Disruptive Technologies & Innovative Consumer Models to Drive Consumer-Packaged-Goods (CPG) Industry

Over the past couple of decades, the consumer-packaged-goods (CPG) industry has seen dramatic shifts in business landscape; the trends are driven by a complex interplay of market forces—disruptive technologies, upheavals in the retail and supply markets, innovative consumer models, demographics shifts and their impact on consumer landscape.  These trends, along with evolving geopolitical dynamics, shape up the personal consumption patterns—the way we spend shop around, and form brand perception. Industry players across various geographic regions including developed and emerging markets have devised new marketing approaches through target marketing and crafted strategies to capitalize on these trends.

Companies in the CPG industry have made constant product innovations, deftly passed on input-cost increases to consumers and significantly boosted their profit margins; and, along the way, managed to achieve the pursuit of scale and efficiency. Most high-impact industry trends are driven by technology advancements and structural industry shifts. Latest technology trends such as new mobile platforms and applications of big-data analytics have taken consumer engagement to new levels.

Industry observers and market strategists in CPG do not consider all the trends equally significant; some will constantly impact industry growth while others may be no more than market hype, slated to peter out after few years. Even the levels of impact will differ depending on the geographic regions and the consumer outreach. The face of the consumer industry have already been in a constant flux of change with increased urbanization, ageing population and increasing middle-class spending; for instance, spending among middle-class consumers will almost triple, globally, by 2030. Furthermore, many direct-to-consumer models and continued consolidation efforts by industry players will enable to tap them into the burgeoning consumer base in the emerging markets. Their shift of strategies from advanced countries to emerging countries would be led by in emerging nations of Asia, such as China, India, and Indonesia; these countries already have had a significant share of global growth through the last decade, and the growth is expected to increases further by almost 30% over the next decade. Global middle class will expand dramatically; according to Organization for Economic Co-operation and Development (OECD) Development Centre, by 2020, over 1 billion new consumers will be added to the consumer base, whose spending lie between $10 and $100 per day. This will inspire CPG companies to create high value-oriented products—at the same time maintain their profit margins—largely, by building scale and segmenting end-users skillfully. For instance, in China, Nestle has cut down the product prices by 30 % to gain a stronghold in ready-to-drink coffee market, and cut down its costs in sourcing raw materials; another multinational confectionery company, Cadbury, has introduced various products at low price points to allure new consumers in the chocolate segment. This has helped top CPG companies to address specific consumer needs along with boosting their productivity margins. Across various geographic regions, cutting down operational costs and using new digital mediums to reach by new consumers are some of the prominent strategies that need to be followed by key industry players. Apart from this, companies also need to address supply chain bottlenecks and volatility to make market expansions and take advantage of the ample opportunities unlocked by globalized trading.

Technology has always been and in future decade expected to be another key enabler driving the growth of CPG industry. The dominance of digital technology has already impacted brand communication and transformed consumer experience. Engaging consumers through social media coupled with involving consumers in brand innovation will explore new consumer touchpoints.

All these trends and market forces are comprehensively analyzed in the market research reports by Big Market Research. An extensive analysis of disruptive technologies that will shape up the market demands in consumer goods industry are highlighted in the reports. The study will be useful for companies aspiring to be reap competitive advantages by 2020 must keep a track of these emerging trends and actively incorporate them in strategy formulation.