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The FMCG industry is a large and diverse sector influenced by numerous factors, including economic conditions, consumer preferences, and technological advancements.
The FMCG industry generally tends to be stable and resilient, even during economic uncertainty. The industry has been able to weather economic downturns and continue to grow, due in part to the essential nature of many FMCG products that consumers need, even when times are tough. However, the industry can also be affected by changes in consumer preferences and technological advancements, which can lead to shifts in market share and changes in the competitive landscape.
2022 saw a lot of movements in the industry. Many companies saw their first increase in annual profits since the COVID-19 pandemic while others have had to adapt their strategies to stay competitive in an ever-changing environment. Digitalisation has now put the customer in the driver’s seat and enables endless comparison of products on the spot. If your business doesn’t have a captivating and comprehensive online presence, you might have lost out on a lot. Consumer goods companies have had to optimise their marketing strategies and brand awareness to maintain customer loyalty.
Recently, a few FMCG companies have struggled to adapt to changing consumer trends and preferences. For example, in 2019, Campbell Soup Co. announced it would sell its international and fresh food businesses to focus on its core soup and snacks businesses. According to an article written by CNBC, the company struggled to adapt to the growing trend of consumers looking for healthier and more sustainable food options, so it decided to stick to product lines that they knew well.
On the other hand, FMCG companies have also had success innovating and adapting to changing consumer trends. Unilever is a great example of a company that has successfully adapted to the trend of sustainable packaging by committing to making all of its plastic packaging reusable, recyclable, or compostable by 2025. The company also invested in plant-based food alternatives, with the acquisition of brands such as The Vegetarian Butcher and Pukka Herbs.
Well-loved for its sweet treats and now winning the hearts of plant-based food lovers, Nestle is another company that has had good innovations in the industry. They have invested in plant-based food alternatives with the launch of its “Sweet Earth” brand, which produces plant-based burgers, sausages, and breakfast sandwiches, and also they have invested in personalized nutrition with its “Nestle Health Science” division.
Overall, it is clear that FMCG companies that can innovate and adapt to changing consumer trends and preferences are more likely to be successful in the long term, while companies that struggle to keep up with these trends may struggle to remain competitive in the ever-changing industry.
Trends to take note of in 2023
As we look forward to 2023, several trends in the fast-moving consumer goods (FMCG) market are worth keeping an eye on. These trends are shaping how consumers shop, what products they buy, and how companies market to them.
Here are some of the top FMCG trends to look out for in 2023:
With more and more consumers becoming aware of the impact that their purchases have on the environment, sustainable packaging is becoming an increasingly important trend. Companies are looking for ways to reduce the use of plastic and other materials that are not biodegradable and to use more environmentally friendly materials in their packaging. Businesses that do not adapt to this trend might be losing out on profits, a 2022 Global Buying Report indicates that 70% of consumers consider themselves environmentally away, and 66% consider it important to purchase products that are packaged in environmentally friendly materials.
Plant-based products are becoming increasingly more popular, as consumers look for healthier and more sustainable food options. From plant-based meat alternatives to dairy-free milk, this trend is expected to continue to grow in the coming year. Plant-based foods are becoming a booming business as plant-based food sales have grown by 54% in the past three years.
We touched upon the topic of the growing vegan movement in this blog from 2019: The Vegan Movement Disrupted the Food Industry.
Consumers are looking for convenience in all aspects of their lives, and the FMCG market is no exception. This trend is manifested in the increasing popularity of on-demand delivery services and in products easy to prepare and consume.
When it comes to convenience, is there anything more convenient than ready meals? But we have reached a turning point when it comes to heat-to-eat meals; thanks to the brands we take a look at this blog: Are American ready meals re-branding from ‘land of the fast food’ to ‘land of the fresh’?
E-commerce is nothing new, but innovation in this space is still ongoing. In 2023 we can expect to see more companies using technology to make shopping online even more convenient, such as virtual and augmented reality, as well as artificial intelligence-powered chatbots to help customers make purchase decisions. In 2022, online grocery sales rose by 17% in the US alone. Companies need to keep up with new innovations if they want to remain competitive.
The focus on health and wellness is not new, but it is becoming more important as consumers become more health-conscious. Companies are introducing more products that are marketed as healthier alternatives to traditional products, such as natural and organic products, as well as products that are free from certain ingredients.
Consumers are willing to pay more for high-quality products, and this trend is expected to continue in 2023. Companies are introducing more premium products, such as luxury skincare, gourmet food, and premium drinks.
Consumers want to know what’s in their products, and they want to know where they come from. Companies are becoming more transparent about their ingredients and production processes and are highlighting their social and environmental impact. Adapting to this trend ensures that your brand is authentic and consumers are more likely to trust your products and company.
The FMCG industry will have to adapt to these trends to stay competitive. Companies able to provide products that are sustainable, healthy, and convenient will be well-positioned for success. E-commerce will play a leading role in the industry, and companies able to innovate in this space will tap into the growing trend of online shopping. With consumers willing to pay more for high-quality products, premiumization will be a key trend, and companies that can provide premium products will be able to capitalize on this trend. And finally, transparency will be a key element for companies that want to build trust with consumers.
The FMCG industry is facing a complex and rapidly changing environment, and companies must be able to adapt and innovate to remain competitive and meet the needs of consumers. Remaining competitive in an ever-changing industry might mean you need new recruits with a fresh perspective on business and the FMCG industry. Our team hit the mark every time recruiting talent for world-leading fresh food manufacturers – we understand their needs as well as the behaviours and values of candidates that make an impact.
Contact the team today to learn more about how we can help your business.
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