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February 28, 2022

The themes that will fill the consumer’s headspace in 2022 – focus

What are the main areas of concern for consumers in 2022?

By Richard Woodard

Health & wellness, digitalisation and the need for easy, affordable products are among the themes set to dominate consumer goods throughout 2022, according to a new GlobalData research report.

The paper, ‘Top Themes in Consumer Goods 2022’, identifies five major areas that companies should focus on this year. They include:

• Health & wellness
• The future of work
• Digitalisation
• Easy and affordable, and
• Environmental, social & governance (ESG)

Noting the enhanced consumer concern about health & wellness issues as a result of the COVID-19 pandemic, the report says that this issue now covers a broader range of areas, including both mental and physical well-being. “There is a move away from consumer attitudes on avoidance and moderation towards positive claims,” according to the research. Rather than emphasising that products are ‘free from artificial ingredients’ or contain ‘no added sugar’ or are ‘low in fat’, there is an opportunity to look at more positive claims that increase, rather than decrease, consumption.

”While consumers increasingly desire products with perceived health benefits, they may also want to treat themselves – a key factor during the stress and anxiety caused by pandemic lockdowns, GlobalData says.

FMCG companies that want to take a targeted approach to particular demographics could look to tap into the “explosion” of data generated by fitness devices and wearable tech. “The immediate opportunities will be in more functional products: for example, sports drinks before a gym session or relaxation products after reduced sleep activity.”

COVID has also transformed attitudes to the workplace, with the future of work another crucial trend to follow in future. The report envisages a long-term shift to increased home-working, following a hybrid approach that combines this with periodic get-togethers and meetings in the office. It also notes: “This more flexible model of future working will see a shift from the traditional Monday-to-Friday and 9am-to-5pm routines. As such, there will be more variety in consumption occasions, both existing and emerging, as consumers cement new routines that work for them, as well as their employers.”

The pandemic has also disrupted shopping patterns, with many people reverting to a weekly ‘big shop’, rather regular top-up retail visits. As a result, items previously purchased on impulse or when needed will be incorporated into the main grocery shop, or sourced via online delivery or digital aggregators.

Digitalisation is transforming the way that consumers source products, but it is also having a major impact on the supply chain. Companies’ increased use of AI should help them to manage inventories more nimbly and efficiently, while the increasingly influential ‘Quick-commerce’ – or Q-commerce – channel offers consumers on-demand delivery of small baskets of items with a swift turnaround.

“Recent widespread disruption to international shipping, as well as the availability of delivery drivers and of factory workers, has caused volatility in many supply chains over the last year, and highlighted how the ‘just-in-time’ model employed by many global companies has made them very exposed to even the slightest disruption,” says the report.

The economic consequences of COVID, coupled with the impact of rising energy prices and inflation, is having a clear impact on disposable incomes, leading consumers to make adjustments to their spending now and in the years to come. As such, suggests GlobalData, brand owners will need to think about how they can justify product value and pricing in the future, paying much closer attention to the need for products to be easy and affordable.

Nonetheless, there are still opportunities here, in creating at-home “inspiriences” for consumers who may be reluctant to incur the extra expense of eating or drinking out (and who may have lost the habit as a result of lockdowns).

The report says: “There is also a growing trend of alcoholic beverage experiences, where a variety of tasting samples are delivered for whisky/whiskey, or ingredients for cocktails; and consumers join an online demonstration of how to enjoy the flavours, or how to mix the cocktails.”

However, GlobalData also points out that, just as consumers are likely to be looking for value for money, brand owners are facing rising production costs thanks to spiralling prices for energy and raw materials. “Organisations across the supply chain will need to work together in order to find cost-effective solutions that do not compromise value for consumers,” it says.

The last area outlined in the report is ESG, which has emerged as increasingly vital to company performance and perception in recent years. The report notes: “Some brands have carved out a USP by focusing on their ESG credentials to appeal to environmentally- and socially-aware consumers … Consumers across generational and regional divides are making far more considered choices when purchasing goods, taking into account the impact those products have.”

Reusable packaging is an increasingly important area, as it scales up from small, independent retailers to larger-scale operations involving major brands with partners such as Loop. Major challenges remain for large corporations and high-volume categories, but the report believes that more brands will look for a suitable logistics partner to help them to get ahead of the curve.

On the social side, the notion of holistic health and safety now pervades the entire supply chain, expanding into the mental – as well as physical – health of employees, GlobalData says. “Companies will therefore need to pursue a more holistic approach to employee health and safety to ensure employees and consumers perceive them as socially responsible.”

Meanwhile, on governance, there is an increasingly widespread perception that companies require an inclusive, diverse and representative corporate structure, allowing an adequate voice for shareholders and avoiding unjustified remuneration for senior executives.

“Corporations are also facing pressure to have actionable ESG targets with timelines for transparent reporting,” the report says, adding a stark warning: “Any company without a sustainability plan will not survive over the next 20 years.”

For more details on GlobalData’s ‘Top Themes in Consumer Goods 2022 – Thematic Research’, click here.

The themes set to shape 2022 for alcohol brand owners – Click here for a Just Drinks focus

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