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Format and Consumer Shift Underscores FMCG Stagnation: Report
Brands need strategy for fast-growing channels, slow-growing market, a new Kantar report says. Brands need strategy for fast-growing channels, slow-growing market, a new Kantar report says.
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Photo courtesy of Pixabay, chart courtesy of Kantar Worldpanel
While e-commerce in the U.S. remains small relative to other world markets, its 27% growth rate in 2017 was the fastest in the world outside Asia, according to a new report from Kantar Worldpanel.
That trajectory, however, contrasts with a stagnating overall growth for consumer goods worldwide, the report noted, with consumer goods now growing slower than gross domestic economies worldwide—a phenomenon which Kantar ascribes to slowing population growth, a “trading down” mentality, growth in private brands and fewer shopping trips.
What growth brands are having is coming largely within fast-growing channels such as e-commerce, warehouses and discount channels, which are increasingly taking share from traditional supermarkets and hypermarkets worldwide, the report noted. As a result, brands need to develop strategies to adapt to those channels.
“Over the next three years, there will be a major slowdown in hyper- and supermarket spend, falling to 48.4% in 2020,” the report noted. “This should be no huge surprise. Having made up 50.8% of global value share as recently as 2015, the channel has tumbled over the course of consecutive years—reaching 49.2% in 2017.”
By 2020, Kantar predicts that worldwide:
• Cash-and-carry will grow to 2.1%.
• Convenience will grow to 5.8%.
• Discounters will grow to 6%.
• E-commerce will grow to 7.2%.
More details from the report can be found here.
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