Like many other industries, the FMCG space has had to navigate a huge deal of disruption over the last two years. Since the outbreak of the COVID-19 pandemic, some existing trends, like sustainability, have steadily grown in importance, while others, like direct-to-consumer (D2C) channels, have greatly accelerated, bringing market penetration three to five years forward in no time.
Also in line with other sectors, many FMCG brands are also expecting 2022 to be a promising year. A post-pandemic rebound is expected to result in global economic growth reaching 4.5% this year. But FMCG firms won’t be able to enjoy the benefits of this growth by sticking with the status quo.
For the current year, several innovative trends have already started to emerge, some building on existing market patterns and others being largely unforeseen. Below, we’ve listed the top four FMCG trends to be aware of if you want to make 2022 a year to remember for all the right reasons.
1. Sustainability - Be transparent
The sustainability trend does not simply represent a need for FMCG brands in 2022; it’s essential for survival. The importance of sustainability is certainly nothing new - the first NielsenIQ BASES Breakthrough Innovation Report, published 10 years ago, listed “sustainability” as a trend for retailers to watch - but it's a trend that has shifted focus as of late.
FMCG brands may once have been able to tap into the sustainability market by slapping an “eco” label on their products or switching away from plastic packaging, but consumers in 2022 expect more. They are aware of the trade-offs and difficult questions around sustainability. Is it more sustainable to buy locally farmed meat or internationally sourced vegan products? What is the carbon footprint of each item? Consumers want answers to these questions - and FMCG brands should supply them where possible.
More regulators are pushing FMCG brands to share the science behind their sustainability claims and consumers are responding positively. Since the start of the COVID-19 pandemic, one in five shoppers say they have acquired more environmentally friendly habits. Don’t just say how your FMCG brand can help consumers stick to these habits; show them.
2. Holistic wellness
Another major FMCG trend to look out for in 2022 is the rise of shopping habits that have holistic wellness as a focus. Recent research has revealed that shoppers are not only conscious of the impact that their purchases may be having on the planet but also on their wellness in general - combining their mental, physical and nutritional wellbeing. For example, more than half of consumers in the UK believe that having healthy food and drink options is important when grocery shopping.
This wellness trend can even help reposition FMCG brands that may previously have been associated with less healthy lifestyles. For example, last year, Innocent Plus and Birds Eye Green Cuisine were two of the FMCG products listed among Nielsen’s Top 25 Breakthrough Innovations In Europe. These two brands, with very different backgrounds and markets, demonstrate how organizations can tap into the wellness trend regardless of their current business models.
3. A personalized Direct-to-Consumer model
Personalization is set to become a priority for FMCG brand in 2022, and it’s likely that direct-to-consumer (D2C) strategies could be the primary method for achieving their goals. The COVID-19 pandemic saw D2C channels experience a huge sales boost (Nike saw sales grow in their D2C channel grow by 35% in 2020 alone). However, continued D2C growth shows that this is a market that will remain in place even after the pandemic has faded into memory.
For FMCG firms, D2C channels provide an opportunity to convert one-time buyers into repeat customers by offering them a truly personalized experience. For example, Heineken has recently enjoyed huge success with its Beerwulf subsidiary - a D2C marketplace that allows consumers to enjoy the benefits of a subscription service, letting them sample craft beers from small breweries through its digital platform. HIMS and HERS, Nespresso and Harry’s show that the D2C model can bring success across the FMCG sector.
D2C services also offer FMCG brands an opportunity to collect more data on their buyers - and the more data that these brands collect, the more personalized the products and services they can offer. Nutella, Coca Cola and Unilever are some of the FMCG brands to offer personalized packaging - and they’ve discovered a clear economic reason for doing so. One in five consumers that expressed an interest in personalized products or services during a recent Deloitte survey said they were willing to pay a 20% premium.
4. Prodforms - Bundling products and services together
Traditionally, most industries have competed by developing and offering physical products using standard business models that rely on the sale of tangible assets. But then digital players began turning the tables on these traditional companies, with brands like AirBnB, Uber, and Rent-the-Runway offering virtual experiences, remote distribution channels and data-driven business models. We are now seeing traditional brands trying to catch up with these disruptors by adding digital layers on top of their products, entering the era of “prodforms” - the hybridization of products and platforms.
In the FMCG space, we are already witnessing this prodform explosion, with cereals and chocolate bars containing codes for unlocking videogames, fashion collections boasting NFT twins, meals personalized online with nutritionist teleconsultations, and even dishwasher tablets bundled with online rentable machines.
The above trends are just a selection of those that are set to play a defining role in the FMCG space across 2022. What’s more, new developments are emerging all the time; don’t get left behind in this rapidly evolving industry.