The consumer products industry has reinvented itself during the pandemic. Numerous behavioural patterns have been replaced with new ones, consistent with the evolution of technology. In a way, it wouldn’t be an overstatement to say that pandemic stimulated a quick response action way before it was supposed to be called for. Hence, what we are witnessing in the consumer product industry today is futuristic with the advent of new reforms and changes in consumers’ inclination.

Macroeconomic Context of Pandemic for Consumer Products Industry

To put the current state of consumer products into perspective, it is crucial to look at the overall economic environment. Despite the slump in various sectors and growth in many others, the year 2021 has been better in many contexts. With the wider acceptance of the COVID-19 vaccines, consumer spending’s have increased, which has triggered the economic activities for the better. As a result, the U.S. economy is set to expand in 2021 after a slump of nearly 3.6% in 2020.

Given the challenges with the physical distribution, disrupted supply chain, as well as unprecedented volatility in consumers’ demand, some strains that the pandemic put in 2020 might continue in 2021. Below are the key takeaways from the overall game-changing performance of the CPG industry:

• Market Strategies have Reset to 0:

With the abrupt change in the market scenario led by the modifications in consumer preferences, consumer products companies are proportionately changing their go-to strategies. The industry players are rethinking their target customers, brand positions, supply channels, product portfolios, and service models.

Are these adjustments necessary? Indeed. The leading pack in the industry have reset their marketing strategy to realize the goals stumped by the pandemic in 2021. The focus and a large chunk of investment have been towards being on the distribution channels that resonate with customers--online and omnichannel.

• Increasing Resilience of the Supply Chain:

The qualifying factors of an efficient supply chain include low-cost supply, globalization, and minimal inventory. These goals stand high relevance even for the consumer product industry of 2021. Given the disruption in the supply chain due to broken logistics, companies struggle hard to stay afloat.

In such a situation, the shift is towards creating a channel that helps in predicting how the demand is and what the quick response should be. The game-changing factor for the consumer product industry is the increased flexibility and shift in the supply chain to different locations.

• Investment in the Future:

One thing is for sure. During the onset of the pandemic, a large number of companies witnessed a sharp decline in their revenue portfolios. As a result, companies consider acquisitions and mergers to reshape the corporate portfolio to lay a stronger foundation and position their companies in a better position.

Collaboration and mergers enable the best of two or more facilities and promise mutual growth, which has been recognized as an efficient model.

Who Wins the Consumer Product Game?

The consumer packaged goods industry sales have reached nearly USD 900 billion in the year 2020 with an increase of 10.4% as compared to that in 2019. Some industry leaders were able to sit on their position while others had a run to stabilize their overheads.

Among the others, Nestlé leads the pack with annual revenue of nearly USD 91 billion. The Swiss multinational conglomerate reached this position with its diversified offerings in dairy products, medical food, baby food, bottled water, tea and coffee, frozen food, and snacks.

Other significant players include Procter & Gamble for cleaning agents, beauty care products, and personal healthcare products, PepsiCo for comfort food and drinks, and Unilever for refreshments, beauty products, and cleaning products.

Who Loses the Consumer Product Game?

One of the key struggles of CPG companies was the distribution of their goods, while the sales were dependent on third parties. As a result, the adoption of the DTC (direct-to-consumer) model is seen widespread. CPG brands such as Colgate, Ocean Spray, Nike, witnessed a slump in their sales in the early pandemic months, which later on started getting to its normalcy post the adoption of the DTC model, offsetting the traditional retail struggles.