There’s no dearth of research to help give us clues to the answer. In the first half of this year alone, major CPG research results have been published by the likes of Accenture, Deloitte, Forrester, IRI and Kantar – and that just covers the first half of the alphabet!
The broad takeaway from these reports is that there are six major trends driving innovation in the industry. Three of them are just as important as they’ve ever been, and three additional ones are becoming more significant as time goes on.
The three “classic” trends that drive CPG innovation as much as ever are convenience, value, and specialization.
They’re fundamental, they’re significant, and they haven’t lost their importance based on what’s happening in the larger marketplace or the economy:
Convenience is a major driver because consumers are always looking to get what they need faster and with less effort than before. If a product saves time and delivers multi-benefit solutions, consumers will respond.
Value is always perennially important. When the perceived value of a product goes down because of price pressures or a lack of differentiating benefits, brand loyalty is adversely affected.
Specialization – Product formulation and packaging can affect the way consumers feel about products. The more that can be provided in the way of a “just-for-me” solution as opposed to “one-size-fits all,” the better.
If they concentrate on these three trends, most CPG brands do pretty well. But there are three additional trends that appear to be gaining momentum. Add them to the repertoire, and an additional competitive edge can be established:
Portability – As consumers’ lives have become more mobile than ever, a premium is placed on brand that can deliver on-the-go offerings.
Environmental Impact – It’s been a long time coming, but this trend finally appears to be reaching some semblance of critical mass. More consumers are considering environmental factors — not just as attributes for products that are “nice to possess,” but actually necessary for making a responsible choice. It’s more than the product itself; it’s also sourcing, manufacturing, distribution and disposal.
Health Impact – The days of CPG products being big on convenience but bad on health are numbered. Thanks to better education and more out-of-pocket medical-related cost responsibilities, health awareness among consumers has never been higher. It may not be translating yet into improved health metrics like lower obesity rates, but there’s pretty clear evidence that more people understand health risks and are taking more responsibility for their own personal health and that of their family members. Products that can credibly claim to “healthy” benefits stand to gain in the competitive landscape.
Do you feel that there are other trends besides these six that that are influencing the development of consumer packaged goods today? Perhaps ones associated with cultural diversity … or something else? If so, please share your thoughts with other readers here.