Consumer Packaged Goods (CPG) are products that are sold quickly and at a relatively low cost. These products include food, beverages, household essentials, personal care items, and many other products that we use on a daily basis. Grocery stores are one of the primary channels for the sale of CPGs, and the success of these products in grocery stores is crucial for both manufacturers and retailers. In this blog, we will explore the success rate of Consumer Packaged Goods in grocery stores and the factors that influence their success.
According to a report by the Food Marketing Institute, grocery stores are the primary channel for the sale of CPGs in the US, accounting for 85% of sales. The success of CPGs in grocery stores depends on several factors, including brand recognition, product quality, packaging, price, and promotion. Brand recognition is particularly important in the CPG industry, as consumers tend to be loyal to certain brands and are often reluctant to switch to a new brand. A study by Nielsen found that 59% of consumers stick to their favorite brands, and only 21% are open to trying new brands.
Product quality is another critical factor that influences the success of CPGs in grocery stores. Consumers expect CPGs to be of high quality and safe for consumption. In recent years, there has been a growing trend towards healthier and more natural products, and manufacturers that can meet these consumer demands are more likely to succeed in grocery stores. A survey by Deloitte found that 54% of consumers are willing to pay more for natural and organic products.
Packaging is also an important factor that influences the success of CPGs in grocery stores. Packaging plays a vital role in attracting consumers’ attention and conveying important information about the product, such as ingredients, nutritional value, and usage instructions. Manufacturers that invest in eye-catching and informative packaging are more likely to succeed in grocery stores. A study by Nielsen found that 64% of consumers are more likely to buy a product if it has clear and detailed product information on the packaging.
Price is another critical factor that influences the success of CPGs in grocery stores. Consumers are price-sensitive, and they tend to compare prices across different brands and retailers. Manufacturers that can offer competitive prices are more likely to succeed in grocery stores. However, price is not the only factor that influences consumer behavior. A study by McKinsey found that only 38% of consumers choose the lowest-priced product, while 62% are willing to pay more for products that offer higher quality, convenience, or better value.
Promotion is also a critical factor that influences the success of CPGs in grocery stores. Manufacturers that can effectively promote their products through advertising, discounts, and other marketing strategies are more likely to succeed in grocery stores. According to a report by the Food Marketing Institute, 76% of shoppers decide which brand to purchase while shopping in the store, and promotions play a significant role in this decision.
In conclusion, the success of Consumer Packaged Goods in grocery stores depends on several factors, including brand recognition, product quality, packaging, price, and promotion. Manufacturers that can meet these consumer demands are more likely to succeed in grocery stores. However, the CPG industry is highly competitive, and manufacturers must continuously innovate and adapt to changing consumer preferences to stay ahead of the competition.
Citations:
- “U.S. Grocery Shopper Trends 2019” by the Food Marketing Institute (https://www.fmi.org/our-research/research-reports/us-grocery-shopper-trends-2019)
- “Consumer Loyalty: A Statistical Analysis” by Nielsen (https://www.nielsen.com/us/en/insights/article/2013/consumer-loyalty-a-statistical-analysis/)
- “Capitalizing on the Shifting Consumer Food Value Equation” by Deloitte (https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/consumer-business/ca-en-cb-capitalizing-on-the-shifting-consumer-food-value-equation-a-consumer-study-en.pdf)