As we look toward 2025, several key trends are set to redefine the way consumer packaged goods (CPG) companies operate and engage with consumers. From transparency and personalization to advanced supply chain technologies, the industry is poised for big changes as businesses aim to remain competitive and meet evolving customer expectations.
Here’s a closer look at four trends shaping the consumer packaged goods industry in 2025.
Changing Consumer Habits
While inflation has slightly subsided, it remains a significant factor influencing what, how and where consumers shop. Financial pressures have driven consumers to look for more discounts or cut back on spending wherever possible. Over 70% of consumers reported that they are looking for sales and coupons more often than before. Fifty-nine percent of consumers report cutting back on non-essential items, according to a survey from Kroger’s retail data science company 84.51°.
Most shoppers primarily seek discounts and coupons through the retailer’s website or app, as well as through retailer emails and cashback apps. Economic pressures and shifting consumer priorities have led to increased shopping at discount retailers and through eCommerce platforms. Brands that invest in omnichannel experiences and provide more opportunities for consumers to save on CPG products will benefit from increased sales and stronger consumer engagement in the year to come.
Focus on Transparency
Modern consumers value authenticity and want to align with brands that share their values. Shoppers want to know where products come from and how they’re made. Eighty-four percent of consumers say they would trust manufacturers more if they provided complete and easy to understand definitions for all ingredients, and another 65% of consumers say product transparency is important, according to research conducted by the Consumer Brands Association and FMI.
In 2025, CPG companies will become more transparent, utilizing digital solutions to increase product visibility, improve the shopping experience, and enhance customer satisfaction. For example, SmartLabel connects consumers with information right at their fingertips. With the scan of a QR code, consumers can access extensive product information including ingredient definitions, sourcing information, allergy management resources, food safety tips, sustainability practices, and recall updates. Brands will also use tools to enhance visibility across their distribution operations, improving the delivery process.
Advanced Technology Integration
Technology is transforming every aspect of the CPG landscape. From automation and cloud technologies to artificial intelligence, companies are increasingly modernizing their workflows to streamline and optimize their business processes. Technology investments are expected to increase next year. Companies are investing in AI-driven personalization tools to increase customer engagement and improve customer interactions. Cloud-based platforms can help businesses centralize, manage, and execute their distribution operations faster and more efficiently.
Unilever has introduced several tech-enabled efficiency and visibility measures within its ice cream segment over the years. Finding success in its AI-powered inventory technology, Unilever is equipping 350,000 freezers with the technology over the next two years. The software takes photos of the inside of the freezer and automatically delivers the images to the cloud where AI can determine the stock level and generate orders for distributors for low-inventory items. The company is working on increasing its data sets through the expansion to get clearer insights into product visibility.
Supply Chain Digitization
In 2025, supply chain digitization will continue to remain a focus amongst CPG businesses as they aim to make their supply chains more agile, efficient, and responsive. New technologies will help ensure seamless operations and reduce inefficiencies in manufacturing, distribution, and inventory management. Digital supply chain tools can help businesses improve agility, reduce costs, and ensure timely product availability.
Kimberly-Clark is restructuring its supply chain, accelerating the adoption of robotics and increasing network optimizations. The company has been ramping up investments in technologies to not only address unmet consumer needs but also bring greater focus to a new organizational model. The three core areas of focus include streamlining product sourcing and manufacturing processes, network optimization within manufacturing, and digitalizing the supply chain through automation. Implementing digital solutions to optimize supply chain processes will ensure faster, more reliable delivery while minimizing operational disruptions in the future.
As competition intensifies and consumer expectations grow, staying ahead of these trends will be critical to thriving in the CPG landscape. By keeping an eye on these trends and adapting accordingly, CPG companies can position themselves for success and growth in the year ahead.
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