5 Biggest Challenges in FMCG that you must be aware of

The Internet has not only changed the way products are manufactured and distributed it also has permanently changed the way consumer behaves and decides to buy. If not in tune with the challenges and trends in the industry, brands can quickly lose relevance.

Here are some of the most interesting Trends and challenges in the FMCG Industry –

1. Big Data

Data explosion is underway as the ability to acquire, store, and process data continues to improve exponentially. The FMCG world already had weekly consumer sales, brand tracking, consumer panels, shopper data from friendly and well-compensated retailers and another few hundred metrics depending on which data/analytics organization you talk to. 95% of the data being generated and sold to eager marketers and analysts is useless. The smarter organizations will buy only the relevant data (manage information costs), deduce the correct linkages to consumer behavior and use it effectively to develop products, manage trade and communicate effectively to consumers.

2. Social Media

Information now moves at a rapid speed. A tweet, FB post or a YouTube video can go viral in hours. No longer can an organization sell a product that was unsaleable in a developed market due to health concerns in another less developed market as regulations had not caught up. Regulations will take the time to catch up but consumer information is just a Google search away. Information dissemination will be rapid and with no place to hide. Smarter brands will employ innovative methods to use this effectively to reach globally while limiting brand communication costs.

3. Online Grocery Shopping

This is growing rapidly in most developed markets albeit off a small base. While most major brick and mortar retailers now offer online shopping and delivery, the birth of smaller online retailers with tight product lines and deeper prices will begin to emerge. And when some of this tight range online retailers grow big, brands which grew on the strength of adding a new flavor or fragrance every quarter will struggle as category and range management for a 500 SKU business will be easier, but brutal for brand owners.

4. Environment & Sustainability

Organizations that can demonstrate sustainability across their total ecosystem will benefit from stronger consumer bonding scores. However, the ability to charge a premium to cover increased costs will remain limited as consumers will increasingly see sustainability as a given rather than a perk to be afforded by few. The Tesla of the FMCG world is still to be created – using new innovations and technologies.

5. Aging

How different would a supermarket product range look if everyone shopping there was 50+? Filled with fresh foods, fish (salmon), wholegrain and few premium sweet offerings along with a large aisle of health supplements. This demographic has more money and will place a higher value on food quality. The challenge will be for brands to appear relevant to this aging demographic while being ‘cool’ enough to attract younger consumers.