2025 CPG Outlook: Industry Update & Trends Predictions
Brands are now balancing design, and social responsibility to meet the evolving expectations of the modern consumer. The pursuit of gastrotourism—the desire to experience global flavors from home—and the https://www.bookstime.com/consumer-packaged-goods increased focus on honing culinary expertise have further reshaped the modern kitchen. Consumers are finding ways to optimize their lives through the real-time feedback these health tech wearables such as fitness trackers, blood glucose monitors, etc. can provide. Plus, you can be sure that whatever you’re changing in your routine is working for you rather than following advice that is meant to work for the general population.
Investing in Food Stocks
Sprite, Tide, and Moleskine notebooks are all packaged goods brands purchased and used by millions every day. From an operational perspective, a CPG company manufactures products, sells them to retailers, who then sell them to consumers. A company is considered a CPG company if it produces and sells consumer packaged goods, which are products that consumers use daily and have to be replenished frequently. CPG companies typically have a large portfolio of products, which are sold at a low cost to consumers. As technology continues to advance, the future of consumer packaged goods looks bright.
Food and beverages
- For more knowledge of brand identity, you can read our guides to build brand equity.
- Consumers increasingly demand ethical accountability alongside cute clothes from CPG brands.
- At the same time, AI can keep a watchful eye over a CPG brand’s competitors 24/7, which provides assurance that the watchful brand won’t experience too many surprises.
- Through direct-to-consumer marketing practices, it can ditch the traditional retail markets and can offer its consumers discounted and competitive prices.
- That’s appealing, given that retaining just 5% of a business’s customer base can improve its bottom line revenue by up to 95%.
To date, the CPG industry has lagged behind most major industries on digitization. This comes as no surprise, since it lacks first-party data and hasn’t experienced as much digital disruption as industries such as financial services and telecommunications. But now, leaning into digital transformation is critical for the next S-curve.
New textures have shaken up quiet categories by bringing a novel experience to consumers.
Categories like packaged snacks, refrigerated foods, personal care, home care, and baby products are distributed widely overseas. As rising international incomes allow growing consumer classes to purchase branded packaged goods, US CPG companies are positioned to benefit. Beyond direct employment, CPG stimulates additional economic activity through purchasing, supply chains, and retailer partnerships. Brands contract external agencies for services like marketing, graphic assets = liabilities + equity design, technology, and so on.
- While CPG e-commerce still lags behind categories like consumer electronics, adoption accelerates across generations.
- Nestlé is the largest food and beverage company in the world, with a vast product range that includes baby food, bottled water, cereals, coffee, and pet care products.
- Favorable macroeconomics were once the industry’s most important tailwind.
- As consumers search out private-label products and pay more attention to sustainability measures, CPG companies will need to be quick to adapt.
- CPG companies, in turn, rely on retailers to distribute their products to consumers.
Through understanding target consumers, leading CPG companies transform alongside the times. As the largest CPG category, food and beverages represent staples like dairy, baked goods, snacks, confections, meat, cereals, and more. Beverages span alcohol, soft drinks, juices, coffee, tea, and bottled water.
The general process of producing, selling, and distributing aspirin and cough medicine to retailers is identical. The more products that a CPG company can sell into a retailer, the more leverage it generates. Fifty years ago, a lot of vertical integration was done organically, through research and development. Lax anti-trust enforcement means that retailers are becoming more and more powerful, which means that a CPG company needs more brands to bargain with.
Keep an Bookstime eye on products that support these health trends as well as functional ingredients that combat the negative affects of unhealthy behaviors and risk factors of chronic disease. Doing so will help them remain future-forward operationally and give them a stronger likelihood of forming lasting (and revenue-producing) customer bonds. For instance, AI can be programmed to constantly monitor social media platforms for specific hashtags and keywords.