Taking Stock of CPG Past and Future: Gear Up Now for a Year of Growth

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Executive Summary: The Winds of Change Are Blowing

The CPG Industry Is Still Struggling to Find Growth: Across CPG channels and aisles, growth is still proving hard to come by even several years after the end of the Great Recession.

  • Dollar sales are growing, driven largely by inflation and declining merchandising activity; volume trends are weak across CPG channels, driven by a highly conservative consumer marketplace
  • Edibles is outpacing non-foods by a slight margin
  • Consumers will continue to rely on preplanning and online and offline deal-seeking strategies to keep CPG spending in check throughout 2016

Several Trends Offer Growth Opportunities in 2016 and Beyond: Myriad of new and existing trends will shape the CPG industry in 2016. Three trends hold particular promise for growth.

  • Circle the Wagons—The Internet will account for about 50 percent of industry growth in the next few years; CPG marketers must act now to capture their fair share of this $28 billion opportunity
  • Melting Pot Gets Hotter—Win in tier-two Hispanic markets and see growth of up to 10 percent
  • Do More with Less (Media)—Refine media exposures against household-level purchase propensities to increase media efficiencies by 10 to 40 percent

CPGs Looking to Win Will Work to Overcome a Variety of Challenges: There is no question that change is hard. But the marketplace, technology and data science are quickly evolving, so CPGs need to embrace change as an opportunity for growth.

  • The path to purchase has changed drastically during the past decade, and CPGs do not have a clear understanding of how consumers operate in the omnichannel retail world
  • Lack of granularity has prevented marketers from maximizing opportunities across an increasingly diverse consumer landscape
  • Excessive demographic-based targeting focuses on exposures, rather than impact, feeding information overload and creating media inefficiencies

Framework to Win: IRI has developed a comprehensive data integration platform and multidiscipline team of analytic experts to help you understand how key trends are impacting your brands and develop finely tuned strategies that will set the stage for growth in 2016.

  • Redeploy media resources to high-impact sites to increase awareness and shopper conversion
  • Enhance targeting, brand development and assortment strategies to drive Hispanic sales at the retailer/market level
  • Tailor and target your media exposures against your highest-propensity households

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