5 consumer trends that are transforming CPG in 2024

Find out how CPG products, packaging, and experiences converge in response to changing consumer preferences. Find out how CPG products, packaging, and experiences converge in response to changing consumer preferences.

How do today’s consumers restock their pantry? How do they replenish their stash of toothbrushes or refill their medicine cabinet? The average shopper doesn't just run over to their local grocery or drugstore anymore. From marketplaces and e-retailers to social media apps, there are a myriad of shopping scenarios that skip the traditional retail channels.

In 2024, the rules of engagement are being rewritten by none other than the consumers themselves. The consumer packaged goods (CPG) landscape is undergoing a fascinating transformation, fueled by evolving preferences and behaviors. So, what are the trends steering the ship this year? Let's explore five consumer-driven trends that are reshaping the way CPG companies operate and connect with their audiences.

CPG outlook and trends in 2024

  • 1. Increased demand for DTC channels

In 2023, a significant 63% of consumers opted to make purchases directly from a brand's website, according to a study by PwC. This trend is set to surge in 2024, prompting CPG companies to invest heavily in enhancing their ecommerce capabilities. To meet the demand, companies are building robust online platforms, optimizing supply chain logistics, and refining last-mile delivery solutions. The shift towards DTC channels allows for greater control over the customer experience, fostering brand loyalty and increasing overall sales.

Consider the globally recognized health and beauty brand, Sephora. They revamped their online platform and also optimized supply chain logistics. Sephora ensures customers receive their beauty and skincare products promptly with an efficient last-mile delivery process. As the demand for DTC channels reshapes consumer-brand dynamics, industry leaders like Sephora exemplify the dedication to providing seamless, personalized, and direct connections with their customer base in the health and beauty sector.

  • 2. Increased media consumption

In the quest for CPG products, consumers are exploring diverse apps, websites, and social commerce platforms. Currently, there are 8.93 million apps and 1.13 billion websites on the internet. Moreover, there are 4.95 billion social media users globally.

CPG companies are amplifying their online marketing endeavors to engage consumers in these virtual realms. Strategic partnerships with social media influencers and content creators are emerging as favored tactics to elevate brand presence. CPG firms are not just adapting to consumer preferences but are also crafting compelling and interactive experiences. This approach goes beyond meeting consumers at their virtual doorstep; it's about cultivating an immersive online environment that fosters product awareness and drives sales.

For instance, BK Beauty added TikTok Shop as a channel when it launched in the US a few months ago. Immediately after doing so, the beauty brand saw a record sales day of 3,000 orders, half of which were just from TikTok Shop.

  • 3. Increased interest in health and wellness

The consumer shift towards healthier living is driving CPG companies to reformulate their products. There's a growing demand for "clean" and healthier options, leading companies to reduce artificial additives, incorporate functional and natural elements, offer organic and plant-based alternatives, substitute refined sugars with natural sweeteners, and incorporate functional ingredients like superfoods.

Moreover, there is an increased emphasis on transparency in labeling, providing consumers with detailed information about the nutritional content and sourcing of products. Brands now offer a range of plant-based, gluten-free, and non-GMO snacks, clearly communicating the nutritional benefits on its transparent labels. By embracing the health and wellness trend, brands not only meet the evolving expectations of consumers but also contribute to fostering a healthier lifestyle. Such innovations underscore how CPG companies are actively adapting their product offerings to embrace the growing demand for clean, nutritious, and transparent choices.

  • 4. Increased focus on sustainability

Did you know that global packaging waste reached a staggering 275 million tons in 2023? In response, companies are prioritizing eco-friendly practices, with a notable focus on adopting biodegradable materials, implementing recyclable packaging solutions, and minimizing the use of plastics.

Environmental concerns are influencing purchasing decisions, prompting CPG companies to adopt more sustainable practices. Beyond packaging, there is a heightened commitment to reducing food waste and promoting circular economy initiatives. As consumers become more eco-conscious, CPG companies are aligning their practices with sustainable principles to appeal to environmentally aware consumers.

And soon, this will be the industry standard – the European Commission is developing a program to bring more transparency to the circular economy. Using digital product passports (DPP), it will be easier to trace products across the supply chain.

  • 5. Increased personalization through technology

Consumers are increasingly seeking personalized experiences, and CPG companies are leveraging technology to meet these expectations. Data analytics, AI, and machine learning are being employed to gain insights into consumer behavior. This allows CPG companies to offer personalized recommendations, customized packaging, and even tailor product formulations to meet individual preferences. The era of one-size-fits-all is fading as companies embrace personalization to strengthen customer connections and drive brand loyalty.

2024 is witnessing a transformative period for the CPG industry, where companies are adapting to the evolving landscape shaped by consumer preferences. A lot of this transformation can be seen in the product content companies use for ads and listings – using video formats, incorporating health and sustainability information, tailoring imagery to highly specific audiences, etc. To be able to mold product content in this way, and do so quickly and effectively, companies are turning to new AI use cases for managing their product content journeys.

What are these use cases? Find out the specific ways companies like Haleon and Bayer are using AI to adapt to today’s consumer trends in our 2024 guide - Overcome data challenges in CPG: Leveraging AI for product content success.

Download our 2024 CPG guide here

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