IRI, BCG identify 5 trends for winning in CPG
IRI and the Boston Consulting Group identified five trends exploited by the consumer packaged goods winners in their latest growth leaders report. According to the report, the best CPG companies successfully merged health and wellness with convenience, benefitted from the tailwinds driving growth across the convenience channel, capitalized on mergers and acquisitions to accelerate growth, tapped into ethnic flavor trends and leveraged their social media outreach.
Merging heath and wellness with convenience
The collective consumer focus on health and wellness has become more intense, observed IRI and BCG, driven by baby boomers and their quest to live “long and well.” For example, products making a non-GMO claim generated $4 billion in sales in 2016, representing a 64.3% lift in sales as compared with the year-ago period.
Convenience channel tailwinds
In 2016, the convenience channel accounted for more than 37% of total CPG growth. Convenience store dollars were up by 2.8%, while overall industry sales were up by 1.4%. Indulgent categories, including tobacco, alcohol, candy and sodas, were the winners in this category, as opposed to the health-and-wellness trend drivers.
Realizing growth through M&A
Since 2011, larger CPG players have lost more than $20 billion in sales to their smaller competitors. So if you can’t beat them, buy them. According to the report, both large and midsize companies are actively pursuing mergers and acquisitions in an effort to create sales growth.
Democratization of global flavors
Both Latin and Asian food trends have become pervasive, with higher regional specificity, as consumers’ palates become more adventurous, the report noted. For example, Frito-Lay launched its Passport to Flavor line in the summer of 2016, which includes such potato chip flavors as Brazilian Picanha, Chinese Szechuan Chicken and Greek Tzatziki.
Social media omnipresence
Social media is helping growth leaders expand the appeal of their collective brands beyond product attributes to make an emotional connection with the end consumer. For example, L’Oréal evolved its tagline “because you’re worth it” to #WorthSaying to create an interactive dialogue with their consumers around the topics that matter to them the most.
Merging heath and wellness with convenience
The collective consumer focus on health and wellness has become more intense, observed IRI and BCG, driven by baby boomers and their quest to live “long and well.” For example, products making a non-GMO claim generated $4 billion in sales in 2016, representing a 64.3% lift in sales as compared with the year-ago period.
Convenience channel tailwinds
In 2016, the convenience channel accounted for more than 37% of total CPG growth. Convenience store dollars were up by 2.8%, while overall industry sales were up by 1.4%. Indulgent categories, including tobacco, alcohol, candy and sodas, were the winners in this category, as opposed to the health-and-wellness trend drivers.
Realizing growth through M&A
Since 2011, larger CPG players have lost more than $20 billion in sales to their smaller competitors. So if you can’t beat them, buy them. According to the report, both large and midsize companies are actively pursuing mergers and acquisitions in an effort to create sales growth.
Democratization of global flavors
Both Latin and Asian food trends have become pervasive, with higher regional specificity, as consumers’ palates become more adventurous, the report noted. For example, Frito-Lay launched its Passport to Flavor line in the summer of 2016, which includes such potato chip flavors as Brazilian Picanha, Chinese Szechuan Chicken and Greek Tzatziki.
Social media omnipresence
Social media is helping growth leaders expand the appeal of their collective brands beyond product attributes to make an emotional connection with the end consumer. For example, L’Oréal evolved its tagline “because you’re worth it” to #WorthSaying to create an interactive dialogue with their consumers around the topics that matter to them the most.