Fast-moving consumer goods (FMCG) is an industry that is continuously evolving. Every year, new trends emerge that shape the future of the industry. In this blog post, we will look at the top ten trends to look for in the FMCG industry in 2024. These trends are based on extensive research and analysis of the current market and are expected to play a significant role in shaping the future of the FMCG industry.

1. Increased Focus on Sustainability

The FMCG industry is increasingly turning towards eco-friendliness. More and more brands are adopting sustainable practices in production, packaging, and distribution. In 2024, there is expected to be a significant shift towards green and environmentally friendly products. Customers are becoming increasingly eco-conscious, demanding a change from the traditional wasteful practices of the industry. As sustainability comes to the forefront, FMCG companies not only address how they present and package their products but also what materials they use in their products.

To meet consumer demand, more and more FMCG companies are offering recyclable, compostable, and reusable packaging. Moreover, cruelty-free, vegan ingredients are on the rise, not only in food but also in non-food items such as cosmetics and cleaning products.

Flexi-Hex, a startup based in the UK, manufactures eco-friendly packaging that enables FMCG companies to minimize packaging waste.

2. Personalization for Enhanced Customer Experience

Consumer demands have changed over the past few years. Customers want unique goods that are tailored to their specific needs. Personalization and customization are the new buzzwords for the FMCG industry. Startups utilize Augmented Reality (AR) and Virtual Reality (VR) to enhance product engagement and interactivity. By incorporating 3D videos and gamification, they captivate and entertain customers while delivering additional product information. Furthermore, investment in improving customer experiences fosters trust and cultivates brand loyalty. As a result, an increasing number of FMCG companies are leveraging digital technologies to provide enhanced convenience. In 2024, there is likely to be mass customization of goods that cater to individual preferences. Companies will leverage technology to meet specific consumer needs, ultimately resulting in a more satisfying customer experience.

Nigerian startup Chekkit provides a consumer intelligence solution aimed at enhancing customer engagement. This innovative solution enables FMCG companies to establish closer connections with their customers through personalized messaging and communication.

3. Growing Implementation of AI and Machine Learning

Advanced technologies like Artificial intelligence (AI) and Machine Learning will dominate the FMCG industry in 2024. Companies will leverage these technologies to analyze customer data, predict consumer behavior, and optimize processes, ultimately leading to higher efficiency and cost savings. The implementation of AI and machine learning solutions will also lead to greater product innovation and development.

According to TechSci research report “Artificial Intelligence (AI) Market By Offering (Hardware, Software, Services), By Application (Image Recognition, Natural Language Processing, Speech Recognition, Computer Vision, Other), By Business Function (Finance, Security, Human Resource, Law, Marketing & Sales, Operations, Supply Chain Management), By End User (BFSI, Fashion and Retail, Healthcare and Life Sciences, Manufacturing, Automotive, Aerospace and Defense, Construction, Other), By Region, Competition, 2018-2028,” the global artificial intelligence (AI) market was valued at USD 135.83 billion in 2022, with a compound annual growth rate (CAGR) of 36.62% during the forecast period. The market growth is driven by rapid technological advancements and innovation in AI, increasing adoption across various industries, expanding data ecosystem and supportive regulatory and government initiatives. However, there are certain challenges that the market faces, like ethical and regulatory concerns in AI adoption, and issues related to data quality and accessibility.

 4. Digitization of Supply Chains

The FMCG industry is facing increasing pressure to streamline supply chain operations. Customers are expecting faster delivery times and better-quality products. To meet these expectations, companies will need to digitize their supply chains in 2024. The adoption of new technologies like blockchain will enable companies to achieve greater efficiencies in the supply chain and ensure better product safety and traceability.

Moreover, digital transformation has become pivotal for brands as interaction between brands and customers takes place across several offline and online channels. Companies gain access to valuable data from these sources, including various social media platforms, web, and mobile applications, which drives digital trends in the FMCG industry. Additionally, it enables FMCG brands to enhance customer engagement and foster customer loyalty, leading to repeat purchases. You can learn more about consumer interaction solutions impacting the FMCG sector.

Gladminds, an Indian startup, provides a cloud-based platform that serves as a bi-directional communication channel connecting brands and customers. Through Gladminds' Connected Platform, companies can harness their brand experience to deliver customer value.

5. Use of Augmented Reality

Augmented reality (AR) is changing the retail game by allowing customers to experience products virtually. In 2024, AR technology will be widely adopted by FMCG companies as a tool to engage consumers. This technology will enable companies to provide immersive customer experiences, boosting engagement and ultimately driving sales. AR can be leveraged in areas like product packaging, advertising campaigns, and in-store experiences.

•          Enhancing Product Packaging:

Product packaging is one of the most effective ways to draw customers' attention to your products. Augmented Reality can make the packaging much more interactive and engaging. For example, Coca-Cola's Christmas campaign in 2018 featured an AR-enabled packaging that allowed users to create personalized virtual messages to send to friends and family. Through this campaign, Coca-Cola was able to increase customer engagement and promote social sharing.

•          Improving In-Store Experience:

AR can enhance the in-store experience by providing customers with a virtual product demonstration. For instance, L'Oreal's Makeup Genius app uses AR technology, which allows customers to see how various shades of makeup will look on their face before they purchase them. This helps customers make more informed decisions about their purchases, leading to higher customer satisfaction and sales.

•          Creating Interactive Advertising Campaigns:

AR can be a valuable tool to create interactive and engaging advertising campaigns. For example, PepsiCo's #FutbolNow campaign used AR to create a virtual soccer game, which encouraged customers to interact with Pepsi products for a chance to win prizes. Through this campaign, PepsiCo increased customer engagement and brand loyalty, generating positive publicity.

6. The Rise of Voice Commerce

Voice Commerce isn't just a buzzword; it's a transformative trend that's redefining the e-commerce industry. Voice commerce is a technology that allows customers to use voice commands for purchasing products where a voice-enabled device is present. With the proliferation of voice-activated smart speakers and virtual assistants like Amazon's Alexa, Google Assistant, and Apple's Siri, consumers now have the power to shop using just their voice. With the increasing popularity of such digital assistants, it is no surprise that voice commerce is becoming a significant trend in the FMCG industry. In 2024, enterprises are likely to develop voice commerce solutions to tap into this emerging market.

7. Rise of Plant-Based Products

Plant-based products are becoming increasingly popular due to rising concerns about the negative environmental impact of animal products. The world is beginning to see an increase in the number of people switching to plant-based diets. A shift towards a plant-based lifestyle can have numerous benefits - both to an individual's health, as well as the environment. This shift has also made its way into the FMCG (Fast-Moving Consumer Goods) industry with the rise of plant-based products. Businesses have recognized the change in consumer demand and are trying to make their products more ethically and environmentally aligned.

Plant-based products are becoming more popular as people are becoming more health-conscious. Consumers are looking for plant-based alternatives to meat and dairy products for various reasons - from being lactose intolerant or allergic to reducing their environmental footprints. Veganism and vegetarianism have also gained popularity, causing a shift in demand. The FMCG industry has had to adapt to this.

The FMCG industry has started to offer more options for plant-based products, through innovation, research, and development. New plant-based products are being launched frequently, and businesses are introducing vegan alternatives in their product lines. Plant-based milk, burgers, sausages, and yogurts are some examples of products that have gained popularity. These products are usually made from a variety of plant-based ingredients like soy, oats, almonds, and peas.

8. Focus on the Aging Population

The global market for the aging population is becoming increasingly important for FMCG companies. As per statistics, an estimated 1.5 billion people in the world will be over 65 by 2050. Companies need to focus on this market as this demographic will have specific needs and preferences, which companies can leverage to create targeted and specialized product lines.

9. The Growth of E-Commerce

As more consumers opt for online shopping due to convenience and the current pandemic situation, FMCG companies are also shifting from traditional brick-and-mortar stores to e-commerce platforms. E-commerce sales are expected to continue to grow in 2024. Realizing this trend, companies are focusing on boosting their online presence, providing a seamless shopping experience, and improving delivery times.

According to TechSci Research “Ecommerce Platforms Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented by Type (Hosted Ecommerce Platform, Self-Hosted Ecommerce Platforms), By Deployment Model (Cloud-based Ecommerce Platforms, On-Premises Ecommerce Platforms), By End User Industry (Retail, Fashion and Apparel, Electronics and Appliances, Food and Beverage, Others), By Region, Competition, 2018-2028,” the market size of the Global Ecommerce Platforms Market was USD6.73 billion in 2022, accompanied by a robust compound annual growth rate (CAGR) of 15.34% during the stipulated forecast period. The market growth is driven by various factors like rise in online shopping, rise of social commerce, and increase in omnichannel retail.

10. Focus on Health and Wellness

Health and wellness have become a significant trend across all sectors of the FMCG industry. Companies have started to offer products that cater to specific health needs like gluten-free diets, low-carb diets, and plant-based diets. In 2024, FMCG companies will continue to focus on producing products that promote better health, either through the use of healthy ingredients or formulas that cater to the needs of specific consumer groups. Today, the focus is no longer on simply providing convenient products. Instead, it’s about providing products that consumers can feel good about using – those that are not only good for health, but good for the planet too.

One of the biggest shifts in the FMCG industry has been the move towards more natural, organic products. Consumers are looking for products that are sustainably sourced and free of harmful chemicals. This has created a new market for products that have been certified organic, vegan, or cruelty-free. We are seeing more companies shift towards using recyclable or compostable packaging, indicating a commitment to environmental sustainability. With COVID-19, hygiene and cleanliness have become even more important which further drives demand for natural products.

But it’s not just about what goes into the products that matter. The FMCG industry is also focusing on the impact that its products have on overall health and wellbeing. Brands are spending more time and resources to educate consumers on the importance of healthy eating, exercise, and mental health. There’s a growing trend of brands creating content that not only promotes their products but encourages their customers to adopt healthier lifestyles. The industry has also started fostering relationships with fitness experts, health bloggers, and nutritionists who can provide expert advice and create social media buzz.

Another trend that has emerged is the growing popularity of home wellness products. With many consumers stuck at home during the pandemic, more people are investing in products like air purifiers, water filtration systems, and indoor plants. Companies have been quick to respond to this trend. We now see many brands entering the home wellness space and creating innovative products that promote relaxation, mindfulness, and healthy living.

Top 5 FMCG Companies in India:

Hindustan Unilever Limited (HUL):

Hindustan Unilever Limited is the largest FMCG company in India, with a market capitalization of over INR 4.50 trillion and a revenue of INR 35,410 crores. It has a large presence in India with products like Lux, Dove, Surf Excel, Lipton, and Pepsodent. Moreover, it has a worldwide presence in more than 190 countries.

ITC Limited:

ITC Limited, headquartered in Kolkata, is an Indian conglomerate company. With a diversified presence in various industries like FMCG and hotels, ITC has successfully built a vibrant portfolio of more than 25 world-class Indian brands that add value to the Indian market. ITC's renowned FMCG brands, including Aashirvaad, Sunfeast, Yippee!, Bingo!, B Natural, ITC Master Chef, Fabelle, Sunbean, Fiama, Engage, Vivel, Savlon, Classmate, Paperkraft, Mangaldeep, Aim, and others, have gained significant consumer loyalty in a relatively short period. While some of these brands lead their respective segments, others are making remarkable progress. The company has a market capitalization of INR 2.68 trillion and a revenue of INR 55,622 crores. It also operates in various sectors like paper, hotels, and agri-business.

Nestle India Limited:

Nestle India Limited is a subsidiary of the Nestle Group and manufactures products like Maggi, KitKat, Nescafe, and Cerelac. It has a market capitalization of INR 1.72 trillion and a revenue of INR 13,323 crores. Nestle India has operated in India for over 100 years. The company's products include food, beverages, chocolate, and confectioneries. Theare are nine production facilities owned by the company in various locations across India. The company ventured into the confectionery industry in 1990, with the introduction of Nestlé premium chocolate.

Varun Beverages Limited (VBL):

VBL is a subsidiary of RJ Corp and is one of the largest franchisees of PepsiCo in the world. The company produces a range of beverages such as Pepsi, 7-Up, and Mirinda. VBL has a strong presence in India and has been expanding rapidly in other countries.

Britannia Industries Limited:

Britannia Industries Limited is one of the largest biscuit manufacturers in India. It was established in 1892 and has a market capitalization of INR 96,697 crores and a revenue of INR 12,316 crores. The company is known for products like Good Day, Tiger, and Bourbon.

Conclusion:

The FMCG industry is continuously changing, and businesses can stay ahead of the curve by keeping up with these emerging trends. As consumers become more health-conscious and environmentally aware, the demand for sustainable and ethical products continues to rise. From plant-based alternatives to personalized nutrition, these trends are shaping the way FMCG companies operate and innovate. It is clear that consumers are no longer satisfied with just convenience and affordability, they want products that align with their values and lifestyle choices. As e-commerce continues to dominate the retail landscape, companies must also adapt to the changing consumer behavior by investing in online platforms and developing digital marketing strategies.

Furthermore, with the rise of social media, brands need to focus on building a strong online presence and engaging with their customers through various platforms.

In conclusion, the FMCG industry is experiencing a paradigm shift that requires companies to be more mindful of consumer demands, sustainable practices, and digital advancements. By keeping up with these trends, FMCG companies can stay relevant and thrive in an ever-changing market. As consumers continue to prioritize health, sustainability, and convenience, it is crucial for FMCG companies to embrace these trends and innovate accordingly. The future of the industry lies in understanding and catering to the evolving needs of consumers.

The top ten trends outlined in this blog post are expected to play a crucial role in shaping the FMCG industry in 2024 and beyond. FMCG companies need to keep an eye on these trends to capitalize on emerging opportunities, increase efficiency, and ultimately drive growth.