and strong commitment to the high-quality beverage industry make their products fly off the shelves.
4. Coca-Cola
With a market cap of about $263.79 Billion, Coca-Cola is the largest soft drink company in the world. Coca-Cola, Sprite, and Smartwater are just a few of their still hot beverages.
Guess what? Coca-Cola doesn’t just quench your thirst; it dives deep into sustainable practices. They’re all about responsible water use, innovative packaging, and reducing waste. Why? Because they’re committed to a lifestyle that appeals to consumers worldwide! Awesome, right?
5. Unilever
Here comes the most prominent global CPG company with a market cap of $127.94 billion. Unilever excels in personal care and home care products.
Their brands like Dove, Ax, and Lipton cater to various consumer needs. Unilever’s focus on sustainability is embedded in every aspect of its business, from responsibly using raw materials to reducing plastic waste.
Their continued commitment to social and environmental causes makes them a company many customers trust and support.
One thing these CPG key players have in common is:
- A relentless drive for innovation
- A commitment to quality
- A deep understanding of customer needs
Each company brings its unique strengths and strategies to the table and continues to deliver exceptional products that improve customers’ lives.
These companies continue to shape the CPG market with their success and influence. But how? Because:
- P&G is committed to R&D
- Nestlé is focused on sustainability
- AB InBev shows strategic expansion
- Coca-Cola put efforts on iconic size
- Unilever’s commitment to responsible business practices
Conclusion
In conclusion, our analysis of the CPG industry trends for 2024 shows that the industry is going through a significant evolution. The big takeaway revolves around a solid commitment to sustainability and the rapid adoption of digitization.
When we engage in sustainability, this is not just a process but a strategy. These changes are significant for businesses.
Also, consumer consciousness now recognizes that environmental consciousness is essential, not just admirable. What’s next after that? Pursuing new focuses.
This means seamless integration of sophisticated technologies such as data analytics, artificial intelligence, and automation. The digital realm is no longer a career option; It is a prerequisite for operational flexibility and customer engagement.
In summary, the CPG industry in 2024 is all about sustainable growth and digital transformation. Not only is it amazing; but staying relevant is an essential strategy.
Hence, a forward-looking approach requires continuous innovation, with technology integration being the key to success in this ever-changing landscape.
The core vision is clear: flexibility and insights are the cornerstones shaping the journey of the CPG industry in the coming years.
