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CPGs Need Fresh Strategies Beyond Price Increases in 2024

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With price increases no longer being an option after those implemented last year, CPG companies need to find new tricks up their sleeves to be successful in 2024 – a topic examined in depth recently by Bain & Company in its first annual Consumer Products Report.

Targeting emerging markets is imperative.

“Emerging markets are key to the renewal of volume growth, so CPGs must stay ahead of their rapid evolution,” Nader Elkhweet, a Bain & Company executive, said in the report. “They can’t get sidelined by eB2B marketplaces that increasingly act as value-added wholesalers to smaller retailers.

“Tomorrow’s winners will instead take a proactive role in the consolidation of this still-fragmented, digital route to market.”

Brands also need to simplify and find ways to cope with a more sophisticated and less uniform consumer. Regrowth will also require reshaping value propositions and portfolios, the report noted.

“Tomorrow’s winners will vary how they generate demand across their portfolios, with mass activation for their biggest brands and more targeted treatment for niche and insurgent brands,” Kyle Weza, global co-lead and brand accelerator for Bain & Company, said in the report.

Bain & Company’s findings revealed a few eye-opening statistics, such as:

  • 82% of respondents said inflation had a major impact on their businesses, making it the biggest issue of all for executive teams.
  • The leading CPGs that were analyzed increased prices by more than 20% on average since Q3 of 2021.
  • Half of global consumers say sustainability is one of their top four considerations when shopping and that they’d be willing to pay about 10% more for sustainable products.

Technology’s Emerging Role

Taking advantage of digitalization and evolving technologies will also play a big role in helping CPG brands succeed in the near-term, Bain & Company indicated.

“Predictive AI planning and supply chain traceability will connect companies more seamlessly to customers, bringing benefits such as fewer out-of-stocks,” Rajesh Narayan, global lead–enterprise technology in CP, Bain & Company, said in the report. “Executive teams will also use digital tools to break down internal silos and fuse tech with talent.”

Appealing to consumer preferences like sustainability is also imperative for brands.

“While upfront costs can be big, the CPGs that get this right will take a longer-term view,” Bain & Company executive Harry Morrison noted. “They’ll recognize that stimulating consumer adoption of sustainable options today will result in scale benefits that will make those alternatives cheaper to produce over time and create defensible brand advantage.”