What is FMCG and what challenges are the industry facing?
FMCG stands for ‘Fast Moving Consumer Goods’. This covers everything from food and drink products like Coca Cola and Kellogg's to household brands and goods such as Colgate, L’Oréal and Ibuprofen. They often tend to be high volume, low cost items.
There has been much debate on the major factors having a critical impact on the Global FMCG Industry recently. If you are a consumer, a candidate, a client or a Blue Chip organisation some of the factors listed below may have an effect on whether your sales go up or down.
These factors help decide on whether a business is going to be around for the foreseeable future.
Speed of Social Media
This might not seem like a big deal but information moves at a much quicker speed and is much more accessible these days. Whether it’s a tweet, Facebook post or a YouTube video you always have to bear in mind that you can literally go ‘viral’ in a matter of minutes. In most instances this is a great opportunity as it means you will raise awareness for your brand, product or persona. On the other hand, your brand may be subject to complaints and potential embarrassment for all eyes to see.
This comes under three very separate categories but mainly stems from the current trend of consumers desiring both fresher and healthier products.
- Fresh and Locally sourced
The consumer desire for fresher product without any additives will drive development of fresh, locally sourced, ready to cook products. A number of these products typically appear in the ‘chilled’ part of the supermarket. This growth will be detrimental to highly processed products with long shelf life.
Experienced chilled Supply Chain’s will have a head start.
I need not say too much about this as we are are constantly subjected to news about obesity and what we should eat and what we shouldn’t. Cereals with 20% sugar are definitely on the out. Sugary beverages, snacks, biscuits and confectionery will see reduced consumption. On top of this we are bombarded by grocery shopping apps that tells us how much sugar is and fat is your basket!
Consumer knowledge of high sugar products to avoid will improve dramatically increase over the next few years. Fat was the old villain, now it is sugar's turn. Will obesity reduce? I hope so.
- Organic and Free Range
Organic and free range foods have enjoyed a growth spurt over the last few years and the industry continues to see the market grow. Categories have appeared not only in the high end supermarkets but in all of them across the board.
Environment and Sustainability
Manufacturers that show sustainability have stronger consumer scores however they are charging a premium for this and consumers are starting to see sustainability as a given not a perk. A Tesla of the FMCG world is still to be created.
I firmly believe there is a bright future ahead for those who can best adapt to our rapidly changing world. Investment, innovation and collaboration will be the watchwords for businesses, communities and nations that thrive over the coming decade.
The world's consumers are changing, and businesses serving consumers must understand the drivers that will transform our industries during the rest of this decade and beyond.