Wednesday, December 12, 2018
"We expect to see the continuation of some trends that emerged in 2018, as well as several key new developments," said Colin Stewart, Senior Vice President at Acosta. "In 2019, the topic of price will be on the agenda for both manufacturers and retailers. With increasing transportation and commodity costs, manufacturers will be forced to increase prices, and retailers will be aggressively scrutinizing price inflation to stay competitive in a fragmenting retail environment."
Acosta's top 10 CPG predictions for 2019 are:
1. Resurgence of Frozen
After several years of decline, manufacturers have finally cracked the code on getting shoppers back into the frozen food aisle with cleaner labels and higher quality products that appeal to shoppers.
Shoppers are coming to the realization that frozen is healthy and convenient, with dramatic improvements in quality and variety of prepared foods.
2. More E-commerce Changes
Online retailers, such as meal kit services, will continue to move selectively into brick-and-mortar spaces or partner with established retailers to grow brand reach.
Brick-and-mortar operators will continue to catch up to e-commerce competitors.
Click-and-collect will continue to emerge as retailers refine implementation.
3. Continued Renaissance of the In-store Shopping Experience
Convenience, immediacy and the ability to browse and sample will continue to be key draws.
Additional in-store shopping changes could include:
Prepared foods and eating spaces
Individualization of experience
Sampling, education and entertainment
Integration with smart phones, such as deals, navigation, checkout and personalized offers
Possible advances in mobile pay
4. Smaller Store Footprints
Due to the slow death of the mall, anchor spaces will continue to be repurposed to entertainment and lifestyle destinations, like cinemas, arcades and even grocery stores, to drive traffic.
Expect to see pop-up stores fill empty retail storefronts for seasonal or promotional "limited time only" periods.
5. Grocery Home Delivery
With less cooking from scratch anticipated, grocery home delivery will expand to include prepared foods and complete meals.
These changes require the development of infrastructure of meal prep and additional delivery logistics.
E-commerce and home delivery create increased stress on trucking and delivery networks, and the infrastructure they depend on. Cardboard and other packaging suppliers and packaging waste will add to refuse challenges.
6. Omnichannel Experience
Retailers will focus on creating a seamless "omnichannel experience" for consumers, from the physical store to the digital shopping experience and "click-and-collect."
7. Naturally-derived Wellness Additives
CBD derived products will continue to rise in popularity.
The stigma of being related to cannabis will continue to decline as marijuana legalization expands and recognition of medicinal value grows.
8. Shopping Trip Composition Changes
Stocking up/pantry load shopping trips could be a thing of the past, as consumers are shifting towards quick, fill in shopping trips.
9. Return to Premiumization
As the recession fades, the value equation now favors quality, convenience and healthiness over pure price.
Big food CPG will rationalize product mix and acquire relevant challenger brands.
10. Price Increases
Increasing transportation and commodity costs will force price hikes.