Future of Consumer Packaged Goods: Trends and Insights for 2023 and Beyond

The global Consumer Packaged Goods market was valued at $2052554.53 million in 2022. A CAGR of 2.98% is forecasted between now and 2028, meaning the industry is expected to reach $2448010.38 million by 2028.

The world of consumer packaged goods, like many others, is transforming. In order to remain relevant in the industry and get ahead of competitors, you’ll need to stay on top of the CPG trends 2023 has to offer. Companies need innovative products and approaches to meet new human needs, while consumer packaged goods marketing has changed dramatically in recent times to accommodate this. It’s an exciting time for CPG brands, with 2023 set to be an excellent year, yet you need to understand the market and what customers want.

Consumer packaged goods is essentially a term for merchandise that customers use and replace on a frequent basis, such as groceries, cosmetics or cleaning products. This is in contrast to durable goods, which are generally not replaced until a significant period of time has passed, or there is a problem with the product itself, like furniture or cars. Any small edge or advantage a company can generate will help business, of which one of the main ones is eCommerce.

With that being said, in this blog post, we’ll explore consumer goods industry trends and consumer packaged goods examples to help you get a better understanding of the sector.

What are consumer packaged goods?

Consumer packaged goods, commonly known as CPG, are products that are sold to consumers for personal or household use. They are typically produced by manufacturers in large quantities and packaged for sale to retailers, who then sell them to end consumers. Examples of CPG include food and beverage products, personal care products, cleaning supplies, and over-the-counter medications.

CPG products are often sold in traditional retail environments such as grocery stores and department stores, as well as online through eCommerce platforms. They are typically packaged in a way that makes them easy and convenient to use, with clear instructions and labelling.

Consumer packaged goods companies often invest heavily in marketing and advertising to build brand awareness and drive sales. They may also engage in promotional activities such as coupons, discounts, and loyalty programs to encourage repeat purchases and customer loyalty.

The CPG industry is a significant part of the global economy, with many large companies operating in this space. Consumer packaged goods companies face intense competition and must continually innovate to meet changing consumer needs and preferences. They must also navigate complex supply chains and regulatory environments to ensure the safety and quality of their products.

Consumer packaged goods examples

Consumer packaged goods, or CPG, are products that are consumed by individuals on a regular basis and are typically sold in retail stores. Here are some examples of CPG products:

• Food and beverages - This includes products such as cereal, snack foods, frozen meals, soft drinks, and bottled water.
• Personal care products - Examples are products such as soap, shampoo, toothpaste, deodorant, and cosmetics.
• Household goods - This includes products such as laundry detergent, cleaning supplies, and air fresheners.
• Pet care products - This covers products such as pet food, pet treats, and grooming products for dogs, cats, and other pets.
• Health and wellness products - You can expect products like vitamins, supplements, and over-the-counter medications.
• Baby and child care products - This includes products such as diapers, baby wipes, baby food, and children's toys.

These are just a few examples of the wide range of products that fall under the category of consumer packaged goods. CPG products are typically produced in large quantities and sold at a relatively low cost and are designed to meet the needs of a broad consumer base.

The Benefits of Selling CPG Online

Typically, consumer packaged goods are sold by retailers in physical locations with packaging designed to set themselves apart from rival products. Due to a limited amount of physical space in these stores, the market can be highly competitive.

However, due to the significant advances in mobile technology, automated supply chain management, machine learning and data analytics, the ability for companies of all sizes can now use the internet to sell goods through eCommerce channels and avoid having to compete in brick-and-mortar stores.

This boom is clearly shown by the startling recent statistics, with certain industries expected to experience significant growth in the coming years, specifically personalised items, plant-based products, and self-care. Not only have we seen exceptional growth in the past few years, but the number of consumer packaged goods companies list is growing at an increasingly fast rate too, meaning that more and more people are looking to purchase these goods online instead of in-store. If you do not already have an eCommerce channel attached to your business, you are placing yourself at a huge disadvantage before you’ve even begun.

Top Trends For CPG In 2023

Although some brands can seemingly dominate an industry with no competition, in the digital age, a disruptor can easily and quickly appear to change the hierarchy. Behemoth companies can be toppled by startup companies if they can better serve a customer's wants and needs. So, what makes a brand stand out from the competition, and what are the consumer goods industry trends 2023 has for you to follow moving forward? And what are some examples of companies providing consumers with goods in effective and innovative ways to inspire you? Let’s take a look at some CPG innovation trends for 2023.

1. Transparency: Transparency is currency for the modern consumer, and it is one of the most important consumer package goods industry trends. It is up there with value and quality in the mind of your customers, and it comes in many different forms. It involves being clear about where your products are sourced, how they are made, what impact they have on the environment and where they were made and by who. Transparency also means staying true to yourself. Clarify your messaging and the information you are delivering to your customers.

Recently, Heineken did this incredibly effectively by utilising customer co-creation. As a way to engage with customers as well as champion sustainability, the company held a contest for consumers to design an innovative new bottle design. From this, they were able to engage and bond with customers, as well as illustrate their dedication to great and sustainable packaging and materials.

2. Sustainability: Speaking of sustainability, if you’re not already making an effort to be more environmentally friendly, then you’re falling behind the competition. Consumers care a huge amount about sustainability, and they want to see that you are doing something about it, if not, it is a surefire way to get them to consider alternatives instead. With this in mind, Nestlé is arguably doing more than most to reassure their customers in relation to this. They have committed to making 100% of its packaging reusable and recyclable by 2025 and will be reducing its carbon footprint to net-zero by 2050. These are all things that modern consumers want to see the companies they engage with doing in the modern world.

3. Subscriptions: Subscription-only businesses work. It’s why upstart brands like Dollar Shave Club were able to disrupt an industry dominated by Gillette. One of the main reasons for this was their subscription-based services. They realised that customers don’t want additional steps when they are looking to buy something, so by offering a subscription right away, they encouraged higher sales and built an immediate rapport with their customer base.

Companies can even offer discounts on subscription orders, as it encourages repeat buying and looks to turn one-off payments into continued loyal customers. Now more than ever, customers want less hassle when buying, and this is something that a subscription service can do for them quickly and easily.

4. Personalisation: Did you know that 70 per cent of the leading DTC subscription brands use product quizzes? This is either prior to the sign-up process or during it, and the purpose is to ensure the customer experience is as personal as possible.

Function Of Beauty is a great example. This haircare and skincare brand creates personalized products based on the consumer’s goals, for example, repairing split ends or adding volume. The consumer is then able to choose what colour or scent they want.

As customers increasingly demand products that are tailored to their specific needs, this is something we are only going to see more and more of.

5. More Private Label Brands: Another trend that has certainly come to the fore is the introduction of more private-label brands. With direct control over product development and better margins, private-label brands are proving an attractive proposition for retail businesses.

A good example of this is Goodthreads, which is a private-label clothing brand set up by Amazon. The company has also established Amazon Essentials and Amazon Basics, as well as a number of other private-label brands. And let’s be honest; where Amazon goes, others tend to follow. We have already seen it with Kroger and Walmart, and this is just the beginning.

6. Convenience and Innovation: With busy lifestyles and a desire for convenience, CPG companies are likely to focus on developing products and packaging that offer greater convenience and portability. This includes the use of innovative packaging designs and the development of new product formats that are easy to use and transport.

Here are some ways that convenience and innovation are shaping the CPG industry:

• Portable and on-the-go products - Consumers are increasingly looking for products that are easy to use and transport, such as single-serve snacks, pre-made meals, and on-the-go drinks. CPG companies are responding by developing products that are convenient for busy lifestyles, with packaging and formats that make them easy to consume while on the move.
• Smart packaging and labelling - With the rise of digital technology, consumer packaged goods companies are developing smart packaging and labelling solutions that offer convenience and innovation. This includes the use of QR codes and RFID tags that provide additional product information, interactive packaging that engages consumers, and packaging that helps prevent food waste by providing expiration date information and storage recommendations.
• Voice-activated technology - Voice-activated assistants like Amazon Alexa and Google Home are increasingly used, so CPG companies are exploring ways to integrate their products with these platforms. This includes the use of voice-activated shopping, where consumers can order products directly through their voice assistants, as well as the use of voice-activated recipe recommendations and cooking instructions.

7. Augmented Reality (AR) and Virtual Reality (VR): AR and VR are two technologies that are becoming increasingly popular in many industries, including the CPG industry.

Augmented Reality is a technology that overlays digital information on top of the real world, giving people the ability to interact with digital objects in a real-world environment. AR can be used in a variety of ways in the CPG industry, such as enhancing product packaging with interactive elements, providing additional information about products, and allowing customers to visualise products in a real-world environment before making a purchase.

Virtual Reality, on the other hand, is a technology that creates a completely immersive, computer-generated environment. VR can be used in the CPG industry to create virtual product demonstrations, immersive brand experiences, and training simulations for employees.

Together, AR and VR can offer a range of benefits for CPG companies, including increased engagement with customers, improved product education, and enhanced brand experiences. However, implementing AR and VR technologies can be complex and costly, and companies will need to carefully evaluate the potential benefits and costs before investing in these technologies.

8. Data-driven decision-making: Data-driven decision-making is a process of making decisions based on data analysis and interpretation. In the context of the CPG industry, data-driven decision-making involves using data analytics to gather insights and identify trends related to consumer behaviour, market trends, supply chain efficiency, and other key metrics. By leveraging data to make informed decisions, CPG companies can optimize their operations, improve their product offerings, and enhance their marketing strategies.

Data-driven decision-making can be applied to a range of areas within the CPG industry, such as:

• Product development - You can use data analytics to identify consumer preferences and develop products that better meet their needs. By analysing customer feedback, purchase behaviour, and social media activity, companies can gain insights into what customers are looking for in terms of product features, packaging, and pricing.
• Marketing - CPG marketing trends show data analytics will play a vital role, as it can help companies to target their marketing efforts more effectively by identifying which channels and messages are most effective. Brands can create personalised marketing campaigns that are more likely to resonate with their target audience.
• Supply chain optimisation - Data analytics can be used to identify inefficiencies in the supply chain and optimise logistics operations. By analysing data on inventory levels, shipping times, and transportation costs, companies can identify areas for improvement and make adjustments to improve efficiency.
• Sales forecasting - CPG companies can use data analytics to forecast sales and plan inventory levels more effectively. Sales trends and customer behaviour evaluation enables companies to make informed decisions about product demand and adjust production and inventory levels accordingly.

9. Social responsibility: Social responsibility is the idea that businesses should operate in an ethical and sustainable manner, taking into account the impact of their operations on society and the environment. In the context of the CPG industry, social responsibility involves a range of initiatives related to sustainability, ethical labour practices, and community engagement.

Some examples of social responsibility initiatives that CPG companies may undertake include sustainable sourcing, ethical labour practices, charitable giving, and eco-friendly practices.

10. Cross-industry partnerships: Last on our list of consumer packaged goods industry trends is cross-industry partnerships, which refer to collaborations between companies in different industries to achieve common goals. In the context of the CPG industry, cross-industry partnerships can offer a range of benefits, such as increased innovation, improved customer experiences, and expanded market reach. We’re likely to see more of these partnerships over the coming months and years. Some of the most fruitful could include:

• CPG and technology companies - CPG companies can partner with technology companies to develop new products and services that incorporate cutting-edge technology. For example, a food company might partner with a technology company to develop a smart kitchen appliance that uses artificial intelligence to suggest recipes and make cooking easier.
• CPG and healthcare companies - CPG companies can partner with healthcare companies to develop products that promote health and wellness. For example, a beverage company might partner with a healthcare company to develop a new line of functional beverages that provide specific health benefits.
• CPG and fashion companies - CPG companies can partner with fashion companies to develop new product lines that reflect the latest fashion trends. For example, a beauty company might partner with a fashion company to develop a new line of makeup inspired by the latest runway looks.
• CPG and entertainment companies - CPG companies can partner with entertainment companies to create immersive brand experiences and marketing campaigns. For example, a snack company might partner with a movie studio to create a limited-edition product tie-in with a popular film franchise.

Tips For Consumer Packaged Goods Companies To Grow Online

So now you know the main growing CPG industry trends to incorporate into your strategies and campaigns for the coming year, you’ll need some tips as to how to use them effectively in order to grow your business successfully. These include:

Be Online: In the case of the retail innovation statistics 2021 has thrown up, it projects that online grocery sales will become a $100b market by 2022. In many markets, the online model, more accurately the online plus offline model, can offer better value to shoppers on everything from price to convenience to choice. eCommerce is critical to growth, so if you are not offering customers the ability to purchase online, you will suffer greatly as a result.

Be Omnichannel: It’s important to present a fully unified experience across every customer touchpoint, if you don’t, it will feel disjointed, disingenuous and untrustworthy. If a customer spends time with your brand digitally and offline, they will expect consistency in both experience and messaging, no matter where they are interacting with you. Unifying your approach to omnichannel is essential in today’s world. If not, you won’t be trusted, and when a customer doesn’t trust you, they will not buy from you, no matter how good your products or value may be.

Be Personal: Personalisation is a key buzzword for today’s businesses. Ultimately, it means using data to offer experiences and content to customers throughout their journey in an engaging, direct way, across all digital channels. By treating them as an individual as opposed to just a number in a data set, it will engage with them on a deeper level that forms a stronger connection. When you are connected with your customers, your conversion rates will undoubtedly increase.

Challenges CPG Brands Will Face in 2023

We are dealing with a cost of living crisis at the moment, meaning people have less disposable income to spend on consumer products. This will naturally impact the CPG market, meaning brands will have to do everything in their power to deliver value and to market effectively so consumers feel like the money they do have is worth spending on the business in question.

Supply chain issues are also causing problems. Couple this with rising inflation, and it means the cost of CPG products is going to keep increasing. However, CPGs simply cannot pass these costs onto consumers anymore. Consumers are no longer stockpiling these items the moment they hit the shelves, as supply and demand are levelling out. CPG brands are going to need to look for ways to balance out their costs without simply passing them on to the consumer.

Consumer preferences and behaviours are constantly evolving, and brands will need to stay abreast of these changes to remain relevant. This may involve investing in market research and product development to anticipate and meet changing consumer needs.

CPG companies also have increasing regulations to contend with. Governments around the world are implementing new regulations related to product safety, environmental sustainability, and other issues. CPG brands will need to comply with these regulations while still delivering high-quality products and services to their customers.

Finally, one of the biggest challenges is undoubtedly cyber security threats. As Consumer Packaged Goods brands increasingly rely on digital technologies to manage their operations and engage with customers, they may become more vulnerable to cybersecurity threats such as data breaches and ransomware attacks. Brands will need to invest in robust cybersecurity measures to protect themselves and their customers.

What's Next for CPG Brands?

In an industry that changes at rapid rates, consumer industry trends shift rapidly, and you need to be able to adapt to them. However, if you don’t have this forward-thinking mindset, it’s likely that your product will be left behind in favour of your competitors.

Consumers are more connected to brands and products than ever before, so it’s crucial that you foster this relationship and connect with customers outside of just a basic product offering. Focusing on transparency, sustainability, and an omnichannel strategy will all help develop your business. Giving your customers what they want, before they ask for it or even knew they wanted it, will forge long-lasting bonds with consumers and increase the perceived value and integrity of your company.

This blog post is Last updated on May 16th, 2023.