FMCG Trends: Shaping the Future of Fast-Moving Consumer Goods

WHAT IS FMCG?

The FMCG industry is an important part of our daily lives, changing constantly. But what exactly is it? Let’s go to the beginning. These acronyms correspond to Fast-Moving Consumer Goods (FMCG), products that sell quickly at a relatively low cost. Some examples of FMCG products include drinks, beauty products or cosmetics, packaged foods, cleaning supplies, and more.

In the world of the food industry, we can find a wide variety of FMCG, such as:

• Beverages: Water, juices, energy drinks, coffee and tea. 

• On-the-go food: Salads, sandwiches, wraps, canned food. 

• Condiments: Jams, house sauces, dressings.

• Snacks: Granola bars, nuts, chocolates, cookies, packaged desserts.

The FMCG industry has evolved over the years from pre-industrial times. Although there is no exact date of the term's creation, it was coined in the second half of the 20th century, and its use expanded between the 1960s and 1970s with the development of the consumer goods industry and product marketing.

Now that we know what FMCG represents, let's examine the industry's direction, trends, and challenges in the coming years.

FMCG TRENDS 

DIGITAL TRANSFORMATION

Consumer habits have evolved, and so has their way of shopping. For instance, consumers have shifted from dining in person or buying themselves in convenience stores to ordering directly through apps. Convenience stores, once the go-to for FMCG, now share the market with the convenience of mobile devices.

E-commerce Growth

When we talk about changes, we can't overlook how the pandemic year greatly accelerated e-commerce. Online sales jumped 43% in 2020,  according to a report from the U.S. Census Bureau.

The forecast suggests that this trend will continue to increase, with global retail sales of $5.8 trillion recorded in 2023 and estimated to reach $8 trillion by 2027.

The strategic goal of any FMCG point of sale, whether a supermarket, convenience store, pharmacy, department store, market, gas station, or other, should be to capitalize on the rise in online ordering. 

Adopting technology and integrating management software is essential to achieve this. Solutions like Deliverect Direct can boost service efficiency and help your business stand out by enabling you to create a custom online ordering system. Additionally, this feature integrates with Deliverect Pay, allowing customers to pay using various methods such as Apple Pay, Google Pay, Visa, or Mastercard.

Omni-Channel Strategies

When discussing an omnichannel strategy in the retail sector, we refer to the integration and coherence that must exist in all customer contact points with the brand or the store. The buyer experience must be fluid and consistent between all interaction points: physical establishments, applications, social networks, and websites.

To achieve this, it is essential to maintain a uniform brand essence across all channels. This includes colors, design, and communication that the point of sale upholds. All touchpoints should be directly associated with the store's branding, strategy, and features.

Technological Innovations in the Retail Industry

Key technologies are transforming how customers order products and how those products are delivered to them. While we could go into more detail on this topic, let's take a brief look at some of these innovations

• Virtual assistants: Taking orders has long ceased to be exclusive to humans; many companies have opted for chatbots and virtual assistants that process orders instantly.

• Big data and information technology: Advanced data analytics enables companies to predict demand, optimize distribution routes, and improve inventory management.

• Robots: In addition to advanced systems, robots are now commonly used in warehouses. They manage inventories, optimize logistics, and can even prepare orders.

• Delivery: Some companies have used drones and autonomous vehicles to deliver their orders on time, especially in particularly congested areas.

Digital Payment Solutions

Today’s stores offer various digital payment options to enhance convenience and transaction security. Among the most popular are:

• Mobile payments: Apps such as Apple Pay and Google Wallet allow customers to pay using smartphones.

• Contactless credit and debit cards: Many cards are now equipped with NFC technology for quick, tap-to-pay transactions without inserting the card.

• Online payment platforms: Services like PayPal and Square make handling payments in-house and for online orders easy.

Retailers increasingly require sales software that allows them to see what is happening at the point of sale in real-time. Only then can they offer an agile response.

Today, establishments can integrate contactless or mobile payment solutions to ensure seamless transactions through platforms like Deliverect. These platforms offer numerous POS integration options, centralizing payment information and providing an all-in-one solution. This integration updates your inventory and streamlines the sales process across multiple channels, allowing for comprehensive sales analytics and customer insights.

Deliverect Direct also offers helpful tools to improve online sales, including Social Media Ordering, which links to businesses' social networks and streamlines consumer payments.

New Challenges 

But with all this Digital Transformation come new challenges. If customers have more options to place their orders, how can stores, supermarkets, or other points of sale manage them? How will they keep accurate stock control? Most importantly, how can they meet demands across different channels and keep the user experience consistent?

This happened to One Stop Stores, owners of 1,000 convenience stores in the UK. In 2020, they faced the challenge of continuing to operate online with three different marketplaces: Deliveroo, Uber Eats, and Just Eat. 

Seeing that orders exceeded manual capabilities to keep track and make effective deliveries, they used Deliverect to integrate their in-store POS system. This allowed them to share sales and inventory data between online channels, manage the menu for all three markets centrally, and improve the customer experience.

Sustainability and Ethical Consumption

Since consumers are more aware of the environment, FMCG companies are responding by reducing plastic use, boosting recyclability, and investigating sustainable packaging solutions, including compostable.

Eco-Friendly Packaging

The rise of plant-based products is a major trend within the consumer goods industry, certainly driven by consumers increasingly demanding more sustainable options from large companies. According to a report by Grand View Research, the global plant-based products market has been growing at a CAGR (Compound Annual Growth Rate) of 11.9% since 2020, and these products are expected to reach $74.2 billion by 2027.

As the trend continues to grow, we will likely see more innovation and investment in this area. From meat to sustainable packaging alternatives.

This trend can be observed in the retail sector using plant-based products such as straws, cutlery, plates, napkins, and packaging. Bamboo, plant-based plastics, recycled paper, compostable films, and reusable packaging are some of the sustainable options increasingly gaining popularity.

Ethical Sourcing and Production

There is a growing interest in the details of supply chains. Clients also choose you because they know or expect you to share that sense of responsibility for the planet, and this includes not only what you communicate or the product you sell as such but everything behind its development.

Transparency in supply chains is important in positioning a brand in the market. It is not strange that retailers respond to this demand from their supply chains, associating with suppliers that provide detailed information about their practices, the origin of their vegetables, whether or not they are organic, and, of course, whether they follow non-animal cruelty practices.

Waste Reduction Initiatives

As any industry grows, the amount of waste also increases; that is no different in the retail industry. Customers expect the brands and points of sale where they purchased their products to take action to minimize this waste and promote sustainability.

In this context, we can say that POS plays a fundamental role since it helps maintain exhaustive inventory control. Stores can monitor their stock in real-time, identify consumption patterns, and adjust their food requests for products more precisely.

Integrations with modern POS also give detailed reports on product performance and sales trends, thereby reducing excess inventory and minimizing food waste.

Health and Wellness Focus

The health and functional foods and beverages industry is evolving rapidly, driven by a growing awareness of the connection between nutrition and health.

The market for healthy products has been growing steadily, and as consumers become more conscious, brands that can cater to this growing market stand to gain significantly.

Also, adding functional food to their product portfolio can be a game-changer for brands in the FMCG industry. 

Health-Conscious Products

Organic and healthy products are here to stay. In the coming years, FMCG brands will have to make an effort to offer increasingly healthier products and redouble their efforts in communicating their products' benefits. 

Responding to current consumer demands means offering a product different from competing products.

Functional Foods and Beverages

In this search for foods that are more nutritious or impact beyond basic nutrition, functional foods appear. These foods can contain a mixture of vitamins, prebiotics, minerals, and fibers, among other things. In fact, this industry is expected to generate 586.1 billion dollars by 2030.

But that's not all, by offering functional food options, brands can serve consumers who are looking to improve their well-being or achieve a specific goal with their nutrition.

Many categories can be explored; However, some specialists claim that the most promising categories among functional foods are sports nutrition, dairy products, and bakery and cereals.

Personalized Nutrition

The emerging personalized nutrition industry operates at the intersection between food, health, medicine, technology, and science. As such, the value chain is significantly fragmented and complex.

As consumers demand personalized nutritional solutions, FMCG brands are leveraging technology and data to offer personalized diet plans, supplements, and snacks.

Convenience and On-the-Go Consumption

Ready-to-Eat Products

We are seeing an increasing interest in healthier and more natural options in ready-to-eat products. It is no longer enough to resolve what to eat quickly; the demand for minimal additives, clean labels, and organic ingredients is increasing. 

New companies are emerging in subscriptions and meal kits, creating a market for products and enabling consumers to prepare healthier meals through monthly subscriptions. At the same time, some food delivery apps, in addition to offering delivery services, have partnerships with supermarkets or even have their own stores where they offer a variety of FMCG products.

FMCGs have not only taken over digital channels, in recent years we have seen an increasing number of spaces where they can be found. It is no longer just in supermarkets, convenience stores or gas stations, it is increasingly common to find vending machines in train stations, shopping centers, airports or offices.

Not only that, but where we used to see drinks and some snacks, now customers can find prepared meals ready to eat on the spot: lunches, salads, sandwiches, pastas, and more.

Closing Thoughts

In a world where speed and convenience are essential, the FMCG industry is uniquely positioned to keep up with its pace and influence consumer preferences and behaviors. 

Companies can build a solid foundation of trust and loyalty by integrating digital payment solutions, adopting eco-friendly packaging, and promoting transparency in supply chains. Furthermore, by focusing on health and wellness, FMCG products can transform consumer perceptions and significantly contribute to a healthier and more sustainable future.