In the history of FMCG industry, the year 2020 will be remembered always because our economy and business witnessed some turbulent and unexpected changes. The COVID-19 pandemic has majorly impacted the attitude of the consumers and paved a new consumption pattern in them which is predominantly dominated by health & wellness, safety & assurance and taste & enjoyment. To cater to these growing needs of the consumers, FMCG companies are also bringing many new changes in their functioning.
Here are some emerging trends for 2021:
Health and Wellness
Proactive living and good health have become the driving factors of all the innovations and consumer attitudes. In the last couple of months, consumers’ focus has been intensified on health. 80% of people living across the globe are going to eat and drink healthy in the years to come. Consumers have understood the preventive health strategies now. Immunity strengthening products will be given more priority by the consumers for a long-term. A data by FMCG survey even shows that 43 percent of global consumers are actively looking for ingredients that strengthen their immunity with the everyday food and drink they consume. The most prominent ingredients that consumers will continue to consume are omega 3, vitamin, calcium, protein, probiotics/ cultures.
Investments in Digital
With social distancing norms in place and uncertainty to general business, larger players have also invested in digital technologies to reduce cost structure and increase business continuity. Companies are extending partnerships with multiple digitally native players to expand reach with digitally native customers. A large FMCG player is participating in the digitalisation journey for general trade (GT) – an app for its GT stakeholders now has 0.23 million outlets onboard and seen a double rise in order value and number of SKUs ordered. Companies have also invested in more agile planning solutions and explored digital in manufacturing to enable continuity to business and respond better to the crisis.
Safety and Assurance
After seeing so much of crisis in 2020, consumers are looking forward to those opportunities which don’t induce any risk both financially or health. As consumers are putting maximum emphasis on value and trust, the trend of safety and assurance has emerged. The coronavirus pandemic has also raised people’s awareness towards conserving the earth for better quality of life for us and future generations. They have realized that the way we treat our mother earth, it will also treat us in the same way. Even people have shifted to natural products and are no longer indulging in those products, which are made in unnatural ways and exhibit animal cruelty. Consumers are looking for such products which are natural, real, authentic and nutritional. They are not preferring any such products which they haven’t heard of.
Save to Thrive
Compared with pre-COVID-19 expectations, the percentage of respondents globally expecting positive revenue growth is down 40 points. In India, the outlook is down by 20 points. In India, according to a survey by Deloitte, 73 percent of the companies surveyed expect to undertake a cost reduction programme in the next 12 months. They are concerned with their current cost structure. Companies have cut down on their discretionary spending, Due to COVID-19, companies optimised on their trade spend, with focus on ensuring product availability in the channel (as consumers stocked up) and reduction in advertisement budget across major players. Reduction in advertisements, specifically television advertisements, saw various B2C start-ups take up top advertisement spots.
Taste and Enjoyment
While following the trend of eating healthy, consumers aren’t ready to compromise on health. A lot of home-grown exotic products will be on rise. With the advent of digitilisation and increase in influencer marketing, consumers will like to demonstrate the good taste and sophistication. Eating out will also be there in 2021 just for the need for comfort and escapism from the pressures of everyday life. While no matter how much positivity and freshness we usher in the new year but the truth is that the uncertainty from this year will continue into 2021 and beyond.