Canadeanhttp://www.canadean.com2016-07-13T14:41:34umbracoLatest information from Canadean.enMany Millennials Shun Practice of Eating Three Regular Meals a Day, with Over 40% Snacking Regularly, says Canadeanhttp://www.canadean.com/news/many-millennials-shun-practice-of-eating-three-regular-meals-a-day,-with-over-40-snacking-regularly,-says-canadean/Wed, 13 Jul 2016 00:00:00 GMThttp://www.canadean.com/news/many-millennials-shun-practice-of-eating-three-regular-meals-a-day,-with-over-40-snacking-regularly,-says-canadean/Over a third of consumers globally say they snack regularly, with the figure rising to just over 40% for young people aged 18-34, as the practice of modular eating becomes more accepted as an alternative to eating three main meals a day, according to consumer insight firm Canadean.

Regular Snackers 

The company’s latest report finds that consumers snack for a variety of reasons such as the functional need for an energy or nutritional boost, the psychological need to de-stress or indulge, and needs dictated by occasion, such as watching a movie, attending a sporting event, or socializing with friends.

 

I Stock _96462759_LARGE

As more consumers turn to snacks to fulfill a wide range of needs and occasions every day, the potential opportunities for snacking brands are enormous right across the health-indulgence and sweet-savory spectrums.

Katrina Diamonon, Principal Consumer Insight at Canadean, explains: “While it is important for brands to acknowledge and address the snacking needs of all consumers, it is particularly crucial to understand the motivations of younger consumers. Not only are they more frequent snackers, but their purchase behaviors and preferences will strongly influence other current consumers and also subsequent generations as they pass on these traits to their children.” 

Canadean finds that a range of rational and emotional needs beside hunger can be addressed through snacking, and these reasons differ according to age. As millennials tend to prioritize meat in their diets more highly than their older counterparts due to its perceived health benefits, manufacturers should capitalize on the meat snack segment and explore new opportunities.

Diamonon continues: “Manufacturers are increasingly experimenting with a range of proteins, formats, and gourmet flavors to elevate consumption from convenience-store snacks to an exciting taste experience and even credible meal replacement. Improved sourcing transparency and ethical production of such offerings is also enhancing premium credentials.”

Editor’s notes

Information based on Canadean’s report: Top Trends in Snacks, Confectionery, and Desserts; Exploring consumer and innovation trends in key categories.

For more information

Please get in contact if you have any questions to this or other Canadean reports. Analysts are available to comment. Contact the Canadean press office on +44 (0) 161 359 5822 or email press@canadean.com

]]>
Consumers Consider Memory Loss and Sight Degeneration Bigger Health Worries than Diabetes and Cholesterol, says Canadeanhttp://www.canadean.com/news/consumers-consider-memory-loss-and-sight-degeneration-bigger-health-worries-than-diabetes-and-cholesterol,-says-canadean/Tue, 12 Jul 2016 00:00:00 GMThttp://www.canadean.com/news/consumers-consider-memory-loss-and-sight-degeneration-bigger-health-worries-than-diabetes-and-cholesterol,-says-canadean/Memory loss and eye health are two of the most pressing future health concerns among today’s consumers, presenting a major opportunity for players in the nutrition and over-the-counter health space, according to consumer insight firm Canadean.

Canadean’s latest report finds that almost a third of consumers (32%) globally are concerned about experiencing memory loss in the future, and 27% are concerned about sight degeneration, putting such concerns above diabetes and cholesterol in terms of consumer worry. In this way, there is a clear opportunity for manufacturers to respond by incorporating cognitive and eye health benefits into food, drinks and supplements.

Top 5Health Concerns 

Melanie Felgate, Senior Consumer Insight Analyst at Canadean, comments: “As well as addressing current health needs, consumers are increasingly looking to the future, proactively seeking products that will reduce their risk of potential health problems. With memory loss and eye health the top concerns, manufacturers in the functional nutrition and healthcare spaces should focus on these key areas of innovation. For example, cholesterol-lowering spreads are commonplace, but what about everyday products which improve cognitive function? Coffee Blenders Think Cup in the US is an example of a brand already doing this, producing coffee pods with ginseng which, the brand claims, is clinically proven to improve memory.”

I Stock _85868287_LARGE
 

In terms of the administration of health-enhancing ingredients, consumers prefer food and drink over pills. Only 14% of consumers globally consider traditional pills and tablets to be the preferable consumption format, with the majority opting for food and drink formats. Furthermore, just 18% consider pills and tablets to be the most effective consumption format, compared to 49% and 24% for food and drink respectively. 

Felgate continues: “This preference for, and perceived effectiveness of, food and drinks in comparison to pills, stems from boredom with traditional formats as well as the belief that food and drink can offer comparable health benefits to non-prescription medicines.”

Manufacturers might also benefit from personalizing health products. Globally, 41% of consumers have a favorable perception of products personalized to their needs. This sentiment increases among the most health conscious consumer groups, such as frequent exercisers (44%) and those who claim to actively use food and drink to improve their health (49%), highlighting the necessity for brands in the health space to take a more personal approach.

Felgate explains: “The need for innovation ever-more closely aligned to individual consumer requirements is growing, as the personalized health trend persists. Brands could personalize products by appealing to consumers’ specific age and gender, lifestyle preferences, or even blood type or DNA. We are already seeing brands like ManFlu – a range of cold and flu remedies for men - capitalize on this space, but in the future personalization will become increasingly more closely tailored to an individual’s own needs.”

Editor’s notes

Information based on Canadean’s report: Top Trends in Healthcare and OTC; Exploring the over-the-counter medication; vitamins, minerals and supplements; functional food and drink; and sports nutrition categories.

All information correct at time of publication and based on Canadean's research methodology.

For more information

Please get in contact if you have any questions to this or other Canadean reports. Analysts are available to comment. Contact the Canadean press office on +44 (0) 161 359 5822 or email press@canadean.com

]]>
Baby Beauty Products Require Sensitive Approaches to Appeal to Parents, says Canadeanhttp://www.canadean.com/news/baby-beauty-products-require-sensitive-approaches-to-appeal-to-parents,-says-canadean/Wed, 06 Jul 2016 00:00:00 GMThttp://www.canadean.com/news/baby-beauty-products-require-sensitive-approaches-to-appeal-to-parents,-says-canadean/While adults have long been expected to maintain certain grooming standards, particularly as social media and the selfie culture continues to reign, the emerging “baby beauty” trend, targeting parents of those aged four years and under, is a recent phenomenon in the industry, according to consumer insight firm Canadean.

The company’s research demonstrates how regionally, parents in South and Central America are the most likely to be concerned about their babies’ appearance, with 9 in 10 parents in the area stating that their child’s looks are important. The least child image conscious consumers are in North America, where 7 in 10 parents have the same attitude. Interestingly, when it comes to country analysis, Russians took the first place, with 98% of parents having the same attitude, whereas New Zealanders came out as the least image conscious, with 53%.

Personal care brands need to position baby beauty products as fun, rather than image-enhancing

Veronika Zhupanova, analyst at Canadean explains: “The fact that even in the least child-image conscious country over half of parents with babies are concerned about their children’s looks shows how important this consciousness around baby aesthetics has become.”

That said, brands need to navigate carefully so as to avoid entering the terrain of unethical product positioning whilst still aligning neatly with consumer motivations.

Zhupanova notes: “An optimum strategy here would be for manufacturers to promote a holistic approach to a child’s image, placing the primary emphasis on babies’ health, wellbeing and happiness. Doing so will help parents avoid feeling overly pressured about their children’s image, as well as to prevent children from being obsessed with their looks from an early age.”

To further avoid being seen as encouraging image-consciousness among the youngest generation, brands need to focus on the emotive side of the product, such as how it facilitates bonding between parents and children, as opposed to actually enhancing a child’s looks.

“Launches such as child-safe nail polish, for example, should be marketed as facilitating mother-daughter bonding, encouraging a healthier approach to a child’s perception of their own image,” adds Zhupanova.

 

Nail Polish

Organic edible nail polish - such as this one from Kid Licks - can be positioned as a fun accompaniment to parent-child time, promoting a healthy attitude to baby beauty products.

 

Editor’s notes

Information based on Canadean’s report: Top Trends in Baby Care; Exploring the baby food, drinks, toiletries, and diapers categories.

All information correct at time of publication and based on Canadean's research methodology.

For more information

Please get in contact if you have any questions to this or other Canadean reports. Analysts are available to comment. Contact the Canadean press office on +44 (0) 161 359 5822 or email press@canadean.com

]]>
Developing Economies Set to Drive 4.6% Growth in Global Dairy and Soy Food Market by 2020, says Canadeanhttp://www.canadean.com/news/developing-economies-set-to-drive-46-growth-in-global-dairy-and-soy-food-market-by-2020,-says-canadean/Tue, 05 Jul 2016 00:00:00 GMThttp://www.canadean.com/news/developing-economies-set-to-drive-46-growth-in-global-dairy-and-soy-food-market-by-2020,-says-canadean/The global dairy and soy food market will rise from US$617.9 billion in 2015 to US$773.4 billion by 2020, representing a compound annual growth rate of 4.6%, according to consumer insight firm Canadean.

The company’s latest report states that this cautious growth will be driven primarily by emerging and developing markets in Asia-Pacific (APAC), Middle East and Africa (MEA) and East European regions, in contrast to West Europe and North America, whose economic fragility has resulted in risks of weaker market growth.

According to Kiran Akkineni, Analyst for Canadean: “Changing consumer preferences and purchase patterns due to socio-economic and demographic changes have created new market dynamics. While the key markets of Western Europe and North America have witnessed stagnancy in liquid milk consumption paired with fast growth in processed and soy products, developing countries have recorded steep growth in demand for dairy products owing to their fairly low per capita consumption.”

   Selection -of -dairy -products -on -rustic -wood -bacground -000086865107_Large

Consumption of milk in North America is currently declining as consumers opt for alternative beverages such as juices and vitamin-infused water. By contrast, the rise in per capita consumption of dairy by the growing middle-class population in developing markets in the APAC, MEA and Eastern Europe regions will drive growth in the dairy and soy foods market.

Canadean’s analysis reveals that consumers in developed markets tend to base their beverage choices on their level of personalization, whether they can be consumed on-the-go, and whether they can provide a novel experience. Consumers in emerging countries including Brazil, China and India, on the other hand, place a greater emphasis on nutritional value, following health and wellness trends.

Akkineni continues: “Despite these regional differences in beverage consumption, value-for-money remains an important differentiating factor globally, as consumers opt for products perceived to provide this. Consequently, there is considerable rise in demand for discount brands and private label products. The global dairy and soy food market is highly fragmented with the top 5 brands holding less than 6% market share. Mengniu, Activia, Amul, Kraft and Yili were the leading brands by market share in 2015.”

Notes

Information based on Canadean’s report: Global Dairy & Soy Food Report; Analysis of opportunities offered by high growth economies.

All information correct at time of publication and based on Canadean's research methodology.

For more information

Please get in contact if you have any questions to this or other Canadean reports. Analysts are available to comment. Contact the Canadean press office on +44 (0) 161 359 5822 or email press@canadean.com

]]>
UK Travel Industry Facing Years of Uncertainty in Wake of Brexit Vote, says Canadeanhttp://www.canadean.com/news/uk-travel-industry-facing-years-of-uncertainty-in-wake-of-brexit-vote,-says-canadean/Wed, 29 Jun 2016 00:00:00 GMThttp://www.canadean.com/news/uk-travel-industry-facing-years-of-uncertainty-in-wake-of-brexit-vote,-says-canadean/The consequences of the UK electorate’s decision to leave (or Brexit) the European Union (EU) following the country’s referendum on June 23 will be far-reaching for the entire EU travel market, according to consumer insight firm Canadean. This is largely due to Europe being the UK’s biggest tourist inbound market, with more than 60% of its visitors coming from inside EU member states.

According to the World Travel and Tourism Council (WTTC) there are over 4.3 million people employed by the UK tourism industry, with travel and tourism directly contributing 3.4% to the UK’s GDP for 2015. Considering tourism’s importance to the country’s economy and labour force, Brexit poses a particular threat to its travel and tourism market, as it is so intrinsically linked to the faith of the EU economy.

Nearly three-quarters of business visitors come from the continent and, according to the UK Department of Transport, EU countries contribute over 85% of the total passenger traffic to UK ports. In aviation, travel to EU destinations accounts for 64% of the UK passenger outbound flow. In this way, it is clear that the UK’s tourism industry is heavily invested in the faith of the EU project.

Gillian Kennedy, Ph.D., Analyst for Canadean, explains: “Consumer protections instigated by the EU, such as the European Health Insurance Card, could also be at risk. Indeed, the Association of British Travel Agents pointed out that UK consumers could risk losing financial protection for compensation for flight delays, alongside caps on mobile phone charges. Flight compensation is currently paid for long delays on departures from EU airports.

“Following Brexit, airlines may no longer be bound by this legislation. There is also the issue that Britain may be forced out of the Open Skies EU agreement, which keeps air fares relatively cheap. Again, there is no concrete decision to be made for this until Britain’s exit negotiations with the EU take place over the next two to three years.”

Finally, it is worth noting that EU citizens make up to 5.9% of the total UK workforce, and for tourism they are an integral part of the hospitality labour force due to the flexible work it offers. The UK tourism industry faces long-term concerns regarding visa access, airline costs and labour shortages, while an immediate concern is the strength of the pound versus other currencies.

However, Kennedy concludes: “Overwhelmingly, as with other industries in the UK, the travel sector faces uncertainty as we await the UK government’s exit negotiations with the European Union over the coming years.”

Notes

Comments provided by Gillian Kennedy, Ph.D., Analyst for Canadean.

For more information

Please get in contact if you have any questions to this or other Canadean reports. Analysts are available to comment. Contact the Canadean press office on +44 (0) 161 359 5822 or email press@canadean.com

 

]]>
Despite a Disappointing First Quarter for Europe’s Commercial Beverage Market, Confidence in the Sector is Rising, says Canadeanhttp://www.canadean.com/news/despite-a-disappointing-first-quarter-for-europe’s-commercial-beverage-market,-confidence-in-the-sector-is-rising,-says-canadean/Tue, 28 Jun 2016 00:00:00 GMThttp://www.canadean.com/news/despite-a-disappointing-first-quarter-for-europe’s-commercial-beverage-market,-confidence-in-the-sector-is-rising,-says-canadean/Although an early Easter was anticipated to boost European beverage sales in the first quarter of 2016, the general downward trend currently being observed in commercial beverage consumption was actually curtailed by the warmer-than-average weather which swept across the region over the period, according to leading market research firm Canadean.

According to the company’s latest Quarterly Beverage Tracker, both West and East Europe recorded flat performances versus the corresponding quarter of 2015.

 QBTGraph1

Whilst not all of the economic news is positive, there are signs that some of the major European beverage markets are in more reassuring territory, with improving GDP growth projections, falling unemployment levels, and low interest rates raising consumer confidence and making for a more favorable spending environment. In East Europe, however, the ongoing economic and political upheaval in Russia and Ukraine has served to depress the regional average growth in beverage consumption, with Turkey’s muted performance also contributing as its economy and important tourism sector suffer from the latest violence.

Against this backdrop, the quarter saw increasingly aggressive pricing and promotional tactics, including sustained special offers and multi-pack promotions by the branded players in many markets. Antonella Reda, Product Development Manager at Canadean says: “This dampened opportunities for private label, but it was noticeable that brand loyalty was weakest in categories with a more commodity image such as packaged water and juice, or where the presence of discounters such as Lidl and Aldi is strong and they are offering branded products”.

Packaged water was the key driver of European soft drinks in quarter one, supported by the favorable weather and growing propensity for healthy hydration. Hot drinks were in danger of being depressed by the warmer temperatures, but the rising profile of hot coffee on the back of the coffee shop boom helped to sustain sales. Dairy drinks saw contrasting results across the two regions, with the decline in white milk in West Europe, despite very low farm gate prices, disguising gains in flavoured milk and drinking yogurt driven by increasing innovation. Reda explains: “Dairy producers are looking to compensate for falling white milk consumption by tapping into the trend to convenience and added value products”. In East Europe, the heaviest contraction was seen in other alcoholic drinks, attributable to the swingeing tax increases on spirits in Russia and the Ukraine.

Looking forwards, Canadean expects 2016 commercial beverage consumption in East and West Europe to remain on a par with 2015. Soft drinks and, in West Europe, beer, will be the main providers of incremental volume, buoyed by the European football championships and the Olympics. Promotional activities focused on these events by the major soft drinks and beer producers are already being witnessed, both in advertising and on packs.


Notes

Information based on Canadean’s reports: Quarterly Beverage Tracker East Europe Q1-16 and Quarterly Beverage Tracker West Europe Q1-16.

For more information

Please get in contact if you have any questions to this or other Canadean reports. Analysts are available to comment. Contact the Canadean press office on +44 (0) 161 359 5822 or email press@canadean.com

 

]]>
Brexit Will Mean More of the Same for UK Consumer Trends in Grocery, says Canadeanhttp://www.canadean.com/news/brexit-will-mean-more-of-the-same-for-uk-consumer-trends-in-grocery,-says-canadean/Fri, 24 Jun 2016 00:00:00 GMThttp://www.canadean.com/news/brexit-will-mean-more-of-the-same-for-uk-consumer-trends-in-grocery,-says-canadean/The UK’s decision to leave the European Union, also known as Brexit, will cultivate a ‘doubling down’ on current consumer trends in the near-term, according to Canadean.

Right now, financial market volatility means prospects for consumer packaged goods prices and market growth in the UK look, at best, uncertain. Where the value of the pound will level out and how this will affect the worth of the money in British consumers’ pockets is also unclear. Various assessments from the Bank of England, the Institute for Fiscal Studies and the International Monetary Fund place the long-term hit on total annual income at anywhere between £3,000 and £5,000 five years after the UK formally leaving the EU.

                                   I Stock _83933303_Brexit Flags

What we can be clearer on is that within the sliding scale between, at best, consumer uncertainty and, at worst, recessionary forces that Brexit will likely cultivate, in the near-term we should arrive at a place that looks pretty close to the post-recessionary environment UK consumers have already adapted to.

The upshot of the above outcome will, in the short-term at least, be a reinforcement of the consumer trends which have dominated over the past few years. Specifically, price consciousness and ‘smart shopping’ have been prevalent, but also these have been countered by occasionally trading up to small indulgencies and luxuries. We can expect consumers to ‘double down’ on these behaviours, in particular ‘smart shopping’ by using vouchers, loyalty schemes and price comparison tools to get the best deal. Clearly technology will play a key role in enabling this.

So where does this leave consumer packaged goods marketers seeking to adjust to the new post-Brexit marketing landscape? Canadean’s view is that those retailers, brands and products which are already effectively targeting these consumer trends are now best placed to deal with the fallout of Brexit. On the flipside, those who have failed to adjust effectively to prevailing consumer trends are likely to fall further behind.

For retail channels, discount retailers and price competition will be continue to be a key feature of UK retail going forward.  For brands, those effectively targeting the right consumption occasions - be they value of indulgence or otherwise orientated - should be well set. However, any product simply hoping to benefit from the recent, generally improving economic circumstances may find themselves out of line with consumer trends and economic headwinds as a result.

Brexit may be a big change, and the impact on companies will be far-reaching as the process progresses, but the keys to targeting consumers in the UK will remain fundamentally similar in the near-future, Canadean concludes.

Notes

For more information

Please get in contact if you have any questions to this or other Canadean reports. Analysts are available to comment. Contact the Canadean press office on +44 (0) 161 359 5822 or email press@canadean.com

]]>
Packaging Companies Set to Invest Heavily in R&D to 2021, but Data Analytics Risks Losing Out, says Canadeanhttp://www.canadean.com/news/packaging-companies-set-to-invest-heavily-in-rd-to-2021,-but-data-analytics-risks-losing-out,-says-canadean/Tue, 07 Jun 2016 00:00:00 GMThttp://www.canadean.com/news/packaging-companies-set-to-invest-heavily-in-rd-to-2021,-but-data-analytics-risks-losing-out,-says-canadean/Packaging companies will substantially increase investment in Research & Development (R&D) over the next five years, meaning an R&D arms race may emerge as companies seek to develop ever more unique and novel pack designs, according to consumer insight firm Canadean.

An industry survey by Canadean has found that industry executives worldwide expect R&D to benefit from the most investment between now and 2021, beating investment in manufacturing equipment and improvements in distribution and logistics. However, packaging companies risk under-investing in data analytics, a crucial tool for ensuring success in new product development.

Canadean’s latest research has found that 36% of packaging executives worldwide expect R&D to benefit from the most investment between 2016 and 2021, compared with 29% who expect manufacturing equipment to have the most investment. Investment in R&D will be particularly high in Asia-Pacific, where 42% of respondents identified it as the key investment area.

Ronan Stafford, Senior Analyst at Canadean, explains: “This demonstrates how crucial it is to offer truly unique, stand-out packaging. With consumer markets becoming increasingly crowded, it is vital that packaging companies are able to offer novel closures, advanced embossing and tooling, and visually striking, lightweight designs.

“Getting products to catch the eye of customers is notoriously difficult, and this is causing packaging companies to become ever more creative in their designs. This means R&D is becoming an increasingly competitive pursuit among packaging companies, and those merely offering standard, traditional designs risk being left behind.”

While R&D will continue apace, the packaging industry risks running behind on data analytics. Canadean’s research has found that by 2021, only 37% of packaging companies expect to have a Chief Analytics Officer, compared with 53% of consumer packaged goods companies.

Stafford concludes: “Tools like eye-tracking technology and cloud-based GPS and Radio Frequency Identification technologies have an important role to play in saving packaging companies money, from initial product design to final delivery at the client’s operations. Having a data champion in the C-suite makes it more likely that companies will benefit as far as possible from these tools. The industry, however, seems lukewarm about giving data this level of importance.”

Notes

Information based on Canadean’s report: Opportunities and Threats to the Packaging Industry in 2021: A Global Executives Survey

For more information

Please get in contact if you have any questions to this or other Canadean reports. Analysts are available to comment. Contact the Canadean press office on +44 (0) 161 359 5822 or email press@canadean.com

]]>
Gourmet Teas in Pouches Will Appeal to Busy Consumers Craving Quality Hot Drinks, says Canadeanhttp://www.canadean.com/news/gourmet-teas-in-pouches-will-appeal-to-busy-consumers-craving-quality-hot-drinks,-says-canadean/Wed, 01 Jun 2016 00:00:00 GMThttp://www.canadean.com/news/gourmet-teas-in-pouches-will-appeal-to-busy-consumers-craving-quality-hot-drinks,-says-canadean/Hot drinks such as tea and coffee are a staple of busy consumers’ lives. However, an apparent lack of time means consumers often turn to “quick” options such as microwaveable products, which are often perceived to compromise on taste. To target those looking for a higher quality on-the-go beverage, brands have started devising novel packaging solutions in order to break the stereotype of convenience-quality trade-off.

14.5% of the total volume of Hot Drinks consumed worldwide are selected because they’re the most convenient product, according to consumer insight firm Canadean.

The company’s report, which features research into convenience hot drinks, finds that the increasing demand for time-saving versions of these products presents an exciting opportunity to benefit from the enduring lack of time consumers face.

Veronika Zhupanova, Analyst for Canadean, says: “A number of on-the-go solutions have already been rolled out to cater to these consumers, such as microwaveable ready-to-drink cups, or sealed cups that simply require hot water, and solid chocolate on a stick that allows consumers to brew their own hot chocolate without the need for a spoon.

“While consumers are on the lookout for more convenient solutions, they often consider them as of a lower quality than their less convenient counterparts. To offset this, manufacturers must market products as of a premium class through top-quality packaging materials, designs, and packaging claims.”

Newly-designed pouch combines luxury quality of loose leaf tea with the convenience of tea bags

Zhupanova continues: “Packaging innovation should be used to enable on-the-go occasions for hot beverage connoisseurs. Manufacturers have to find ways to cater to tea-loving busy consumers either by highlighting quality of tea bags, a technique which has been practiced for a while now, or by coming up with solutions that allow them to enjoy loose tea on-the-go.”

                                                     Tea

Recently, Grower's Cup Tea Brewer rolled out a drink in a pouch, described by the manufacturer as offering the freedom “to enjoy a gourmet tea experience regardless of place and situation”. The product is packaged as a stand-up pouch allowing consumers to brew loose tea on-the-go. Additionally, the pouch can be refilled with consumers’ own loose tea, enabling them to save costs without compromising convenience or product taste.

Zhupanova added: “This product represents genuine innovation within the hot drinks market due to its refusal to compromise on quality despite being a convenience product, and its cost-saving, refillable design”.

NOTES

Information based on Canadean’s report:Hot Drinks: Identifying the latest trends for beverage manufacturers in the hot drinks industry

All information correct at time of publication and based on Canadean's research methodology.

]]>
Legislation and Ingredients Will Offer Biggest Cost Threats to CPG Industry by 2021, says Canadeanhttp://www.canadean.com/news/legislation-and-ingredients-will-offer-biggest-cost-threats-to-cpg-industry-by-2021,-says-canadean/Wed, 25 May 2016 00:00:00 GMThttp://www.canadean.com/news/legislation-and-ingredients-will-offer-biggest-cost-threats-to-cpg-industry-by-2021,-says-canadean/Rising ingredient costs and new legislation will be the main barriers to profitability for consumer packaged goods (CPG) companies between now and 2021, according to consumer insight firm Canadean.

The company’s latest report into the greatest threats facing the CGP industry states that manufacturers will spend more time adjusting formulations and labelling to account for legislative changes. In addition, suppliers will face increased pressure from buyers to keep ingredient costs down, and there will be continued interest in lean processes across the supply chain to minimize costs and time of production.

Canadean’s research states that 43% of industry executives believe that the costs of ingredients will rise significantly by 2021. Executives in Asia-Pacific are the most likely to identify ingredients as an area of concern, with 55% believing that ingredient costs will rise significantly over the next five years. The World Bank forecasts that the prices of commodities such as coffee, ground nut oil, palm oil, soybean oil, barley, wheat, maize, and rice will increase significantly between 2016 and 2021.

 I Stock _000072362295_Large

Ronan Stafford, Senior Analyst with Canadean, explains: “Rising ingredient costs mean the pressure to stay lean and efficient will only grow. This is good news for ‘big’ data, as the industry will continue to turn to analytics to hunt down any and all inefficiencies in their processes. Suppliers, however, are likely to feel more ambivalent about the news: prices might go up, but so will the pressure from their buyers to get the best possible deal.”

Alongside the concern over ingredient costs, 43% of CPG executives surveyed believed the costs of complying with legislative changes will increase significantly over the next five years. This makes legislation a more expensive threat than the rising costs of hiring experienced staff, or the costs of improving distribution and logistics.

Stafford concludes: “The industry is especially wary of the costs of complying with new food safety acts and laws governing nutritional labelling and marketing claims. This concern is highest in Europe and Asia-Pacific, where governments are signalling an increased willingness to regulate consumer markets.”

NOTES

Information based on Canadean’s report: Opportunities and Threats to the FMCG Industry in 2021: A Global Executives Survey

All information correct at time of publication and based on Canadean's research methodology.

Please get in contact if you have any questions about this or other Canadean reports. Analysts are available to comment. Contact the Canadean press office on +44 (0) 161 359 5822 or email press@canadean.com.

]]>