Industry Snapshot: Five Trends Driving Change in the Consumer Packaged Goods Sector
From the rise of Gen Alpha to the impact of weight loss drugs, the latest WARC Industry Snapshot report on consumer packaged goods (CPG) highlights five significant shifts expected to gain traction in the year ahead.
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What’s changing
- Re-evaluating price-driven growth: With inflation cooling and consumers reaching their limit on paying higher prices, CPG brands are beginning to reappraise price-driven growth strategies.
- The growing importance of healthy ageing: Consumers are showing a stronger desire to age healthily, and brands are catering to this by introducing products which address health concerns related to ageing.
- Appealing to Gen Alpha: Gen Alpha’s influence on household purchases is growing across various categories, such as food, cosmetics, and skincare.
- Bracing for the impact of weight loss drugs: The rising popularity of weight loss medications like Ozempic and Wegovy is prompting some CPG brands to reassess and adapt their product portfolios to cater to changing consumer needs and eating habits.
- Finding value in by-products and surplus produce: Growing concerns around food waste have led to brands utilising by-products, otherwise wasted ingredients, and surplus food to create valuable goods.
What these shifts mean for marketers
Marketers can start to adapt their strategies by thinking about the following themes:
- Pricing: As businesses begin to approach a limit with price-driven growth, investing in advertising and building brand equity will be important to create pricing resilience.
- Ageing: Understanding and adapting to the shifting conversation around healthy ageing can improve the relevance of brands to customers at all stages of life.
- New audiences: The emergence of Gen Alpha and their influence on household purchases means marketers may need to rethink their target audiences.
- The macro health context: Given the potential impact of weight loss drugs on consumption patterns, CPG brands may want to revisit their product portfolio and assess whether changes (e.g., product size, portions, or ingredients) should be made to meet consumer’s changing needs.
Go deeper
The Industry Snapshot report uses WARC’s proprietary GEISTE framework, along with sector-specific research, to generate a comprehensive picture of the trends shaping the CPG industry and charts how marketers can respond. It also contains a series of hypothetical scenarios to help businesses plan and prepare against different potential futures.
Credit: WARC