Consumer packaged goods (CPG)
From toothpaste to breakfast cereals, consumer packaged goods (CPG) are an integral part of our daily lives. Let’s look at how the CPG industry is defined and explore the latest trends that are shaping the space.
What is Consumer Packaged Goods (CPG)?
Consumer packaged goods (CPG) refer to a wide range of products that are consumed daily and are meant to be consumed or replenished frequently, so they have a relatively short shelf life. CPG products often involve low-cost items that cater to the everyday needs of consumers. The packaging of CPG goods is a crucial aspect, as it influences consumer choices on the retail shelf.
- Examples of CPG products include:
- Non-perishable foods
- Toiletries and cleaning products
- Small appliances
- Beauty and personal care products
- Paper products
- Household goods
CPG is a massive industry with a global presence, influencing purchasing behaviors and trends across diverse markets.
What will the CPG industry look like in 2024?
The consumer packaged goods (CPG) market size was valued at $1.91 trillion in 2021 and is projected to reach $2.45 million by 2030, growing at a CAGR of 3% from 2021 to 2030.
This growth is largely due to an increasing competitive landscape as more players enter the market. CPG brands are forced to broaden their reach and intensify the frequency of advertisements and promotional initiatives to stand out from other businesses.
We’re also seeing evolving patterns in consumer behavior, including a rise in the micro-segmentation of consumers. With more defined target audiences, CPG companies are bringing new types of products to market to cater to their niche needs. For instance, many consumers are putting a greater emphasis on sustainable purchasing, prompting CPG companies to reevaluate their practices and adopt eco-friendly packaging and production methods.
And of course, the CPG industry has witnessed a significant shift towards digitalization. As we look to the year ahead, ecommerce platforms will become major players in the distribution of CPG goods. Let’s take a closer look at some of these trends…
Trends in the CPG industry
- Personalization and customization
Consider a scenario where you're browsing a skincare website. Not only does it recommend products based on your skin type, but it also offers a personalized skincare regimen tailored to your unique needs.
CPG companies are increasingly leveraging technology to offer customized products and experiences like tailor-made food options. This trend enhances consumer engagement and fosters brand loyalty.
- Digital transformation
The CPG industry is embracing digital transformation, with ecommerce platforms playing a pivotal role in the distribution and marketing of products. Online shopping, subscription models, and personalized recommendations are becoming increasingly prevalent.
For instance, Procter & Gamble (P&G) offers consumers a seamless online shopping experience through P&G Shop. The company has embraced subscription models, allowing customers to receive regular deliveries based on their usage patterns.
- Conscious consumerism
In 2024, consumers are more environmentally conscious than ever before. CPG companies are responding by adopting sustainable practices, from using eco-friendly packaging materials to sourcing ingredients ethically.
- Health and wellness
Consumers are seeking products that align with their health goals, leading to a surge in demand for organic, natural, and functional foods. CPG companies are responding by reformulating products to meet these evolving preferences.
CPG trends in 2024 reflect a blend of technological innovation, sustainability consciousness, and a heightened focus on consumer well-being. As we navigate through the aisles of CPG goods, it's clear that the industry is not just about products; it's about adapting to the changing needs and expectations of consumers in a rapidly evolving world. If you're keen on exploring solutions that bridge the gap between products and consumers in this digital era, check out Productsup's P2C platform to learn more.