Accounting for around 20% of the country’s GDP, CPG provides a steady source of output and consumption critical for economic growth. The CPG sector directly employs over 20 million Americans in roles spanning manufacturing, marketing, logistics and more. These jobs run the gamut from entry-level positions to advanced technical and executive roles. CPG stands for consumer packaged goods, while FMCG stands for fast-moving consumer goods. The difference lies in the frequency of purchase and the shelf life of the products.
- Major brands invest heavily in upgrade factories with cutting-edge automation to boost output while reducing costs.
- During economic downturns, consumers are more likely to postpone purchases of durable goods, unlike consumer packaged goods which are regularly consumed and replenished.
- These high-volume perishable items are sold at retailers worldwide and are often purchased for immediate use by consumers.
- The marketing playbooks and operational blueprints refined domestically form the foundation to scale globally.
- Reflecting on 2024, it becomes clear that consumer preferences, technological advancements, and macroeconomic shifts have profoundly shaped the industry.
Definitive Guide to Consumer Packaged Goods (CPG) Industry: Key Segments, Trends & Leading Brands
Healthy snacks, functional beverages, and foods enriched with superfoods are becoming staples in consumer diets. Funding slowdowns, reduced mergers and acquisitions activity, and tighter investment conditions shaped the CPG landscape throughout 2024. “The brands that weathered the storm best were those that stayed true to their core values and business foundations,” noted Richard. She emphasized that in an unpredictable environment, success came from resisting the allure of chasing fleeting trends and instead doubling down on what made brands authentic. In Europe, consumer spending on wellness has remained steady despite inflation concerns.
Growing Reliance on Retail Media Advertising
It is projected to expand at a CAGR of 6.8% over the period from 2024 to 2030. This shows the demand for luxury fashion and accessories and underscores the resilience of the premium segment. The AR and VR market is expected to double between 2024 and 2028, and 40% of shoppers are likely to spend more on a product if they are allowed to test it through AR. AR and VR technologies are revolutionizing digital catalog, augmented packaging, product visualization, virtual try-ons, and immersive brand experiences. Consumers can view products in fine detail from various angles, enjoying a more enriched experience than traditional images or videos provide.
Choose interlocking capabilities that play to your strengths
AI is playing a pivotal role in the CPG industry, from analyzing market trends to personalizing consumer experiences. AI technologies enable companies to gain deeper insights into consumer behavior and preferences, leading to more effective product development and marketing strategies. With decreasing customer loyalty and a bloated market, you need to stay ahead.
Biggest CPG brands
- The rise of snacking fuels growth in convenient on-the-go options like nutrition bars and single-serve packs.
- Brick-and-mortar retailers continue to be vital and irreplacable channel for CPG product distribution.
- Retailers are looking for suppliers that can help them reduce their own direct and indirect emissions.
- The spread of electric refrigeration in the 1920s and 30s allowed brands to expand into new perishable categories like frozen foods and refrigerated dairy products.
- The sector contributes approximately $2 trillion to the United States gross domestic product (GDP).
- Steph has more than a decade of market research experience, delivering insights for national and global B2C brands in her time at industry-leading agencies and research platforms.
Buying store brands (also called “private labels”) has taken root in the lives of consumers. The appearance category includes purchases like hair care and skin care products while the health category includes products like OTC medicine and at-home healthcare products. McKinsey reports the top two areas of consumer spending in this sector are appearance and health. Another category of CPG products that’s showing rapid growth is the wellness market, which is predicted to bloom into a $7 trillion space in just a few years. Overall, the plant-based food market was valued at $11.3 billion in 2023 and is predicted to continue growing at a CAGR of 12.2% through the next decade. In particular, as the number of shoppers buying online grows, the amount that CPG brands spend on digital advertising has been growing.
Localized production via smaller regional plants provides proximity reducing lead times and mileage. Smart packaging adaptations ease portability – such as concentrated formulas and lightweight durable containers suited for e-commerce. While CPG e-commerce still lags behind categories like consumer electronics, adoption accelerates across generations. By 2025, some projections estimate 20% of CPG sales will happen online amounting to $150 billion domestically. The convenience of subscription and recurring delivery models suit routine CPG replenishment purchase patterns.
This past year has seen major shifts in consumer behavior — thanks to the economic uncertainty brought on by global inflation, paired with other significant consumer concerns such as international conflict and climate change. As brand loyalty becomes ever-more important, understanding consumer behavior has never been more crucial for CPG brands’ success. The data-driven nature of the CPG industry is pushing manufacturers to embrace digital transformation. Chatbots, virtual assistants, and AI-driven messaging platforms are being used to deliver personalized and cpg accounting seamless shopping experiences.
The food and beverage subcategory leads all spenders with $1.94 billion in advertising costs each year. Visit us at Hannover Messe 2025 to see our circular manufacturing campus in action, including real-world CPG innovations. Gain firsthand insight into what’s shaping the future of industrial automation – including next-generation robotics, industrial AI, next-frontier industrial tech, cyber income statement security, and software-defined open automation. Attest’s powerful survey platform can connect your business to 150+ million consumers across 59 countries. The platform offers an easy-to-use survey builder where you can create surveys targeted to niche audiences and gather a combination of qualitative and quantitative data. Retail marketers are embracing generative AI, but its value lies in aligning it with business and marketing strategies.
INDUSTRY GROWTH AREAS
The CPG industry is witnessing a significant shift towards products that promote Accounting for Marketing Agencies health and wellness. Consumers are increasingly seeking items that offer benefits such as improved gut health, relaxation, and energy. This trend reflects a broader movement towards holistic well-being, driving CPG companies to innovate in product formulation and marketing to cater to this demand.