2024-2025 CPG Industry Trends & Insights to Look For

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    • Ali KidwaiContent Architect
      The goal is to turn data into information, and information into insights.
    • CPG
    • Data Engineering
    • Supply Chain

    Editor Note: As we anticipate the trends defining the CPG industry in 2025, key themes emerge: a focus on profitable volume, enhancing customer loyalty through tech-driven experiences, strategic shifts in M&A, leadership in sustainability, and ongoing AI experimentation. Join us as we explore these transformative forces shaping the future of consumer-packaged goods.

    “The year 2024 will likely be characterized by slower economic growth than in 2023 and slower consumer spending growth. Yet it will probably be the last year of monetary policy tightening by major central banks. It is reasonable to expect a rebound starting in 2025. For global consumer products companies, it may make sense to focus on the longer term.”

    Dr. Ira Kalish, Chief Global Economist, Deloitte

    Economic Pressures and Consumer Behavior

    In the present state of economic uncertainty, the CPG industry is commonly the first and most highly impacted sector. This market is particularly responsive to any shifts in consumer preferences, inflation, or behavior, and can offer crucial insights into the complete state of the economy.

    In retrospect, we've seen how macroeconomic events such as - the covid-19 and Russia-Ukraine geo-political conflicts leading to supply chain shortages and increased inflation rates. Consumers have witnessed a consistent and considerable shoot in prices of goods, as firms strived to offset soaring operational costs.

    And while numerous firms had success in driving up prices — due to the trend of premiumization - the scales may've tipped too far. For instance, consumers are now trading down on essential commodities which is a signal for CPG leaders to adopt a disparate and more sustainable initiative for revenue growth.

    Additionally, as technology evolves record-breaking speeds, and is increasingly integrated into consumers’ lives and industries’ operations, the sector will have to navigate the opportunities and complexities of digital transformation, customer data analysis, and artificial intelligence (AI).

    With 2024 well underway, we dive into the key trends shaping the emerging CPG market in 2024-25. Here we go!

    Trend 1: Shift to Profitable Volume

    In the recent years, the way CPGs chose to deal with inflations and increasing input costs was by accelerating product prices. In 2023, the prices of goods soared to a new high, yet consumers continued to buy, resulting in healthy YoY growth for the sector. But cracks in the foundation are beginning to show.

    Consumers seem to have eventually reached a certain limit of how much they're willing to pay for certain products. And firms now recognize that the astronomic growth they recently experienced is imbalances to price hike, rather than volume gains.

    “Emerging markets are key to the renewal of volume growth, so CPGs must stay ahead of their rapid evolution."

    In Europe and the US, accelerated price accounted for 95 percent of retail sales value growth. At the same time, in China, the product volume and pricing were both under immense pressure amid low consumer confidence. Global profits in product volume have mostly come from current markets, with India being a top example of balancing growth between volume and price.

    retail sales volume
    (Explaining retail sales volume)

    In 2024, companies will use emerging markets to unlock product volume growth. Many will be moving away from price increases—only 2% of consumer products executives will focus on raising prices as part of their growth strategy, as per Deloitte. Instead, most C-suite leaders are implementing the strategy of profitable volume, which prioritizes selling more units while looking at profitability.

    In practice, this seems like divesting low-margin lines of business, climbing product marketing spend, investing in tech-innovation, and becoming more strategic with price setting. Eventually, the goal is to craft a more profitable product mix that retains as much pricing as is practical, while consistently increasing volume.

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    Trend 2: Strengthening customer loyalty with tech-enabled experiences

    Gone are the days when CPGs core focus was products on the shelves at retail outlets. Today, shoppers are shopping everywhere, whether online, via app or social media or in stores. In 2024, across the customer life cycle, emerging technologies has sparked new opportunities to personalize and enhance customer experiences. Some of these experiences happen at external touchpoints such as - marketplaces and search engines. Nonetheless, they all serve to build your brand.

    Eventually, consumers define a brand by the wholesome experience it offers, both digital and physical. And they have proven time and again that brand loyalty has a great impact on purchasing decisions.

    retail sales volume
    Source: PwC (Graph displays tech-assisted shopping on the rise)

    Notably, consumers who are more likely to utilize emerging technology are more loyal than most. And many who don’t already use emerging tech, are open to finding out more.

    "Research found that consumer goods companies bring products to market 50% faster at a third lower cost with double the return on investment when they engage in tech-enabled innovations."


    CPG firms can take benefits of the possibilities provided by AI and Generative AI to connect with consumers at a personal level, further consolidating their loyalty.

    Trend 3: New Strategic Approach to M&A

    “Organizations who invest in building ongoing M&A capabilities will be much better positioned than those who engage in episodic dealmaking.”

    Even though 2023 saw a downturn in M&A activity, professional experts predict a upturn of dealmaking in 2024 in the CPG sector. For those willing to increase profitability and withstand raising prices, acquisitions remain extremely lucrative, sustainable way to diversify.

    Moreover, the economic downturn and high rates of interest have decreased valuations for potential acquisition targets, making them more lucrative for buyers. CPGs with healthy balance sheets will have a selling benefit, as numerous private equity investors are hesitant to spend capital due to soaring interest rates.

    In 2024, the M&A activity will also highlight portfolio consolidation—reinforcing the core with established firms to build scale—rather than a “grow at all costs” approach. In recent years, organizations have been acquiring smaller, fast-growing competitors and adjacent firms without focusing on full integration, a technique that ultimately proved fruitless.

    consumer products practitioners expect
    (Consumer products practitioners expect divestiture activity to increase in 2024—that is, provided the price is right)

    On the whole, companies that invest in building ongoing M&A abilities will be better positioned than those that engage in episodic dealmaking, as per the McKinsey analysis. Further, leadership must stay on top of key trends and macroeconomic events to keep an advantage over those who pursue dealmaking without an in-depth market outlook.

    Trend 4: Leading on Sustainability

    Reducing waste is key because wasted products mean lost money. It is important for CPG companies to continuously evolve to reduce their wastage, it impacts the bottom line.

    waste generation projections
    Source: Statista (Plastic waste generation projections worldwide in tons from 2019 to 2060, by application)

    For numerous CPG companies, the gap between sustainability and delivery remained high in 2023—or even increased. At the very least, the gap can be narrowed in 2024, peculiarly if CPG organizations focus on the things that matter the most. To make it happen in real sense- measurable progress, sustainability must be a core initiative of functional and commercial leadership, if it isn’t already, supported by the right incentives and KPIs.

    The utilization of data analytics by ESG teams requires to evolve further from historical disclosure to a greater focus on data-led strategic planning and forecasting. Suppliers should be full partners in the push to lessen the cost of sustainable alternatives, helping to scale and test solutions. CPG brands must also keep the consumer onside, emphasizing the tangible benefits of sustainable production by emphasizing on "better-for-the-planet" packaging options and sourcing, reflecting broader consumer preferences for products with a lower environmental impact.

    Trend 5: Experimentation with AI continues

    Artificial intelligence (AI) can revolutionize various aspects of the consumer goods industry, allowing companies to gain unprecedented insight into their customers, create better products, and gain a competitive edge.

    More than ever, consumers are desiring personalization— AI allows organizations to connect with customers on a deeper level by delivering attuned experiences and products.

    "75% of the value Generative AI use cases can deliver are found in customer operations, marketing and sales, and R&D. All of which meet 2024’s call for price value and the demand for value with a purpose."

    Generative AI (GenAI), the latest iteration of AI that can curate new and original content, has already made waves in almost every industry. Within the consumer segment, specifically, GenAI has use cases that involve greater personalization, customer service, internal efficiency enhancements, actionable business insights, and improved product development.

    generative ai use cases spanning
    (Identifying Generative AI use cases spanning 16 business functions)

    In 2024, we anticipate seeing greater integration of Artificial Intelligence into CPG companies' strategies and operations. Particularly, AI will be a key tool for prioritizing sustainability and realizing profitable volume growth.

    Apply forward-thinking mindset to navigate the limitless possibilities that Generative AI unlocks.
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    Companies that adopt AI this year will be setting themselves up for reduced operating costs, greater efficiency, and greater customer satisfaction and loyalty.

    What’s Next for CPG Firms?

    This blog provided an in-depth overview of the Consumer-Packaged Goods (CPG) industry, breaking down key trends, insights, and analyses, highlighting its current landscape and future potential.

    Currently, the future of CPG industry is on the cusp of crucial change, driven by evolving consumer preferences and technological advancements. Organizations in this sector adapt swiftly, leveraging digital transformation and data analytics to meet new market demands and stay on top of the competition.

    As you navigate the challenges of the CPG world, remember that these shifts represent opportunities for innovation and growth. Reflect on the info shared here to make informed decisions that can position your business for sheer success in this dynamic environment.

    To learn how Polestar Solutions empowers consumer packaged goods (CPG) organizations to navigate the changing landscape with solutions across analytics, reach out to your CPG analytics experts today!

    About Author

    2025 CPG Industry Trends
    Ali Kidwai

    Content Architect

    The goal is to turn data into information, and information into insights.

    Generally Talks About

    • CPG
    • Data Engineering
    • Supply Chain

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