The Fast-Moving Consumer Goods (FMCG) industry is undergoing a significant transformation in response to the demand for more convenience, the COVID-19 pandemic, and changes in customer behavior. The major FMCG trends that address these changes involve sustainable product development and packaging, solutions improving customer experience, and digitization.
The tree map below illustrates the impact of the Top 10 FMCG Industry Trends in 2024. Innovations in the FMCG industry meet the growing consumer demand for convenience, sustainability, and engaging experiences. The permeation of smartphones globally also pushes the digitization and growth of eCommerce, driving companies towards implementing technologies such as AI, Big Data, IoT, Blockchain, and 3D Printing.
1. Sustainability in FMCG
Consumers are becoming more conscious of climate change and its impact on the environment. Thus, they pay more attention to companies’ social activities and seek those that offer more responsible product choices. As sustainability comes to the forefront, FMCG companies not only address how they present and package their products but also what materials they use in their products.
To meet consumer demand, more and more FMCG companies offer compostable, recyclable, and reusable packaging. Additionally, cruelty-free, vegan ingredients are on the rise not only in food but also in non-food items such as cosmetics and cleaning products.
2. Customer Experience
With the demand for convenience increasing in the FMCG sector, companies strive to significantly improve customer experiences. Startups employ Augmented Reality (AR) and Virtual Reality (VR) to make products more engaging and interactive. 3D videos and gamification attract and entertain customers while providing them with more information about the product. Further, investing in improving customer experiences builds trust and increases brand loyalty. To this end, more and more FMCG companies are providing higher convenience with digital technologies.
Digital transformation in FMCG is increasingly becoming a priority for brands as customers interact with brands across multiple online and offline channels. Companies get access to valuable data from these sources, including various social media platforms, web, and mobile applications- driving FMCG digital trends. Besides, it also allows FMCG brands to better engage with their customers and convert one-time buyers into repeat customers.
4. FMCG e-Commerce
The share of sales coming from B2C and B2B FMCG ecommerce is increasing exponentially. The outbreak of the COVID-19 pandemic has further shifted consumers’ shopping habits towards online channels. Brands are now building their online presence to boost their engagement with consumers.
Social media also plays a significant role in the world of e-commerce as more items are sold via social platforms such as Instagram. To this end, FMCG startups actively incorporate diverse media, leveraging mobile and headless commerce, to market their products.
5. Big Data & Analytics
FMCG companies actively leverage big data to innovate and compete in the industry. As consumer data is becoming more and more accessible with shopping online, brands explore new ways to increase relationships with their customers and gain insights from their behavior.
FMCG analytics explores customer preferences and behavior to provide FMCG companies with a deeper understanding of their purchase habits. Big data solutions and analytics in the FMCG sector allow brands to optimize communication with their customers and offer more personalized experiences.
6. AI in FMCG
AI-powered solutions, such as Machine Learning (ML) and Natural Language Processing (NLP) are gaining popularity and creating opportunities for the FMCG industry. For instance, voice-based systems support consumers round-the-clock to find products, in addition to recommendation engines that provide personalized product suggestions. By implementing AI-based solutions, FMCG companies provide an enhanced customer experience, thereby increasing customer satisfaction and retention.
7. Direct or Direct to Consumer Distribution
More and more FMCG companies are leveraging direct distribution to increase customer loyalty and ensure growth. For example, manufacturers directly interact with their end customers through their own online and offline distribution channels. This increases their profit margin and offers consumers a direct channel to reach their favorite brands. This FMCG industry trend is closely associated with e-commerce growth as well as the penetration of smartphones and the internet.
8. IoT in FMCG
As IoT evolves, its applications gain popularity in the FMCG sector. IoT devices are automated and affordable, enabling FMCG companies to employ them in brick-and-mortar stores, warehouses, and manufacturing facilities. One example of IoT device implementation is to provide targeted messaging to consumers while they are shopping.
Inventory management is another use case of IoT, both in stores and in warehouses. In combination with related emerging technologies, including ambient intelligence and smart objects, IoT creates new consumer interaction channels and revenue streams for FMCG brands.
The competition within the FMCG industry is increasing and brands invest in blockchain to gain a competitive edge. Smart contracts and blockchain traceability allows FMCG companies to understand their supply chain bottlenecks and make necessary interventions.
Blockchain also increases transparency for consumers by allowing them to track the source of their purchases. Additionally, blockchain platforms offer cryptocurrencies and loyalty programs that allow consumers to collect, exchange, and redeem points, increasing customer engagement.
10. 3D Printing
Additive manufacturing and its applications create disruptive solutions for the FMCG industry. The vast amount of waste generated by use-and-throw consumer products, from personal care to food packaging, prompts FMCG industry stakeholders to find sustainable alternatives. 3D printing allows FMCG brands and manufacturers to design and develop products that use eco-friendly materials and reduce plastic use.
To this end, FMCG companies leverage 3D printing for prototyping, designing, tooling, and scaling production in a sustainable manner. Further, food companies are able to offer extra nutritional value in their products by utilizing 3D food printing.
The new trends in the FMCG sector outlined here only scratch the surface of trends. Among others, sustainable product development, manufacturing, and packaging, with the help of AI, Blockchain, and advanced analytics, as well as opportunities to increase customer engagement, experiences, and satisfaction will transform the sector as we know it today. Identifying new opportunities and emerging technologies to implement into your business early on goes a long way in gaining a competitive advantage.