Top 5 Trends That Are Revolutionizing CPG Industry

When the world’s leading biscuit brand (Parle Products) increased the price of its crowd favorite- Parle G by 6-7% in 2021, marketers sensed seismic shifts burgeoning in the CPG industry. As much as the hike is owing to the rising input cost, it is also because of the volatility experienced by the brands in supply chain and distribution network post COVID-19 pandemic.

Globally, food prices went up to 3.4% by July 2021. CPG brands have been trying to sync up with the fast-forwarded digitized pace with new formats and channels coming to the forefront. An industry dominated by traditional distribution networks comprising wholesaler, retailer and consumer has drastically leapfrogged to a channel agnostic model now.

If there is one industry that literally started from scratch post-pandemic with fluctuating consumer demands, it is the CPG industry. While the changes might be big, the forthcoming adjustments by CPG brands will be bigger. Let’s take a look at the top CPG trends post Covid-19 that reverberated the industry creating disruption across the globe and are setting the stage for 2022.

1. Connected Digital Commerce

Of course, technology plays a crucial role in the rise of the digital consumer. Across the globe, today’s consumer is exposed to many channels (both online and offline) to arrive at a purchasing decision. However, given that ecommerce sales rose to 35% during the pandemic, consumers’ outlook towards procuring goods in this category have undergone a major shift. The utmost important aspect for a CPG brand in the future will be to secure the best position on the digital shelf. New normal highlighting social distancing will keep many shoppers away from the brick and mortar stores thus paving way for ecommerce to flourish even more. This will thus become a new hotbed for promotional activities where brands can sell directly to consumers. Digital technology will completely transform the way a brand will communicate to its consumers. CPG companies are still warming up to the idea of social media but the ones who are raring to take this path will evolve and grow faster.

2. Changing Consumer Patterns

COVID-19 pandemic witnessed many consumers switching their brand loyalties to newer brands. It also saw consumers innovating with newer and never-tried-before products in the CPG category. All this builds a huge testament to the fact that the dynamic consumer behavior is here to stay and brands must act accordingly. While the millennial generation is growing at a steady rate, in some parts of the world – the average consumer is aging faster. CPG brands thus need to keep a steady balance to cater to the different groups seamlessly. Building unique products and services might not be the only answer but offering personalized services for different consumer segments can promise an everlasting consumer brand relationship. This is where customer loyalty programs would become a great resource for brands to stay connected in the entire customer shopping journey.

3. Revamping Distribution Models

CPG brands need to focus on enabling faster deliveries of products more than ever before whether through ecommerce platforms or other newer delivery formats like at-home, BOPIS (buy-online-pick-up-in-store) and curbside delivery. Convenience has gained more prominence when selecting a product. A recent study by Deloitte highlights that more than 50% of consumers are spending more on convenience to fetch a specific product than the product itself. Omnichannel is no longer the new norm that CPG brands will follow, it is all set to become a default in CPG marketing strategy. This will largely have brands communicating to both the channels – Direct To Retailer and Direct To Consumer.

4. Influencer marketing all set to grow bigger

An upcoming avenue in the CPG space, influencer marketing has a massive potential to build a strong connection with today’s digital savvy consumer. Given that social media marketing is growing by leaps and bounds, a brand having an influencer would not only offer an image to the brand but also resonate with the similar audience faster. When influencers share product information or any other related content on a social media platform, it not only generates excitement but also builds a community of similar interest. These communities eventually build high customer engagement by indulging in conversations, sharing content and fostering an environment of brand loyalty.

5. Pivoting to Value With Customer Loyalty Programs & more

While the volatility experienced by CPG brands across both demand and supply side will continue, brands must focus on carving a niche for themselves in this highly competitive market. Price is no longer the only decision-making factor, other factors like building experience, convenience and connectedness have forayed in this industry. The shift from a conventional distribution model to a more value-focused model will be the next big thing. Besides streamlining order management and inventory capabilities, CPG brands need to invest on procuring zero-party data to get started in this digitized revolution. By connecting with consumers through loyalty programs powered by a robust AI intelligence platform, brands can communicate with consumers at the right time and on the right channel. Brands must aim for driving greater enterprise agility with superior marketing capabilities.

A crowded industry like CPG needs to start now to witness the results in the near future. Knowing that a cookie-less world is just around the corner and data is the answer to consumer’s wavering attention span, CPG brands need to invest in a real-time marketing strategy that would encapsulate the consumer buying behavior accurately. At Capillary, several teams collaborate together to create revolutionary customer loyalty programs that could withstand the challenging times and generate results. Chat with one of the team members today to unlock the journey of a successful CPG loyalty program.

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Writer, traveler, and a cold coffee addict, precisely in that order, Aditi Jindal is a storyteller. Whether it is slicing brands and their content marketing strategies or dabbling different genres of book writing; her keen interest in finding the unique idea for brands to deliver compelling stories keeps her on her toes.