Explore the landscape of trends for the upcoming year ranging from global impacts and consumer preferences to business strategy and marketing tactics.
With all the existing uncertainties in the consumer packaged goods space, 2025 brings new trends and continued themes to harness and be aware of for success in the new year. With topics spanning product variations, new legislation, economic influences and emerging technologies; there’s a lot to get into. These upcoming trends can be broken up into a few broad categories:
Although the COVID-19 pandemic is over there are still factors disrupting supply chains now along with new potential disruptors. With the war in the Middle East, there are shipping lane disruptions through the Suez Canal and an increase in natural disasters has disrupted supply chains to affected zones. Although these circumstances are unpredictable and constantly changing, the silver lining of the pandemic is that supply chains have become more resilient and adaptable than ever before.
The incoming administration has pledged to increase tariffs in an effort to protect US manufacturing and increase federal revenue and decrease debt. It is currently unclear how exactly these will be implemented but they are likely to lead to increased costs unless supply chains are reconfigured and manufacturing is diversified. With the tariffs specifically targeting China, Mexico, and Canada, manufacturing is likely to shift and domestic manufacturing that depends on raw materials from these countries will have increased costs. It will be important to optimize pricing as consumers are already very sensitive to increases after high inflation rates. Companies are already stock piling inventory in preparation for these changes which will impact their inventory carrying costs and consequently their bottom line. Along with Tariffs, the Trump administration may make changes to tax laws that affect operations of CPG companies. Some policy that may be impacted includes cost of capital, debt management, and R&D expensing.
The de Minimis exemption is the aggregate value of a shipment below which no tariffs or taxes are paid. The de Minimis exemption has been set at 800$ since 2016 and as a result there has been a flood of goods coming in from China that have not been inspected fully as they fall under this 800$ value. This has allowed for fentanyl and fentanyl precursors to be snuck into the country and the Biden administration wants to crack down on this practice. In September they stated that they are looking to deny the exemption from goods that would be subject to the section 301 China tariffs. This announcement is matched with hikes on existing tariffs of certain Chinese, as well as goods from other countries. It is unclear what stance the upcoming Trump administration will have on the de Minimis exemption but any changes will affect companies that are involved in international e-commerce and may affect import/export strategies.
In 2025 there will be new laws rolled out in 8 more states regarding data handling. These laws will require the disclosure of data handling practices to consumers, require contractual terms in processing agreements, allow consumers to request for their data to be deleted and also opt out of targeted advertising and sale of personal data.
Given these global trends, we predict that holistic revenue growth management will be less of a siloed function and more of an ingrained practice throughout the organization. This must run on a foundation of clean data and systems that enable cross functional collaboration.
Consumers continue to be focused on their health and well being and this is especially true in the beginning of the year after the holidays. Holistic nutrition is a big theme along with minimal ingredients and traceable sourcing. Reducing cortisol has been a big trend in 2024 and this goes hand in hand with the rise of stress reducing and immune boosting adaptogenic drinks and other mood enhancing supplements. There are also two diverging views which consumers have around diets; plant based and carnivore. Both of these trends have led to the creation of products to support each respective lifestyle. There has also been an emphasis on high protein and high fiber content in a variety of different products (ready made meals, snacks, drinks, desserts). Health and wellness means something different to everyone and this leaves much room for product development and innovation to support needs including: vegan, dairy free, gluten free, grain free, allergen free etc.
There are a few different themes when it comes to the unique flavors in food and beverages. There is a desire for nostalgic flavors where childhood favorites are reimagined with a new twist. Global fusion flavors are also trending; combinations of Asian flavors with classical western sweet treats, for example, have become very popular. Tying back into health and wellness, flavors that are driven by super foods and functional ingredients are also trending.
Self care is a facet of health and wellness that extends past foods and supplements and focuses on the ritual of making time for oneself. The rise of social media morning and night routines has led to consumers attempting to emulate these practices. Some products that are encompassed by this trend include skin care products, skin care devices, sleep trackers, exercise trackers, supplements, teas, coffees, candles, books etc. Products are often bundled to facilitate specific experiences that consumers are looking to recreate. One recent study showed that Americans spend an average of $83 per month on self-care.
Consumers continue to prioritize sustainability of the products they buy which includes the products themselves as well as the packaging. Traceable ingredients with sustainable farming practices are favoured along with recyclable packaging and refillable containers. As mentioned above, veganism and plant based products are also trending in large part due to mindfulness of an individual's carbon footprint. Zero-waste is another trend where consumers strive to create as little waste as possible, and although few can fully recreate this, it sparks the desire to reduce packaging. Customers are often willing to pay extra, maybe a dollar, to offset the carbon created from shipping the product to them. Laundry detergent sheets are a new sustainable option with compact and recyclable paper packaging and they are expected to grow in the US from $814 million in 2022 to $2.5 billion in 2030.
Consumers have exhibited declining trust in marketing claims made by CPG companies and seek input from sources they trust to make decisions about what to buy. These sources include family and friends, but also internet sources such as Reddit and reviews from influencers that they trust. They are also concerned about data privacy and seek transparency from companies.
As a result of inflation and skyrocketing prices of essentials like eggs this year, consumers are trying to lower costs. One way is by turning to generic and private label options. These products have grown in market share this year and are now also increasingly contributing to innovation, notably in the home care and food segments. There has also been a shift among consumer to eating at home more in order to cut down on costs. Consumers will also look at how they buy, whether buying more in bulk to lower cost per use or purchase smaller sizes to lower the immediate outlay.
For a few years now we have been focused on marketing to Generation Z and their preferences but Generation Alpha is now on the horizon. This new generation has been on screens and using technology practically since birth and as a result they often consume information across multiple platforms simultaneously and have a short attention span. Generation Alpha has values and preferences including: technological innovation, personalized experiences, global connectivity, social justice, and environmental sustainability. They are also influenced by the values of their parents who are primarily millennials. Strategies to reach this new generation of consumers include utilizing micro influencers, content challenges and give aways, branded interactive games, and educational content.
With the continued advancement of AI, marketing communications can become more personalized with added functionality including predictive purchasing recommendations, adaptive marketing messaging, and personalized digital experiences. Predictive purchasing recommendations are an AI analysis based on past consumer purchases and search history that predicts what products a consumer may be interested in. Adaptive marketing messaging is an agile style of marketing where messaging is changed based on a variety of factors to deliver a tailored message to the target audience at the right moment. AI can also help improve demographic segmentation into individual level analysis by looking at consumer behavior. This micro segmentation allows for granular consumer profiling and has dynamic segments corresponding to individual consumer archetypes.
Now more than ever it is critical to have an omnichannel marketing strategy. The key channels are social media marketing, targeted digital advertising, e-commerce integration, broadcast advertising, print media, direct mail, influencer marketing, interactive mobile experiences, augmented reality marketing, collaborations, partnerships, sponsorships, and retail media. One channel to highlight is collaborations, especially limited edition ones which often gather a lot of social media attention regardless of how good they actually are (Van Leeuwen’s Ranch flavored ice cream, Coke flavored Oreos and Oreo flavored Coke etc.). Unexpected collaborations keep the brand top of mind for the consumer and can result in increased purchases of base products.
As a result of declining trust and the exposing of many negative company practices and scandals consumers are more likely to turn to influencers than traditional media for product purchasing advice. It is a growing trend for micro influencers (small number of followers) to be thought leaders as they are seen as authentic voices. These influencers can be utilized via PR or ad deals although it is critical to maintain the genuine nature of this content for it to be successful. De-influencers are also worth being aware of as they can sway consumers away from your product, but also away from the products of your competitors.
With the growing success of private label products and desire for low cost options, building brand loyalty is more important than ever. Beyond providing exceptional products it is critical to connect with the consumers via community building, authentic storytelling and shared consumer values. Loyalty programs, special gifts and discounts, and exclusive popups can all be ways to drive loyalty.
Companies have recently come under a lot of heat for “shrinkflation” which has led to consumer distrust. Social media has highlighted the decreasing content of packages and sparked outrage online. In order to gain back loyal customers companies are rolling back pricing and also reversing shrinkflation. For example, Frito Lay is now adding 20% more chips back into their bags of Tostitos and Ruffles.
As both entities share the same goal of increasing sales to the consumer of their products, collaboration can truly help further these goals. With new technologies and best practices there are new strategies for this collaboration. Companies can create a data clean room to share data and create joint business planes. A clean data room is an environment with strict data protections and security protocols where it is ensured that there is compliance with privacy laws and regulations. This consolidated data can then be analyzed by AI to improve category management. Another potential collaboration would be a Customer 360 experience for personalized shopping and promotion recommendations when entering a store. Both CPG companies and retailers would benefit from enhanced store surveillance via computer vision to oversee restocking shelves and updating and validating promotional displays.
This is a really impactful capability that is reshaping the industry of consumer advertising. With continued advancements, the algorithms are using more and more inputs and generating more accurate and helpful recommendations. New features include multimodal data integration where browsing history, purchasing history, and social media interactions are utilized as inputs. Providers like Google and Meta have enhanced reach as they can see your preferences on Google search, Youtube, Facebook, and Instagram and properly curate targeted advertisements based on the content that is being consumed. As AI advancement continues to grow, functionality like emotion and context based recommendations and predictive lifestyle recommendations will continue to improve. However there is a challenge here of balancing incredible recommendations and user privacy.
In the post pandemic era, online shopping has boomed - increasing the volume of direct to consumer and e-commerce channels These channels can also be combined with the subscription model to keep consumers locked into your option with predictable monthly revenue while offering the consumer a decreased per purchase cost. We are constantly seeing the entrance of new products and industries into the direct to consumer sales channel.
In line with building trust and increasing transparency being top of mind for the consumer, ethical marketing practices help strengthen these promises along with building brand loyalty. These practices include honest product claims, clear ingredient disclosures, ethical sourcing, carbon neutral initiatives, fair labor practices, meaningful social impact, and data protection protocols.
AI can be utilized by CPG companies to determine their inventory management needs. The demand of the consumers can be forecasted with models which leads to supply chain optimization. Consumer preferences can also be used to help with product development choices.
An integrated approach to planning that breaks down traditional silos and allows for a synchronized business strategy. This cross functional approach integrates demand planning, supply planning, financial planning, marketing and trade promotion planning, and sales and operations planning into a cohesive plan. The benefits resulting from this integration are improved forecast accuracy, reduced inventory, and faster response to market shifts.
Mid-Year Consumer Outlook: Guide to 2025, Nielsen IQ
Circana's Year end 2024 Food and Beverage Outlook
Meltwater Marketing Trends 2025
The Future of E-commerce CPG Trends 2025
PWC CPG strategies for long term success
Simon Kucher 2025 Growth Playbook for CPG
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