Consumer Packaged Goods Industry Challenges—and How to Tackle Them

The consumer goods industry is an exciting yet constantly shifting landscape. In 2024, CPG companies have been up against a new set of challenges, but don’t worry—we’re here to break them down.

From tackling inflation and supply chain obstacles to dealing with ever-evolving consumer preferences, we’ve got the insights and strategies you need to stay competitive and come out on top.

Let’s dive into the biggest consumer goods industry challenges and how you can tackle them head-on!

Global inflation and the cost of living crisis

In 2024, consumers have been feeling the pinch as global inflation continues to raise prices across the board. Wages haven’t kept pace with these rising costs, meaning people are pulling back on big purchases and prioritizing essentials.

For CPG brands, this creates a tough environment—especially when the cost of raw materials, production, and shipping keeps climbing.

Consumers are becoming more price-conscious, making it harder for brands to maintain sales without sacrificing quality or profits.

How to handle it: Many CPG companies are getting creative by introducing smaller, budget-friendly product sizes and lines. They're also looking to manage costs by renegotiating supplier contracts, improving operational efficiencies, and automating certain processes.

Building a strong, efficient supply chain can be a game-changer here, allowing you to cut costs without compromising on quality.

However, it’s a balancing act. As brand loyalty weakens, consumers are quick to jump to private labels or discount brands if your prices seem too high. That’s why it’s critical to find ways to offer value, even in tough economic times.

Changing consumer preferences

It’s no secret that consumer preferences are constantly evolving, and CPG companies need to keep up. Today’s consumers are more informed and more selective than ever.

They’re not only looking for products that meet their needs—they’re also interested in sustainability, ethical sourcing, and transparency. In 2024, CPG brands that don’t keep up with these changes are finding it tough to stay in the game.

What to do: To stay ahead of the curve, CPG marketers need to be in tune with consumer trends and be ready to pivot quickly.

Gathering feedback from your customers is key to understanding what they want and ensuring your products align with their values.

Innovation is also really important here—creating new, unique products that cater to these changing preferences is how you’ll stay competitive.

For example, more consumers are looking for eco-friendly packaging and sustainably sourced ingredients, so adapting your products to meet these needs can help boost loyalty and differentiate your brand from competitors.

If you’re slow to respond, your brand could risk falling behind as consumers look elsewhere.

Omnichannel complexity

In today’s digital-first world, CPG brands are facing growing complexity when it comes to managing both physical and digital sales channels.

The rise of online marketplaces has made it more difficult to maintain consistency across platforms, especially when you’re trying to personalize the customer experience across multiple touchpoints.

Managing customer data, product information, and pricing across various channels can be a headache, especially without the right tools.

Solution: The key to mastering omnichannel marketing is investing in advanced digital technologies that help you streamline processes and maintain consistency. Whether customers are shopping on your website, in stores, or on social media, the experience should feel seamless.

That means making sure product info, pricing, and promotions are consistent across all platforms and using up-to-date tools to manage customer data and personalize experiences in real-time.

Achieving true personalization requires deep insights into consumer behavior—understanding what your customers want, when they want it, and how they prefer to shop.

This level of detail allows CPG companies to create tailored experiences that resonate across channels, helping you stand out and engage customers effectively.

CPG supply chain challenges

If there’s one thing we’ve learned over the past few years, it’s that supply chains can be unpredictable.

From the COVID-19 pandemic to natural disasters and geopolitical conflicts, disruptions can come out of nowhere and throw your operations into disarray. For CPG brands, these supply chain challenges are particularly tough, as they can lead to delayed shipments, increased costs, and shortages of essential materials.

How to stay ahead: Building a resilient supply chain is critical to minimizing disruptions and ensuring your business can continue to operate smoothly when challenges arise.

Rather than relying on a single supplier, diversify your supplier base to give yourself more flexibility. That way, if one supplier experiences delays, you have backups to keep things running.

Strengthening your relationships with suppliers is also key. Open communication, transparency, and collaboration will help you stay informed about potential issues and find solutions before they impact your business.

CPG companies that are proactive about optimizing their supply chains will be better positioned to navigate future challenges and meet customer demands.

Adapting to regulations

Government regulations are becoming stricter across the board, and for CPG companies, staying compliant can feel like an uphill battle.

Whether it’s new labeling requirements, sustainability mandates, or safety standards, navigating these regulations can be complex, especially when they’re constantly changing.

Tip: The best way to stay compliant is to have a system in place to track and manage all the relevant regulations for your products and markets.

Staying organized and informed can help you avoid fines, recalls, and damage to your brand’s reputation. Keep an eye on any new rules that could impact your business and make adjustments as needed to ensure you’re always up to code.

How to overcome consumer goods industry challenges

So, now that we’ve covered the main consumer goods industry challenges, let’s talk about how you can turn these obstacles into opportunities and thrive in today’s market.

1. Embrace direct-to-consumer channels: More CPG brands are jumping into the DTC game, selling directly to customers through their own ecommerce platforms rather than relying on third-party retailers. This allows you to control your branding, pricing, and customer experience—ultimately leading to higher profit margins. Plus, you get valuable first-hand insights into your customers, helping you make more informed decisions.
2. Use data and technology to your advantage: Using data-driven insights is crucial for staying ahead in today’s competitive landscape. By analyzing customer behavior and feedback, you can fine-tune your pricing strategies, develop better products, and create marketing campaigns that resonate with your target audience. Additionally, investing in automation and AI can help you streamline operations, reduce costs, and optimize your supply chain for improved efficiency.
3. Go green: Sustainability isn’t just a buzzword—it’s a priority for today’s consumers. CPG companies that adopt sustainable practices, whether through eco-friendly packaging or ethically sourced materials, will stand out to customers who care about the planet. Plus, aligning your brand with these values can give you a competitive edge and build stronger brand loyalty.
4. Stay flexible: Agility is key to surviving in the ever-changing CPG sector. Whether it’s adjusting your products to meet consumer preferences, fine-tuning your marketing strategies, or adapting to new regulations, being flexible and responsive will set you apart from competitors. CPG marketers who can pivot quickly will be better positioned to seize opportunities and achieve long-term success.

Wrapping it up

The CPG industry is full of challenges, but with the right strategies, CPG brands can overcome them and thrive. By staying ahead of consumer trends, optimizing your supply chain, and leveraging technology and data-driven insights, you can keep your brand competitive in an ever-changing market. Stay agile, stay informed, and focus on delivering value to your customers—that’s how you’ll succeed in 2024 and beyond.

Remember, every challenge is an opportunity to grow and innovate. With the right mindset and approach, you and your CPG company can tackle these hurdles and come out stronger than ever!