Millennials prefer private labels over national brands due to their cost effectiveness. Reports predict that private labels could account for up to 35% of market share by 2025, further solidifying their position in the market. Despite the increase in sales across CPG categories, top CPG brands witnessed a decrease and the cause has been cited due to increased fragmentation of customer preference for private brands. From allergen disclosures and environmental labeling to data privacy and extended producer responsibility, regulations in the CPG space are growing in both number and complexity.
Consumer Packaged Goods 101: What is CPG?
Advances in AI, IoT and digital technology are helping achieve hyper productivity, improve supply chain efficiencies, and drive new growth opportunities. By focusing on these growth areas, embracing digital and AI, and adapting to emerging trends, CPG companies can drive profitable growth and create long-term value. Though this trend was spurred by the rise of digital commerce, it will require brands to explore offering an omnichannel experience to consumers and enter the phygital or in-store space as well to increase flexibility for consumers. After its all-in-one meal drinks became popular, Huel came up with a flexible subscription model where customers can pick their flavors, frequency of delivery, and also get discounts. This model ensures that consumers have a regular stock of products without having to worry about running out of them or constantly having to replenish them. Tic Tac hosted The Tic Tac Bookkeeping for Etsy Sellers Experience at NYC’s Chelsea Market to celebrate the launch of a new flavor.
The Top 5 Key Challenges Facing the CPG Industry
More holistically, cloud technology—within a robust technology ecosystem that encompasses data analytics—can transform operational and business initiatives to drive consistent innovation and bottom-line growth. Technologies like virtual try-ons for cosmetics or taste simulation for snacks lower the barrier for trialing products how is sales tax calculated digitally first. As expectations rise for speedy fulfillment and free returns, CPG brands enhance supply chain agility.
Home Care and Cleaning Products
- FMCGs, on the other hand, are products that are sold quickly at a low cost, such as soft drinks, toiletries, and snack foods.
- Key players in the food and beverage industry under the CPG sector include renowned companies such as Unilever, Kellogg Company, McCain, Tyson Foods, Nestlé, Coca-Cola Company, and Pepsi.
- It also encompasses specialized categories like baby care products, sexual health items, and feminine health products, catering to specific consumer needs and life stages.
- The EU’s upcoming Digital Product Passport (DPP) is just one example of legislation pushing brands to deliver detailed, standardized product information.
- According to Nielsen, sustainable-minded consumers were expected to spend up to $150 billion on sustainable products by the end of 2021 in the US alone.
There’s also a prominent uptick in the popularity of men’s personal care items, reflecting a broader embrace of self-care. This includes segments like food and beverages, beauty and personal care, wellness and health, apparel and footwear, and household products. Consumer Packaged Goods (CPG) include a wide range of everyday products people purchase regularly. These items are essential for daily life and require frequent repurchasing because they are used quickly.
Acuvate Enhances Monitoring for Urban Water Supply Department with Water Quality Advanced Anomaly Detection
Before diving deep into the trends and competitive strategies, it’s essential to understand the CPG meaning. The term “CPG” stands for Consumer Packaged Goods, referring to products that are consumed regularly and need frequent replenishment. They’re the items we reach for without thinking — used, replaced, and repurchased in an endless cpg accounting rhythm that quietly powers global commerce. FMCG, or Fast-moving Consumer Goods, refers to products that you can sell quickly at relatively low cost. They are considered moving because retailers need to restock the shelves regularly due to high turnover rate. According to an IDC study, 46% of consumers believe that a brand’s sustainability record is an important deciding factor for whom they’ll do business with.