The biggest trends in FMCG in the next five years, Canadean
Future trends in the Fast Moving Consumer Goods (FMCG) sector have been identified in a new report from market research organisation Canadean.
The new report by Canadean analyses future trend scenarios for the FMCG sector, and identifies the best opportunities in consumer markets over the next five years. Ronan Stafford, Analyst at Canadean, said the report found that emerging economies will play a huge role in the years to come.
The value of emerging economies
According to Canadean, the next wave of emerging economies will have one of the deepest impacts on global consumer markets in the next five years.
The impact of changes in consumer behaviour and industry practices in countries such as Mexico, Thailand and Egypt, and innovations from these countries that are transferred back to developed economies, will be worth up to US$1.66 billion worldwide in 2018.
“Companies have already seen the value in setting up innovation centres in emerging economies to help tailor their products to consumer needs,” Mr Stafford said. “However, innovations from emerging economies are now also transmitted back to developed countries,” he said.
Frontier for new packaging and flavours
Canadean found that brands saw the new markets in Latin America, Asia and Africa as a ‘frontier’ for packaging innovation and exciting new flavours.
“We increasingly see pack formats developed to keep costs low in emerging economies used to target austerity-minded consumers in Europe,” Mr Stafford said. “Meanwhile, consumers are now highly aware of global culinary trends and want more experiential flavours. This means that Far Eastern and African flavours and ingredients are high in demand,” he said.
“The more big brands invest in targeting consumers in Lagos, Jakarta and Hanoi, the better they will meet the value and experience-seeking needs of consumers in New York, London, Madrid and Sydney,” Mr Stafford said.
Low income, 45+ women are early adopters
According to Canadean, women aged 45 and over from low and middle income households in urban areas will be early adopters of innovation arising from companies investing in the next wave of emerging economies.
“The low incomes of many early adopters in the next emerging economies means that manufacturers need to simplify formulations,” Mr Stafford said. “This includes strategies such as using fewer ingredients to lower costs or investing in lightweight packaging that is still robust enough to withstand poor quality supply chains,” he said.
Companies need to target the next emerging economies now
In addition to measuring the value of targeting early adopters in 2018, the Canadean report evaluated the likelihood and impact on business practices of each scenario.
When all three dimensions were analysed, one scenario rose head and shoulders above the rest: The deep impact the next wave of emerging economies will have on consumer markets.
“These opportunities in the next emerging economies need to be targeted now, or companies will lag behind their competitors on not just opening up new markets, but in better meeting the needs of their current customers,” Mr Stafford said.