Today’s CPG market faces a major challenge. Despite dollar sales of consumer-packaged goods going up, sector growth has actually been flat in recent years. If anything, inflation is the only thing countering the slide in volume sales. These difficulties shouldn’t be a surprise. We’re seeing slower than expected economic growth in multiple countries, leading to less consumer spending. What can CPG companies do in the current environment then? After all, pressures fueled by economic slowdowns aren’t the only thing they need to worry about. Increased regulatory measures have led to major changes such as removing key ingredients from popular products. Buyer preferences can shift quickly and unexpectedly, transforming trends into staples. The obvious answer is, of course, innovation. New and interesting products are what bring consumers into stores time and time again, as we’ve observed in the case of seasonal-inspired food flavors. The question, however, is how do we sustain the CPG innovation process in a market that puts the squeeze on profit margins?

The hazards of plastic pollution are well-known to many, including the potential to poison and entangle animals, and even to resurface in the human food supply where the chemical additives can prove especially harmful for the most vulnerable among us. In this milieu, CPG companies have taken an interest in biodegradable plastic—plastic that can decompose due to the action of living organisms, usually bacteria. Though biodegradable plastics are not necessarily made from biomaterials such as plants, CPG companies have more seriously considered biodegradability as a positive functionality of plastic (along with durability, strength, etc.) and its use often appeals to an increasingly environmentally conscious consumer base.

A big change is coming to store shelves. Late last year, President Obama signed a bill that bans the sale and distribution of products containing plastic microbeads. The law is part of an ongoing effort to protect our nation’s waterways. For the purpose of the new law, a microbead is defined as a plastic particle that’s less than 5 millimeters in diameter. Microbeads, however, can be found in all sorts of personal care products, ranging from toothpaste to exfoliating scrubs. They’re meant to cleanse and due to their miniscule size, wash down the drain.

For the first time since the financial crisis began in 2008, the U.S. Federal Reserve has increased short-term interest rates, citing job growth and a better economy as reasons for the change. But in terms of economic growth and employment opportunities, the good news has not lead to a mass exodus to buy luxury items. Indeed,consumers are still very much divided into two camps: survivalists and selectionists, where survivalists represent consumers who generally make less than $50,000 per year and look for cheap items. Selectionists are those who can afford to be more choosy and “select” for quality. For CPG companies, this often means that in terms of food items, beverages, household consumable products and personal care items, they must navigate two spheres of influence to maximize profits.

Fall has officially arrived! The leaves are changing color, there’s a chill in the air, and Halloween is just around the corner. But in addition to these notable characteristics, there is another way many mark the changing of the seasons: pumpkin spice lattes have made their way back onto coffee shop menus. No doubt […]