As 2017 starts to wind down, savvy organisations are already deep into planning and acting on their objectives for 2018. The Fast Moving Consumer Goods (FMCG) industry is a sector that has experienced a mass disruption in recent years, mainly thanks to the explosion of e-commerce, changing consumer spending patterns and demand trends evolving as rapidly as the consumers themselves.
Below are some key emerging trends we think are likely to take hold in South Africa, and how we think the FMCG supply chain can enable organisations to gain a competitive advantage by capitalising on these trends:
1) Global taste buds
As the world becomes smaller and smaller thanks to the ever-connected world we live in, consumers are beginning to demand international ingredients and ethnic flavours from all four corners of the globe. Trendy food such as quinoa, traditionally a South American grain, is now commonplace on local supermarket shelves. Retailers and distributors will need a flexible Freight Forwarding solution to keep up with this global appetite to be able to import exotic flavours from various locations in the quantities and at the service levels required to meet local demand.
2) The “Experience” at home
Known as the ”away from home” trend, this sees consumers wanting the ability to create the restaurant, spa or cinema experience from the comfort of their own homes. A good example is the global growth in popcorn sales, as consumers recreate the cinematic experience from their couches in front of Netflix. The rise in demand for coffee pods can similarly be equated to the increase in customers creating the coffee shop experience every morning before work.
The challenge for the FMCG industry is to identify the key add-ons that augment a product into an experience, and retail these items together with their core product. Warehousing and distribution centres will have to be able to scale-up in-line with demand, as well as accommodate alternate SKU’s to traditional items. Likewise, the last-mile delivery services will need to be able to deliver more rapidly as on-demand requirements escalate – a consumer does not want their popcorn in 3-5 working days, they want it before the end of the episode.
3) “Clean” products
Ingredients that can be traced from source, are ethically farmed and minimally processed are leading the FMCG trends across the world. From clean eating to ethical cosmetics the ability to provide consumers insight into farming techniques and the handling process throughout the Supply Chain will provide a compelling product story in years to come. Smart technologies such as RFID tags and digital transport records will provide retailers with the ability to give this information to consumers in the way they need it
4) Plant-based foods
Continuing the clean eating trend is a rise in demand for foods and beverages that are 100% natural. This trend opens up the market for smaller, artisanal suppliers to gain market share, and these type of vendors require flexible warehousing and reliable distribution to satisfy demand.
5) Urban living
Busy lifestyles, particularly within sprawling cities need stress-free, on-the-go options. Meals and snacking products that are ready-to-eat, while remaining healthy and fuss-free, together with on-demand food purchases require innovative Supply Chains. The regulations governing the transportation of ready-to-eat meals are different to those of raw materials, and as such traditional models will need to adapt. Services like uber-eats are educating consumers to expect on-demand food deliveries and 24 hours convenience stores are making products available whenever a customer wishes to make a purchase. This challenges the traditional food Supply Chains as the demand not only shifts to in-the-hand delivery but as convenience sector deliveries require smaller basket deliveries more often.
5) Food supply chains
Food supply chains will continue to experience disruption as consumer patterns continue to evolve, but factors such as product integrity and rapid service levels will remain paramount regardless of the face that demand takes. Smart supply chain solutions will enable FMCG trends by successfully moving the different temperature regimes, delivery service levels and basket sizes, while proactively monitoring the journey of a product at every step to provide appropriate reporting and insights.
Reference: 10 FMCG Trends for 2018