Like seasons of the year, business landscapes are constantly changing. Nolan Bushnell (@NolanBushnell), an entrepreneur best known for establishing Atari and the Chuck E. Cheese, asserts, “Today, companies have to radically revolutionize themselves every few years just to stay relevant. That’s because technology and the Internet have transformed the business landscape forever. The fast-paced digital age has accelerated the need for companies to become agile.” Consumer Packaged Goods (CPG) manufacturers know as well as anyone that keeping up with the changing landscape can be difficult — but essential. This past year has witnessed tectonic shifts in the business landscape caused by changing consumer behavior. For example, Chris Campbell, Associate Content Manager at The Food Institute, reports, “Among the changes forced by COVID-19, the typical consumer lunch hour has shifted to in-home dining. And consumer packaged goods companies are betting that relocation is a trend that’s here to stay.” According to Google research, “83% of U.S. adults have changed how they get their food and what they eat.”
The changing CPG landscape
As more people get vaccinated and a “new normal” is established, no one can, with complete confidence, predict what the future will look like and whether changes forced by the pandemic will prove to be permanent. Journalist David Leonhardt (@DLeonhardt) imagines what a post-Covid 2022 might look like. He writes, “Life can finally begin returning to normal. But it will not be the old normal. It will be a new world, with a reshaped economy, much as war and depression reordered life for previous generations. Thousands of stores and companies that were vulnerable before the virus arrived have disappeared. Dozens of colleges are shutting down, in the first wave of closures in the history of American higher education. People have also changed long-held patterns of behavior: Outdoor socializing is in, business trips are out. … All of this, obviously, is conjecture. The future is unknowable. But the pandemic increasingly looks like one of the defining events of our time.” Below are some trends subject matter experts believe are changing the CPG landscape forever.’
1. Remote work is here to stay. Campbell writes, “McKinsey and Co. noted work from home will remain for the foreseeable future, at least in a hybrid model. In fact, the report found more than 20% of the workforce could work remotely three to five days per week as effectively as they could from the office. And if that percentage were to be realized, the number of people working from home could triple or quadruple the number of pre-pandemic at-home workers.” What does that mean for CPG manufacturers? Campbell predicts, “CPG companies will have an opportunity to appeal to value-oriented customers who don’t want to deal with the expense of having a meal delivered to their homes every day. By providing easy-to-make and value-centric products, CPG companies can leverage consumer demand for convenient and affordable lunches. Mid-day snacks could also prove profitable for CPG makers targeting these at-home employees.”
2. Shelf-stable products sales will decrease, but remain strong. The editorial team at PYMNTS.com writes, “The CPG sales inversion is coming. According to research firm IRI, sales are certainly set to fall in certain segments of the consumer packaged goods segment, with the biggest decreases on deck for things like canned soups and shelf-stable meats and vegetables, which IRI forecasts will fall by about 20 percent in the early months of 2021. Frozen foods are also expected to take a hit of roughly 10 percent in 2021.”
3. Increased socializing will bump sales in other CPG categories. According the PYMNTS team, “Candy, cosmetics and bottled water are all expected to bounce back in 2021 as consumers get back out there. The categories expected to see the biggest spikes this year were the bottom performers of last year — lipsticks, breath fresheners, gum, face makeup, hair spray, shaving lotion, men’s fragrances, hair styling gel and snack bars are all forecast to make a comeback.”
4. CPG manufacturers will become problem-solvers. The pandemic emptied store shelves of cleaning products and toilet paper. Consumers are now much more concerned about hygiene and cleanliness than in pre-pandemic days. Marc Pritchard (@marcpritchard1), Chief Brand Officer at Procter & Gamble, states, “What we’re now doing is looking at what are the problems that need to be solved. What we want to do is try to make it simpler.”
5. Direct to Consumer (DTC/D2C) is on the rise. Karl Lauri, Managing Team Member at MRPeasy, explains, “The disabling of many conventional wholesale/retail market channels during the Covid lockdown has prompted many brand-owning manufacturers to bring forward plans to build Direct-to-Consumer channels.” The PYMNTS staff adds, “It’s been a big year for consumers seeking to interact with brands directly. … According to Deloitte data, the digital shift has pushed CPG brands investment, indicating the D2C is the strategy going forward as opposed to a limited-time response to an unusual market. Among GPG executives surveyed, of those making investments, 80 percent are allocating resources to improving their eCommerce and shopping platforms, including a full 60 percent investing in their digital D2C channels.”
6. Consumers Are Looking for A Better Bundle. Subscription services are a manufacturers dream. Subscriptions bring in regular sales and enhance consumer loyalty. The PYMNTS staff notes, “Consumers are not only increasingly enthused about D2C connections with brands, particularly in subscription form, they are also rediscovering their love of bundles when it comes to those subscriptions — particularly when they get to control what’s in the bundle, according to PYMNTS data. Sixty-one percent of consumers reported they’d prefer bundling if they could choose the elements.” On the other, Sharath Dorbala, CEO at Vindicia, told the staff, “Subscription fatigue is a real thing.” The lesson to be learned is this: If you offer a subscription service, make sure it fits both consumers’ needs and budgets. If consumers believe they are being gouged, they will cancel their subscriptions and their loyalty will be lost. Packaging is also important. If products consistently arrive in damaged packaging, especially perishables, subscription cancellation is likely to be the result.
The PYMNTS staff asserts, “Being flexible is key to keeping consumers.” I agree. The question is: Even if they are flexible, how do CPG manufacturers know when and how they need to change? The answer, of course, is consumer data and cognitive technologies. Cognitive solutions, like the Enterra Shopper Marketing and Consumer Insights Intelligence System™, that can leverage all types of consumer data to provide high-dimensional consumer, retailer, and marketing insights. As journalist David McCandless (@mccandelish) explains, “By visualizing information, we turn it into a landscape that you can explore with your eyes: a sort of information map. And when you’re lost in information, an information map is kind of useful.” Understanding that landscape will always be an essential capability for CPG manufacturers.
 Chris Campbell, “CPG Companies Bet on Longer-term Remote Work and In-home Dining,” The Food Institute, 28 December 2020.
 Staff, “What’s New at Mealtime?” Think with Google, February 2021.
 David Leonhardt, “It’s 2022. What Does Life Look Like?” The New York Times, 10 July 2020.
 Staff, “5 Things To Watch In The Changing CPG Landscape,” PYMNTS.com, 1 February 2021.
 Karl Lauri, “Realising the benefits of Direct to Consumer,” Manufacturing & Logistics IT, 17 November 2020.