Last updated: November 29, 2021 CPG industry trends: Prepping for what’s ahead in 2022

CPG industry trends: Prepping for what’s ahead in 2022

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The consumer packaged goods (CPG) industry is massive, contributing $2 trillion to US gross domestic product. Whether a multi-billion-dollar brand or a digital upstart aiming to double revenue in record time, marketing is essential to success and takes up a large portion of CPG budgets.

Luckily, there are several ways that CPG brands can retool their strategies so that they better align with consumer interests for competitive edge. As the market evolves, there are five emerging CPG industry trends that brands can prepare for now.

CPG industry trends: Adapting to change

CPG brands have been navigating tremendous change for a number of years now. Consumer preferences are constantly evolving while the pandemic accelerated the shift to digital channels into hyperdrive. Competition is stiff as more companies jump into the market with direct-to-consumer plays.

Brand loyalty is hard to come by when consumers have so many choices. And buyers today have high expectations. They want fast, convenient, and personalized service and are quick to switch to another brand if their experience falls short.

In order to compete effectively and win market share in this environment, CPG companies need to adapt to these trends:
  1. The rise of the conscious consumer
  2. Digital native brands drive innovation
  3. Data privacy priorities
  4. Marketing shift to first-party customer data
  5. Complex customer journeys

The conscious consumer: Performance art won’t cut it

Consumers increasingly want to buy from brands that challenge the status quo, such as those that focus on sustainability and social good. Conscious consumerism is a growing CPG industry trend that COVID accelerated.

Much more than just a shift in marketing messaging or packaging, many brands are taking this opportunity to upgrade their product offerings to put products on the market that have less sugar, include less (or no) plastic, and use organic ingredients. Some CPG companies give a portion to charity with each sale.

However, this must be authentic and make sense for the values of the brand. Consumers aren’t going to tolerate performative gestures. So, tap into your customer base to understand what is important to them.

Digital upstarts shake up the CPG industry 

Global CPG behemoths have long dominated the industry, but tides are starting to change. Digital native brands leading are rising in popularity and growing three times as fast as e-commerce as a whole. They’re winning over consumers with innovative products and direct to consumer models.

This should spur incumbent brands to innovate like their bottom line depends on it, because it truly does.

The best brands are doubling down on their most successful product categories and devoting some time to experiment on new offerings that might become the best sellers of the future. They’re also experimenting with DTC.

This requires a mindset change for many of these multinational brands because future growth requires devotion of staff and resources now, even if the material results are still months or years away.

Consumer trust becomes a top CPG industry trend 

Data breaches have been all too common occurrences and consumers are appropriately worried. The last thing they want when they do business with a brand is to see their credit card number leaked or social security number get into the hands of bad actors.

Winning consumer trust must be a top priority for CPG brands. They must adhere to data privacy best practices and demonstrate their commitment to privacy. They can put anxious consumers at ease by publicizing their data privacy practices front and center on their website and social media channels.

CPG marketing: All about first-party data 

Consumer goods companies generate a lot of consumer data. They subscribe to syndicated data, they participate in market research, they know what and when their customer like to buy. But there’s a rift between having access to that data and doing something about it.

With the massive growth of digital marketing, CPG brands and their partners are generating consumer data at each touchpoint. This first-party data is a goldmine, providing the comprehensive view of each consumer that brands can uses to create personalized experiences. In order to get these benefits, however, CPG companies need a strong direct-to-consumer strategy that enables them to collect and act on first-party data instead of leaving it to agencies and retail partners.

First-party data has become a huge CPG industry trend with Google’s plan to eliminate third-party cookies looming for 2023. This has forced a discussion around how to better track and collect consumer data in a way that takes a longer-term view of driving transactions.

In this new reality, brands will need to invest in their own databases so they can manage large volumes of first-party data from multiple channels.

Buckle up for a more complex customer journey  

Direct-to-consumer channels, marketplaces, in-store: Today, there are countless ways that brands can sell to shoppers. This means that data can be streaming in from myriad sources around the clock.

CPG brands must gain a better understanding of consumer journeys so that they can meet shoppers on the channels and at the time that works best for them. There’s longer a traditional customer journey, and with the rise of hyper-personalization, brands can and should cater to customers as individuals, not lookalike audiences.

Success in the future of consumer products requires being nimble, customer-first, and highly personalized. Combining these elements with the strategies above will enable brands to differentiate and cater to fluctuating consumer preferences so they don’t leave money on the table.

Old direct-to-consumer marketing playbooks don’t work today.
Tap into the future of CPG, DTC, engagement, and loyalty HERE

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Angelica Valentine

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