Consumer behaviors have changed significantly. Some consumer groups are demonstrating a willingness to pay premiums for sustainable and innovative products, while others are engaging in value-seeking behaviors and focusing on essentials. In many categories, brand loyalty is weakening, requiring companies to reassess their value proposition relative to what their core consumers truly want and need.

Consumer packaged goods (CPG) brands are facing an especially complex landscape, where shifting consumer demands may be just the beginning. Companies are also having to navigate economic pressures, rapid technological change, demand for greater personalization, and more.

Key CPG industry issues

CPG companies often operate in a more fragmented consumer market, and they may need to adapt to changing consumer expectations amid intensifying competition, growing operational complexity, and a shortage of talent. Success in this evolving landscape will likely require agility, innovation, and a keen focus on sustainability.

Six strategic imperatives


CPG companies may need to move beyond considerations such as market share and start thinking about what makes their product relevant to consumers to help them succeed in the new consumer market. Brands that succeed will likely be those that are close to their customers and can identify and adapt to changing attitudes and market conditions quickly. 

We’ve identified six strategic imperatives that provide a comprehensive framework to help CPG companies navigate this complex and rapidly evolving marketplace:
 

1. Grow with new channels and market pathways



Companies should consider embracing digital, direct, data-driven capabilities and new ways of getting their products to market that connect with consumers. This may mean leveraging data and AI to enhance consumer experiences and drive sales or collaborating with retailers in adapting large language models (LLMs) that tailor product placement recommendations based on individual shopper needs and preferences.

2. Expand market share through agile portfolio innovation



New sources of consumer data and insight can increase relevancy, unlock new categories, encourage innovation, and help develop new services. Companies can offer unique and engaging product experiences, such as creating modular or customizable products that consumers can personalize. CPG companies can also work to attract environmentally conscious consumers with eco-friendly products and sustainable practices like offering refillable products.

3. Scale by expanding market frontiers



CPG companies can fuel growth by increasing investment in new markets, new segments, and new geographies. In the past, entering a new market might require years of study and investment, but new technology and strategies can help to reduce the risk. By continuously evaluating market entry and exit strategies, companies can focus on high-growth opportunities and respond quickly to demand surges.

4. Drive breakthrough efficiency and margin with modernized tech



To better compete in markets that are increasingly fragmented and changing rapidly with consumer tastes, CPG companies may need to rely on technology to increase efficiency, reduce costs, and make their supply chains more flexible and resilient. Developing these technological capabilities should include foundational investments in cloud infrastructure and cybersecurity to strengthen core operations.

5. Revolutionize performance with integrated, predictive operations



Using predictive analytics, companies can scour their operations at a granular level, unlocking untapped value by improving accuracy, responsiveness, pricing, and marketing. By integrating a variety of data from multiple sources, CPG companies can create a unified foundation that enhances both internal and external operations.

6. Lead with sustainability and social responsibility



By leading with environmental and social responsibility, CPG companies can improve their value proposition, driving growth, building resilience, and enhancing brand loyalty. These efforts should include ethical and transparent business practices—from procurement to labor practices to sourcing to environmental stewardship of supply chains.

Navigating the future of the CPG industry

CPG brands are facing volatility, technological disruptions, and rapidly evolving consumer expectations. To navigate this convergence of pressures, companies may need to rethink sourcing, pricing, production, and retail strategies in real time. 

Download our full report to learn how CPG companies can balance traditional strengths with new capabilities—maintaining their core competencies while developing the agility to respond to rapidly changing market conditions.

In an era of unprecedented disruption, Deloitte specializes in positioning CPG companies to thrive. Whether it’s optimizing operations, enhancing customer experiences, or scaling for growth, we provide tailored solutions designed to propel our clients to success in a rapidly evolving industry.