Consumer packaged goods (CPG) companies face a collection of challenges that puts immense pressure on them to adapt their business models. Senior partner Jessica Moulton and coauthors find that the megatrends that disrupted the CPG industry in the past decade are intensifying. These challenges include consumer fragmentation, escalating volatile costs, and a slowing global economy.
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A circular diagram shows the impact of 10 megatrends on the consumer-packaged goods industry over the past 10 years and projected for the next 10 years. The impact is measured on a scale from 1, for moderate impact, to 5, for high impact. The megatrends are divided into 4 categories: macroeconomic slowdown contains population growth stagnating, wealth expansion slowing, and China’s growth slowing; consumer fragmentation contains consumer attention shifting even more to digital, growing interest in “better for you” and “better for the planet,” and prescription weight loss drugs coming; mass-merchant squeeze contains supermarkets losing share and, in Europe, struggling with profitability and European private labels growing; and escalating, volatile costs contains inflationary period lessening but not reversing and heightened rate of crop failure.
For population growth stagnating, the impact was 3 over the past 10 years and is projected to be 5 for the next 10 years. For wealth expansion slowing, the impact was 4 and is projected to be 3. For China’s growth slowing, the impact was 4 and is projected to be 4. For consumer attention shifting even more to digital, the impact was 4 and is projected to be 3. For growing interest in “better for you” and “better for the planet,” the impact was 2 and is projected to be 3. For prescription weight loss drugs coming, the impact was 1 and is projected to be 3. For supermarkets losing share and, in Europe, struggling with profits, the impact was 4 and is projected to be 4. For European private labels growing, the impact was 3 and is projected to be 3. For inflationary period lessening but not reversing, the impact was 5 and is projected to be 2. For heightened rate of crop failure, the impact was 1 and is projected to be 5.
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To read the article, see “Rescuing the decade: A dual agenda for the consumer goods industry,” June 11, 2024.