One of the few bright spots during the COVID-19 pandemic has been the consumer packaged goods (CPG) sector. Workers in this essential sector have heroically labored to ensure the goods consumers need have been available on store shelves. Analysts from IRi note, “COVID-19 continues to dramatically transform the CPG and retail landscape. E-commerce, dollar, and grocery have quickly become the channels of choice for most Americans, shoppers’ average spend per trip has increased by double digits and so has growth for many CPG categories.” CPG reporter Paul Hiebert (@hiebertpaul) believes the CPG sector’s strong performance will continue in 2021. He writes, “The pandemic has been tough on many businesses, but that hasn’t been the case for the makers of household cleaners and shelf-stable food. … Data shows the category’s streak is likely to continue well into 2021.” Below are some of the other trends experts suggest are impacting the CPG sector.
Consumer Packaged Goods Trends
Rise in e-commerce. As most people know, the pandemic and resulting lockdowns forced consumers to use the digital path to purchase for many of the products they desired to buy, including food. Hiebert reports, “The pandemic has altered not just what types of food people buy, but how they buy it. Numbers from data analytics firm Earnest Research, which tracks credit and debit card transactions, show that since March , U.S. adults have spent more than double on online groceries than they did [in 2019].”
Health, Well-Being & Safety Concerns Remain a Top Priority. According to experts from Acosta, a sales and marketing agency in the consumer packaged goods industry, health, well-being, and safety will remain at the top of grocers’ priority lists this year. Colin Stewart, Executive Vice President of Business Intelligence at Acosta, stated, “Many of the changes we saw implemented in 2020 due to the pandemic will carry over into 2021. Health and safety will continue to be paramount for retailers and consumers, and e-commerce growth will continue on its accelerated path.” He added, “Grocery shopping was not fun this year, and post-COVID, stores will need to make it a more enjoyable experience with unique offerings, better prices, and stocked shelves.”
Diversity and Inclusion Will See Increased Attention. Analysts from Cameron Smith Associates (CSA) note, “Diversity and inclusion is not a new concept by any means, but the consumer packaged goods industry is prioritizing creating a workforce that more accurately reflects its consumer base. Women drive 70 to 80 percent of all consumer purchasing through their buying power alone. In order to drive business and create products that meet the needs of and appeal to women, it makes sense to build a workforce that can best address how to design these products because they can accurately identify with the consumer — i.e. other women.” Gender is not the only factor to consider. McKinsey & Company analysts note, “In the United States, Hispanics will make up 23 percent of the population in 2030, up from 16 percent today, while the white population will fall from 65 percent to 55 percent. The Census Bureau predicts that the majority of children will be nonwhite by 2023.” As result, CSA analysts insist, “Developing a company culture that values and places precedent on diversity and inclusion as pillars of its company culture and offers benefits that promote a positive work-life balance isn’t just a CPG trend for 2021.”
Life Stages Will Receive More Focus. Most of the developed world is getting older and the CPG industry has taken notice. McKinsey analysts observe, “The world’s population is aging quickly. … By 2030, one in four Western Europeans will be elderly, as will one in five North Americans. But the trend will be just as marked in the developing world: China’s over-65 population will double to 16 percent of its total population, while India’s will almost double, reaching 8.5 percent. CPG companies will need to find innovative ways to meet the needs of aging consumers.” The CPG industry has also noticed that the most important consumer demographic has also changed. Journalist Greg Keating reports, “We all knew the huge shift from Baby Boomer to Millennial was inevitable. This year the Boomers were usurped by a more youthful audience, as Millennials became the largest generation in the U.S. workforce. IRi points out that the dollar share of CPG for Millennials will increase from 17% in 2018 to 29% [in 2021]. The double whammy for CPG marketing is that 40% of the Millennial market is also multicultural.” At the same time, CPG brands have noted the influence Generation Z has on their household buying decisions.
Increased Reliance on Technology. According to Acosta analysts, technology activation in the CPG industry will be accelerated. In line with the rise in e-commerce, CPG stakeholders will increase their e-commerce efforts focusing on ensuring there is seamless integration of store and online sales. There will be mobile-driven store designs and real-time, personalized shopper solutions. Keating observes, “Today, our smartphones are the primary tool for making purchases, and online e-commerce sales will top $4.8 trillion in 2021. Sales from the CPG category will account for nearly $721.8 billion of these projected figures. Building mobile-first digital strategies will be crucial to achieving sales goals this year and in the coming years.” According to Acosta experts, technology will also enhance auto-replenishment efforts via online consumer subscriptions. These efforts will go hand-in-hand with smart home shopping.
Inspirational Shopping Experiences. Now that vaccines are becoming available, supermarket chains are looking for ways to draw consumers back into their stores. According to Acosta analysts, they need to focus on in-store shopper services and meal solutions. They believe there will be a blurring of food at-home and away-from-home channels. Because the pandemic shutdown most in-store self-serve food options, Acosta experts say they will need to be reinvented. Like other economic areas, the CPG sector will make personalized offerings the norm and fulfillment options, like curbside pick-up or BOPIS, will become more efficient.
Supply chain is revitalized. At the beginning of the pandemic, headlines were filled with laments about the fragility of supply chains. According to Acosta analysts, supply chains are being re-energized and backroom, dark-store fulfillment processes are rising to meet demand. They also predict autonomous delivery options will forge ahead. At the same time, CPG stakeholders will return their focus to the traditional 4 Ps — product, price, promotion and place.
The sight of empty shelves where toilet paper and cleaning wipes once rested will be one of the lasting impressions of the pandemic. Analysts from IRi believe those impressions will have staying power. They observe, “Interestingly, economic downturns of the past have not created a significant surge in demand for package food categories. We believe future recessions will have a more positive impact on package food consumption.” They also note that lockdowns reminded people how much less it costs to make a meal at home versus eating out; and, in some cases, rejuvenated the joy in preparing meals. Finally, they note, “Pantry loading and more at-home consumption have created a trial surge that most observers thought we would never see. [As a result], big brands have fared very well due to a combination of supply-chain strength, brand recognition and consumers migrating to comfort/things with which they are familiar.” The world is more likely to ease out, rather than bust out, of the pandemic. As a result, CPG stakeholders should continue to do well in the coming year.
 Staff, “CPG and Retail Growth in 2020 and 2021,” IRi Insights, July 2020.
 Paul Hiebert, “5 Charts That Show Why CPG’s Run Will Continue Well Into 2021,” Adweek, 23 December 2020.
 Staff, “What are the Top CPG Industry Predictions for 2021?” Abasto, 7 December 2020.
 Staff, “CPG Trends for 2021: Diversity, Digital and the Transforming Workplace,” Cameron Smith Associates Blog, December 2020.
 Ishan Chatterjee, Jörn Küpper, Christian Mariager, Patrick Moore, and Steve Reis, “The decade ahead: Trends that will shape the consumer goods industry,” McKinsey & Company, December 2010.
 Greg Keating, “3 Trends Influencing CPG Marketing in 2021,” Hangar 12, 30 December 2020.
 Staff, “Capturing CPG and Retail Growth in 2020 and 2021 Amid a COVID-19 Altered World,” IRi, 9 July 2020.