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Experts: Inflation, E-Commerce Require Companies to Rethink Strategies in 2022

During CPG Growth Strategies in an Inflationary 2022 – a recent webinar presented by IRI and RBC Capital Markets experts noted what to expect in the months ahead regarding food prices, the labor pool, and the world of e-commerce.


Inflation will still be an issue in 2022, said speaker Nik Modi from RBC Capital Markets. Based on calculations from RBC, food inflation is expected to be up about 6-7% in the new year, and for beverages it could be in the 7-8% range.

The rise in prices lately has led some consumers to trade down in what products they’re purchasing.

During the pandemic, people began trading up in quality of products, since they weren’t spending at restaurants, explained Krishnakumar Davey, president, client engagement at IRI. Now we’re seeing a reversal of that phenomenon, as consumers become more price sensitive.

Supermarkets have reported that shoppers are buying more store-brand meat products and trading down from beef to less-expensive alternatives such as chicken or pork, after prices for products such as rib-eye climbed about 40% from a year ago, according to data from IRI, The Wall Street Journal reported (Nov. 8).


By many accounts, employees increasingly want to work on their own terms. Perhaps it’s no surprise, then, that the gig economy is growing.

“This is the disruption that not everyone is talking about,” said Modi. “What is not discussed often enough is the gig economy and the disruption it’s having on the labor pool.”

Gig economy jobs are no longer limited to Uber drivers, either. On-demand platforms for sourcing business-related/high-skilled services, household/hand-made services, and home-sharing services have also become viable options for those looking for more flexible work.

“This is only going to grow,” said Modi, adding that gig workers globally are expected to grow by over 80% by 2023.


Modi predicted that, following explosive growth during the pandemic, e-commerce will “only become more profound.”

He explained that e-commerce shoppers are driven by experience. “Consumers that shop online are looking for experiences of exploration and discovery, more so than those shopping in retail,” he said. “They’re less driven by rational promotions – they want an experience.”

Modi noted that businesses must come up with innovative ways to offset margin dilution as a result of more products moving online. Chipotle, for example, recently reported double-digit sales growth, in part by reframing the delivery business model and pricing structure based around the value of experience by including premium, online-only SKUs to consumers, such as its quesadilla.

Chipotle provides the option for consumers to customize orders with items that are only online, and the chain charges 17% more in order to cover that margin dilution.