Definitive Guide to Consumer Packaged Goods CPG Industry: Key Segments, Trends & Leading Brands
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To make true, measurable progress, sustainability must be a core responsibility of commercial and functional leadership, if it isn’t already, supported by the right incentives and key performance indicators. In this report, we first examine how 2023 has left the industry at a crossroads, then explore the connection between profitable growth and positive stakeholder impact. We conclude by looking ahead to the most pressing issues that will shape CPGs’ strategic agendas in 2024 and beyond. The uncertainty CPGs face in 2024 feels different, though, chiefly Car Dealership Accounting because executive teams have fewer levers to pull in response to faltering consumer confidence than they had during past inflection points for the industry.
CPG Industry Outlook and Future Prospects
Done well, these measures can engage and align executives, attract tech talent and help the business choose solutions that truly support revenue growth. We asked the partners who lead Bain’s consumer products work in these six areas to define the long-term objective and 2024 priority actions for each. Despite this broad momentum, only about a third of CPGs are on track to meet their Scope 1–3 decarbonization commitments. Our survey, meanwhile, showed only muted urgency on environmental, social, and governance (ESG) issues.
What are the challenges facing the CPG industry?
We advise setting an ambitious target, such as aiming for the new business to deliver at least one-third of the company’s revenue within ten years. Supermarkets have always played a fundamental role in the CPG formula for success. But these critical trading partners have lost five percentage points of market share over the past decade.
Digital commerce and omnichannel retail
E-commerce platforms are significantly impacting the CPG industry, influencing product assortment and distribution strategies. The convenience and efficiency of online shopping are prompting CPG companies to rethink their retail and marketing income summary strategies to cater to the online consumer base effectively. Closely linked to the DTC model is the subscription model — another CPG industry trend to keep a close eye on in 2025. For consumers, subscription models bring valuable benefits such as free shipping, discounts, and personalized experiences. For CPG brands, the subscription model can bring a steady stream of income, reduce the number of purchase journeys, and add more dynamic pricing options. Companies are already implementing omnichannel shopping experiences in a myriad of ways, from “buy online, pickup in-store” to “scan and go” technologies.
- With low interest rates powering a sustained M&A boom, a PwC analysis illustrates that opportunities abound for capability-enhancement deals that generate robust shareholder returns.
- Consumers develop brand loyalty when they trust a brand’s products and have positive experiences with them.
- While consumer demand for consumer packaged goods (sometimes known as CPGs) largely remains constant, it is still a highly competitive sector.
- In navigating these trends, CPG companies must be agile, innovative, and customer-focused.
- That finding comes from an analysis of the top 100 publicly listed CPGs globally (by revenue).
- 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.
How is CPG different from retail?
To foster consumer engagement and maintain brand loyalty, manufacturers and retailers are focusing on strategies like advertising, packaging, and personalized experiences. The consumer-packaged goods (CPG) industry is navigating economic headwinds, evolving consumer preferences, and technological disruption this year. The industry’s global retail sales value increased by almost 10% year on year in 2023, mainly owing to price increases. But consumers have reached the limits of their willingness to absorb higher prices, especially for everyday essentials, and are expecting products to be discounted. They are looking to downtrade to value brands and choose private labels which are known to offer good quality at reasonable prices. The CPG industry is undergoing a digital transformation, cpg accounting leveraging technology to enhance customer engagement, streamline supply chains, and enable personalized product development.