CPG Industry On Track for Growth in 2016

New report from IRI finds CPG industry struggled in 2015; should rebound in 2016

Originally published on C-Store Products online. 

It was a good(ish) year.

In 2015, the ebbs and flows of the economy had an effect on consumer spending, sure. And threats on brick-and-mortar retailers from online shopping grew, to be certain. But these lessons should help drive growth in 2016 as well as help manufacturers and convenience-store retailers alike determine trends for the coming year.

In IRI’s latest Times & Trends report, “Taking Stock of CPG Past and Future: Gear Up Now for a Year of Growth,” analysts looked back on the year that was, and worked to determine how 2016 would be the better for it.

Last year, growth was weakest in the frozen-food sector, where unit sales declined 1.5%, and strongest in beverages, where unit sales increased 2.9%. Growth was weak in nonfood departments. The tobacco sector was boosted by electronic smoking products, which grew 23.9% for the year.

Consumers will remain conservative with their money in 2016, though the study indicates that one-third of Americans feel their financial situation will improve in 2016. Fifty-seven percent will make their purchase decisions before they even enter your store, so IRI analysts encourage marketers to engage shoppers early in the planning process.

One-third of shoppers will choose brands based on coupons they have at home, and 29% will base purchase decisions on shopper loyalty card discounts, the study found.

IRI research and analysis isolated some trends that will offer growth opportunities for 2016 and beyond:

  • The growth diversity in U.S. households is altering shopper attitudes and behaviors. Keep a finger on the pulse of increasing ethnic diversity and the explosion of nontraditional families.
  • The urbanization of America will drive growth of smaller footprint stores.
  • Consumers are embracing a wide variety of healthier-living strategies. Look across CPG aisles for new ways to deliver healthier options for shoppers and the environment.
  • Consumers want to know what they’re putting into their bodies, what they’re feeding their pets and exactly what is making their houses cleaner. Answer consumers’ thirst for transparency and authenticity.
  • On-the-go lifestyles continue to have a profound impact on consumer eating behavior. Tap into grazing, the new sit-down meal.
  • The focus on big data is rapidly giving way to smart data that will drive smart growth. Marry big data with technology and analytic know-how to pave the way to growth.

Read the full article Here.

"CPG Industry On Track for Growth in 2016." CS Products Online. Convenience Store Products, 16 Jan. 2016. Web. 09 Feb. 2016.

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