Related: Amazon’s Lofty Ambitions for Private-Label Fashion
Challenge No. 4: Product Cycles Are Speeding Up
Consumer Goods Forum, a global industry network, found that about 180,000 products globally were redesigned in 2016 to meet consumer demands for healthier diets and lifestyles.
It said it’s not uncommon for up to a quarter of a company’s product portfolio to be “reformulated” within 18 months.
That’s more than double the 84,000 reformulations in 2015, and vastly more than the 22,500 in 2014.
Related: Food Fight: CPG Firms, Retailers Race to Redesign Products
Challenge No. 5: Digital Channels Have Made It Easier for Upstarts to Gain Share
Online discovery and purchase platforms, along with social channels, have substantially leveled the playing field for new market entrants.
According to Nielsen data for the 52 weeks ended April 15, the 16 largest food and beverage CPG manufacturers, with combined sales of $233 billion, saw their collective share of the US brick-and-mortar market decline to 31%. That was down from 33% five years earlier. In comparison, about 16,000 smaller manufacturers, with annual sales of at least $100,000 each and combined sales of $145 billion, saw their total share of the market rise to 19% from 17%, which is equal to about $2 billion in sales, during the same period.
Related: An Increasingly Level Playing Field for Smaller Brands