CPG Trends to Pay Attention to in 2022

As we inch closer to the end of 2021, it’s a great time to not only reflect on the year but also prepare for the next. The CPG industry has evolved rapidly to meet consumer demand, and whether you’re a multi-billion-dollar brand or a digital start-up, it is essential to pay attention to the 2022 CPG trends that lie ahead.

Data Science and Predictive Analytics

Analytics and big data have become a must these days. Due to increasing competition in the CPG marketplace, decision makers must consistently answer the following questions, among others.

• Who is buying our products?
• Which products are in greatest demand?
• Why is the demand for some products declining?
• Which marketing channels can help boost our customer base?
• Which discounts and special offers resonate with online visitors?

Fortunately, current technology can help brands gather the enormous quantities of data generated by the CPG industry. With the help of AI and advanced analytical tools, business leaders can measure and understand market behavior in real time and make decisions that will improve their brand value and increase sales. 

Sustainability & Flexible Packaging

This has been a growing trend for several years now, and according to a recent Hotwire survey, more than 47 percent of internet users say they would switch products if a brand went against their personal values. Top values cited by those surveyed included protecting the environment, climate change and transparency.

CPG brands are now focusing on using recyclable materials or disposable materials in the spirit of conserving the environment.

Flexible packaging is likely to see huge growth from now until 2030. Several characteristics of flexible packaging make it an ideal choice for CPG manufacturers, especially start-up CPG brands:

• Environmentally friendly options, such as compostable, post-consumer recycled, and biodegradable flexible packaging
• Fast turnaround and low minimum orders for the new type of digitally printed flexible packaging
• Beautiful design presentations that allow for brands to engage with consumers in new ways
• Resealable options that allow consumers to maintain freshness

Organic and Natural Ingredients

In recent years, individuals have become more concerned about living a healthy lifestyle, and consumer interest in healthy alternatives, such as natural and organic, has risen. 

CPG companies are responding and have started positioning themselves to appeal to the health-conscious. A new emphasis on transparency in the use of ingredients and the manufacturing process is designed to attract and maintain consumers who pay attention to the health benefits of the products they consume.

Labor Shortage

There has been a labor shortage for most of 2021, spanning almost every industry in the United States. According to a report by the Consumer Brand Association, only 12,000 jobs were added to the industry in the second quarter of 2021. 

The report also said that during the second quarter of 2021, CPG consumer levels had reached pre-COVID levels, but there weren’t enough workers to keep up with the 8.1 percent growth in CPG demand recorded for Q2 of 2021.

At-home consumption still remains the biggest contributor to CPG demand and is expected to put pressure on the industry at a time when the supply chain is under strain. 

Key players in the industry, such as consumer brand associations, are reaching out to government entities to propose new workforce initiatives to support advanced education in skilled trades, as well as proposing public-private jobs initiatives and education tax credits.

Live Streaming for CPG Marketing

Live streaming, also known as live commerce, is a new and effective way brands are using to connect with consumers, and CPG manufacturers are getting into it.

Advertisers are reconsidering how they approach their marketing efforts, and live streaming is one of the ways they can create brand awareness and increase sales. For example, Maybelline successfully used live commerce to drive $210,000 in sales in two hours for an audience of five million viewers. 

Yet another example comes from baby formula start-up Illume, which drove $176,000 in sales during a one-hour live event. This start-up experienced a 36 percent conversion rate, which was seven times higher than their historical ecommerce conversion rate. 

DTC (Direct-to-Consumer)

A growing number of CPG companies are now shifting to the DTC ecommerce model to keep up with the changing consumer demand, bypassing retailers in the process. In 2020, CPG ecommerce brought in $175 billion in revenue and continues to grow as we round out 2021. The pandemic encouraged shoppers to buy any and every type of product online, which gave the consumer products industry a distinct boost.

Previously, brands spent on average 24 percent of their revenue on marketing. Image advertising was the go-to marketing approach, but brands had zero visibility into its impact on consumer behavior. With DTC strategies, CPG brands have access to enough data to help them understand their consumers and create strategies that will make them more appealing. 

DTC is opening an avenue for CPG brands to cultivate strong brand affinity and generate brand loyalty. 

The market seems to be changing at an ever-accelerating pace. Any CPG company that wants to continue thriving as we approach 2022 must keep up with the trends. At Cameron Smith & Associates, we have established our reputation as a consistent leader among search firms in our industry by staying ahead of the curve and letting our industry knowledge speak for itself. Let’s start a conversation!