With pandemic restrictions lifting and stores reopening, there’s cautious optimism that we’ll return to something resembling “normal” in 2023. That said, it would seem that certain changes are here to stay, from continued eCommerce demand to a thriving remote work culture.
The same goes for CPG brands. Companies worked hard to respond to the changing conditions provoked by the pandemic. But it’s clear that demographic shifts, supply chain disruptions, and other factors will remain relevant into 2023 and beyond.
With all this in mind, let’s reflect on some current trends and consider how these might affect the CPG industry in 2023. 
Emerging CPG Trends We Saw in 2022
There’s no doubt that the COVID-19 pandemic turned a lot of industries on their heads. But as restrictions began to ease, 2022 brought several key trends into the frame:
A Return to Physical Stores
As distancing and mask requirements phase out, consumers have been resuming in-store shopping. Forecasters estimate that 72% of US retail sales will still take place in brick-and-mortar stores in 2024. This continued preference reflects consumers’ desire to test products in person.
That said, 83% of consumers plan to shop online at least as much as they did during the peak of the pandemic. And digital CPG sales now account for around 10% of the US CPG market — up from about 4 percent in 2019. The full picture, then, is one of consumers taking advantage of the omnichannel options available to them.
Direct-to-Customer Sales
At the height of the pandemic, many CPG brands set up new and very successful direct-to-consumer (DTC) sales channels. DTC sales now account for 40% of CPG industry growth. Even huge brands such as Nike, Nestle, and Unilever have embraced DTC sales alongside their regular channels.
A big concern, though, is that systems designed for B2B sales are often less than suitable for DTC business. This means that brands will need to consider their next steps with care if they want continued success in the DTC marketplace.
Modern Supply Chain Solutions
Lockdowns, natural disasters, and other unexpected issues have caused distribution disruptions since 2020. After suffering the resulting ill effects, many brands have had to reconsider their supply chain strategy.
Some brands have even moved manufacturing operations closer to home. But one of the most effective ways to increase supply chain resilience is to collate all relevant data in one easy-access location.
Prioritizing Health and Wellness
COVID-19 outbreaks and social isolating brought mental and physical health to the foreground. As a result, consumers are now keener than ever to put their health and well-being first.
This has prompted companies making all kinds of CPGs to find new ways to incorporate health messages into their branding. Many rely on buzzwords such as “clean”, “natural”, and “wellness” to varying degrees of success. Although, brands with more subtle wellness messages woven into their story, such as Violette_FR, are those that resonate the most with consumers. 
CPG Industry Changes We Expect to See in 2023
It doesn’t feel presumptuous to say that 2023 promises a new start for many consumers and brands. Here are some ways that the CPG industry will likely reflect this in the coming year:
A Return to Sustainability
The pandemic and ensuing global emergencies forced sustainability to take a backseat. But as 85 percent of consumers shift to more sustainable purchasing, 2023 will likely see a push for brands to focus on goals such as becoming carbon neutral or carbon negative. More sustainability awareness also means that consumers can now see through the vague empty promises and other greenwashing tactics used by many companies.
In particular, there’s a big push for companies to adopt sustainable packaging and reduce wastage. With the lack of plastic recycling resources in the US and beyond, it’s no longer good enough for packaging to be recyclable in theory. Instead, consumers are calling for less reliance on plastic, as well as reusable packaging, biodegradable packaging, and refilling programs.
A New Generation of Loyalty Programs
With new research showing that Gen Z may be the most loyal generation of all when it comes to loyalty programs, brands must rethink how to attract these potential customers.
One possible way to incentivize younger consumers is to offer rewards for interactions as well as money spent. This might mean points or discounts for everything from referring a friend to filling out surveys. Brands should also consider alternative rewards and perks such as free or faster delivery, free products, or early access to new products.
Economic Empathy
With the upcoming recession looking set to begin in late 2023 or early 2024, brands will need to show empathy toward customers and their likely unstable financial situations. Marketing CPGs will be tough during this economic downturn and period of high inflation. Especially for brands producing luxury items, with 55 percent of consumers saying that they’ll be cutting down on these for the foreseeable future.
But brands hoping for continued success will need to put their own concerns aside to strike the right note with consumers facing tough financial decisions. Empathetic help and guidance will promote strong customer relations and future loyalty. And making sure to put the best deals centerstage on eCommerce platforms will take the load off customers searching for ways to save money.
How Can Brands Stay Ahead of These Trends?
The next 12 months look set to bring all kinds of changes to the CPG industry. Here are some ways that brands can stay ahead of these emerging trends:
User Research
Quality user research is vital for staying ahead of the game, especially when key trends seem to be pulling CPG brands in various directions. Knowing who your customers are and where their priorities lie will make it easier to fulfill their needs and secure their loyalty.
If, for example, focus groups, online surveys, and buying trends show that your customers are more concerned about sustainability than affordability, brand practices will need to reflect this. 
Competitor Research
Staying ahead of the competition during these challenging times means knowing what plans rival CPG companies have in the pipeline. And if possible, long before they act on them.
This research will have to go well beyond pricing strategies and new product launches too. With omnichannel options available to customers, as well as new generational demands to consider, it’s all too easy to get left behind by the competition if you don’t continue to keep track of the market from all angles.
Smart Distribution
CPG brands will be under pressure to deliver while managing DTC channels, online sales, and keeping physical stores stocked up. All this calls for the integrated services of a smart distribution partner with a tech-forward approach to supply chain solutions.
Thanks to proprietary software that uses machine learning, Buffalo Market will collect and analyze your CPG brand’s sales data, ensuring that you have the upper hand when it comes to predicting consumer behavior.
Understanding the CPG Industry in 2023
Trying to meet increasing customer demands, become more sustainable, and show empathy for consumer economic instability will leave CPG brands facing a tough balancing act in 2023.
This is why it’s even more important to work with an industry expert in CPG distribution and modern supply chain solutions like Buffalo Market.
To learn more about how Buffalo Market is leading the CPG industry into 2023 and beyond, reach out to one of our food and beverage distribution experts today.
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