4.Online grocery shopping
This is growing rapidly in most developed markets albeit off a small base. While most major brick and mortar retailers now offer online shopping and delivery, the birth of smaller online retailers with tight product lines and deeper prices will begin to emerge. Most modern developed market retailers carry anything from 10,000 to 25,000 SKUs (product lines). Imagine an online retailer with only 500 SKUs or even lower. And when some of these tight range online retailers grow big, brands which grew on the strength of adding a new flavour or fragrance every quarter will struggle as category and range management for a 500 SKU business will be easier, but brutal for brand owners.
5.Environment & Sustainability
Organisations that can demonstrate sustainability across their total ecosystem will benefit from stronger consumer bonding scores. However the ability to charge a premium to cover increased costs will remain limited as consumers will increasingly see sustainability as a given rather than a perk to be afforded by few. The Tesla of the FMCG world is still to be created.
However, the larger manufacturers will try and create separate brands and business units to capture the green consumer, some of these will succeed provided they manage to distance their legacy brand from the new green offering.
6.Manufacturing Consolidation
As mega factories open across Asia and Eastern Europe, cost of production will continue to come down due to massive economies of scale. Helped by the increase in number of free trade zones and agreements, it will make less sense to have factories all over the world – rather a mega unit optimised to be placed near source of raw materials and the bigger markets. Over the last 50 years the growth of global FMCG organisations has been driven by trying to sell a broadly similar product to all parts of the world. This has also resulted in organisations becoming more centralised in new product and brand development while keeping local operations to optimise the in-market execution.
7.Retailer polarisation
The current trend of the price discounters and premium high end retailers both growing at the expense of the middle ground retailers will continue for a while till the middle ground figures out a way to fight back. Fight back they will with sharper and more relevant positioning (using themes of sustainability, ethical & local sourcing, etc.) while re-inventing their range architecture and pricing strategies. Those that don’t will perish rapidly as they get stuck in the middle with reducing share and supplier investment (trade spend)
8.Ageing
How different would a supermarket product range look if everyone shopping there was 50+. Filled with fresh foods, fish (salmon), wholegrain and few premium sweet offerings along with a large aisle of health supplements. This demographic has more money and will place a higher value on food quality. The challenge will be for brands to appear relevant to this ageing demographic while being ‘cool’ enough to attract the younger consumers.