CPG Industry by the Numbers Stats, Insights, & Analysis

The Consumer Packaged Goods (CPG) industry is a cornerstone of the global economy, fueling daily consumer habits and preferences with various products.

This sector is pivotal for driving consumer trends and its significant impact on economic growth and innovation.

This article dives into the most recent statistics, insights, and comprehensive analyses that outline this essential industry's current state and prospects.

We’ll explore:

Sales dynamics and consumer behavior statistics
Technological advancements and their integration within the industry
The challenges and hurdles the CPG sector faces

By offering an in-depth examination that converts extensive datasets into practical wisdom, we aim to provide professionals and stakeholders within the CPG sphere the knowledge they require to navigate an ever-evolving market landscape.

If that’s you, keep reading below.

CPG Industry Overview

Did you know the CPG industry is projected to add $3.18 trillion in value in 2024, with the U.S. contributing $821 billion? By 2031, the industry value is expected to reach $18.94 trillion, growing at a Compound Annual Growth Rate (CAGR) of 5.1% from 2022 to 2031. Let's explore some more key CPG stats below.

Plant-Based Foods Growth: Sales of plant-based foods are surging. The market was valued at $11.3 billion in 2023 and is predicted to grow at a CAGR of 12.2% over the next decade. Nearly 40% of shoppers choose plant-based milk, indicating a significant consumer shift.
Pet Care Industry: Valued at $320 billion in 2023, the pet care industry is expected to grow to nearly $500 billion by 2030. This growth is driven by rising pet ownership and the premiumization of pet food and services.
Health and Wellness Market: Rapidly expanding, the wellness market is projected to reach $7 trillion in the coming years. This growth reflects increasing consumer spending on appearance and health, favoring clinically proven ingredients.
Consumer Preferences for Fast Shipping: 48% of consumers are willing to pay more for faster shipping, highlighting the importance of efficient logistics in the CPG industry.
Buy Now, Pay Later (BNPL) Popularity: By 2022, over 44% of Gen Z digital buyers had used BNPL services at least once, with BNPL revenue up 72% year-over-year in Q3 of 2022.
Rise of Private-Label Products: 80% of customers who tried private-label products during the pandemic indicated they intended to continue using them. Inflation and the 2020 pandemic have contributed to the increased popularity of private-label products.
Omnichannel Sales: Brands offering robust omnichannel experiences see a 19% boost in total revenue, with those using at least three channels experiencing a 287% higher purchase rate than single-channel brands.
Marketing Spend in the CPG Industry: CPG brands spend an estimated $38.83 billion on advertising annually, with 64% planning to increase their retail media spending in 2023.
Shift from Price to Volume Strategy: With increasing retailer pushback and consumer resistance to price hikes, CPG companies are shifting their focus from raising prices to growing volume through innovative and profitable product mixes

Adoption of New Technologies in the CPG Industry

The Consumer Packaged Goods (CPG) industry increasingly leverages new technologies to drive growth, efficiency, and innovation. Recent studies and surveys have highlighted key trends and statistics in adopting these technologies.

AI and Analytics Adoption: A survey by NVIDIA reveals that AI significantly boosts operational efficiency and customer experiences in the retail and CPG sectors. Notably, 69% of retailers reported an increase in annual revenue due to AI adoption, with 72% experiencing reduced operating costs. The top AI use cases include store analytics, personalized customer recommendations, and inventory management. Moreover, 86% of retailers are interested in using generative AI to enhance customer experiences, pointing towards an omnichannel approach integrating online and offline channels for a seamless consumer experience.
Digital and Data Analytics (DnA) Transformations: McKinsey & Company discusses how leading CPG firms achieve substantial returns on investment (ROI) from DnA transformations. The Global Lighthouse Network, a World Economic Forum initiative, has seen a doubling in the number of CPG applications since 2020, from six to twelve. These transformations are helping firms achieve improvements across productivity, sustainability, speed to market, and customization. This shift is especially important in an industry where vast production networks are often composed of smaller sites, making broad-scale changes challenging.
Digitally Enabled Innovation: Another report by McKinsey highlights how digital tools are accelerating innovation within the CPG industry. By digitizing its innovation process, one beverage company could generate five times more new concepts and get products to market in half the time previously required. For CPG companies, leveraging digital techniques alongside innovation practices is emerging as a significant growth driver, especially in the face of rising supply constraints and rapidly shifting consumer preferences.
Data Transformation in Digital Initiatives: Deloitte outlines the importance of transforming disconnected product data into actionable intelligence for the CPG industry. Despite an 8% increase in technology budgets over the past three years, many CPG companies lack a cohesive data management strategy. A focused effort to improve product data can lead to end-to-end visibility, reduced costs, and increased internal development capacity. Companies are encouraged to develop data strategies, invest in transformation tools, and implement robust governance to support digital transformation efforts.

These insights reflect a broader industry trend toward integrating digital technologies to enhance efficiency, innovate product offerings, and meet evolving consumer expectations. The emphasis on AI, DnA transformations, and data management strategies underscores the potential for significant operational improvements and market growth within the CPG sector.

CPG Industry Challenges

The Consumer Packaged Goods (CPG) industry is navigating through a period of significant challenges and transformation as we enter 2024. Key issues stem from economic pressures, evolving consumer preferences, technological advancements, and regulatory changes. Drawing insights from various sources, here are the most pressing challenges the CPG industry faces:

Economic Pressures and Consumer Behavior: The industry is grappling with the aftermath of price increases in 2023 due to cost inflation. However, with no room for further price hikes, companies must fundamentally reshape their strategies to reignite profitable, volume-driven growth. This challenge is compounded by a predicted slow economic growth in 2024, leading to sluggish consumer spending. The ongoing cost of living crisis, characterized by inflation and declining purchasing power, has made consumers more cautious with their spending, favoring lower-priced or store-brand items over premium alternatives.
Sustainability and Ethical Considerations: A growing consumer demand for sustainability drives companies to adopt eco-friendly practices in product development and packaging. The industry is seeing a particular emphasis on "better-for-the-planet" packaging options and sourcing, reflecting broader consumer preferences for products with a lower environmental impact.
Technological Integration and Digital Transformation: The CPG sector is undergoing a digital transformation, significantly focusing on leveraging artificial intelligence (AI) for personalized nutrition and consumer engagement. Adopting AI and other digital technologies is essential for staying competitive, enhancing customer experiences, and streamlining supply chains. However, integrating these technologies poses challenges regarding investment, implementation, and consumer data privacy.
Changing Consumer Preferences: The shift towards health and wellness continues to influence product innovation, with a notable increase in the demand for better-for-you (BFY) products, functional foods, and personalized nutrition solutions. This trend pushes companies to innovate in product formulation, marketing, and leveraging technology for customized wellness plans.
Regulatory Compliance: New regulations, such as the Modernization of Cosmetics Regulation Act (MoCRA), introduce compliance challenges, especially in the cosmetics and personal care segments. Companies must navigate these regulatory landscapes to ensure product safety and maintain consumer trust.
Direct-to-Consumer (D2C) and E-commerce Strategies: The rise of D2C channels and the impact of e-commerce platforms are reshaping distribution and marketing strategies. CPG companies are adapting to meet consumer expectations for convenience, personalization, and online shopping experiences.

CPG companies must focus on strategic agility, innovation, and customer-centric approaches to address these challenges. Emphasizing sustainable practices, leveraging technology for personalized experiences, and adapting to the evolving regulatory and economic landscape will be key to navigating the complexities of 2024 and beyond.

What’s Next for CPG Firms?

This article provided a comprehensive overview of the Consumer Packaged Goods (CPG) industry, breaking down key statistics, insights, and analyses highlighting its current landscape and future potential.

The CPG industry is on the cusp of significant change, driven by evolving consumer preferences and technological advancements. Companies in this sector adapt rapidly, leveraging data analytics and digital transformation to meet new market demands and stay ahead of the competition.

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