3 Mega trends in CPG for 2K10

The economic upheaval that started in late 2008, and which continued to deteriorate at a frenetic pace till the 3rd quarter of 2009,  spared no one. Consumers, Manufacturers, Retailers, all have had to come to grips with the current reality.

When you tack on technology advancements that enabled, and empowered ANYBODY (who cared) to use them, you are faced with the prospect of overwhelming change, one that is seemingly unmanageable, one that can re-shape your business, and you. Never before have we seen such mind boggling rates, and volumes of information sharing, and knowledge transfer Enter twitter, linkedin, facebook, and a million other apps to further enable and monetize these human network concepts (Foursquare, Gowalla come to mind). This is the age when network connectivity will finally evolve into “human connectivity” with far reaching business implications.

Here are some thoughts that I collated from the comments that were posted on the CPG Connects Super Group on LinkedIn. I have layered in my understanding on top. Feel free to post your comments below.

1. Consumer frugality, and price sensitivity continues to drive the trend towards channel fragmentation or cross-channel cherry picking, “simpler” and “fresh” food choices, cooking from scratch, smaller basket sizes, but more frequent trips.

Look for Retailers to:

a. Go “Local” with produce, and for innovative “local” farming to spring up in places you would least expect (urban areas, and downtown rooftops etc.)

b. Expand Private Label offerings to more categories, but they will need to be consistent with their branding messages, across the categories.

c.Improve shopper experience/loyalty programs in-store (innovative sampling, demos, featured aisles, optimized store layout based on adjacency,  interactive shelf talkers and other digital means).

d.Demand better prices, and leadership position from manufacturers, in order to stay listed.

Look for manufacturers to:

a. Increasingly explore e-commerce, like P&G did with theessentials.com, last week. Will be interesting to see how the retailers react.

b. Increase use of digital coupons (ConAgra is doing it), and increase reliance on Bonus/Special packs (better margin control)

b.Work on co-branding strategies with Private Label, especially if it is not the lead brand in category.

c.Focus on Shopper marketing, and location based intelligence to micro target shoppers, and increasingly use Social Media, and advances in mobile technology, & web analytics, to reach their target audience.

2. Going Green will continue to become mainstream, including Green Living, as reducing  carbon footprints become more of an accepted personal responsibility.

The group seemed to agree that this will impact CPG, most in terms of packaging, leading to reduced packaging, smaller packs, and more visually appealing packs. Some retailers like WalMart may mandate packaging requirements, as a part of societal marketing, and sustainability requirements.

3.Health & Safety Concerns, including a rapidly aging population will drive growth in anti-aging, all natural, gluten free, and personal fitness products.

I will update this post with the latest trends, as the year progresses. If there are any other mega trends that will impact the CPG industry in 2K10, please feel free to share them with all of us.

Here are few related links on trends.  Enjoy!


5 Ways Foursquare is Changing the World                                                                      http://ow.ly/16lW0p

6.7 Billion mobile subscribers by 2014                                                                             http://bit.ly/7VSCvs


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