Analysis

2023 consumer products industry outlook

Pursuit of profitable growth in challenging times

An industry known for stability and consistency confronts the whipsaw of change. In this environment, the best signal of success comes from those consumer packaged goods (CPG) companies that solve an increasingly complex equation to achieve profitable growth. Prepare for the year ahead and help your business embrace the changing consumer with actionable insights from our 2023 consumer products industry outlook.

Report preview—State of the consumer products industry

Feeling a little frazzled? Whether you are an executive with a food and beverage, household goods, personal care, or apparel company, 7 in 10 respondents say their job is more stressful today than it was five years ago. Despite favorable tailwinds for the industry in recent years, executives’ stress levels today are no surprise. Record inflation, supply chain issues, labour shortages, global conflicts, climate change, and a potential recession—each in isolation is challenging. Combined, they are overwhelming.

And consumers' heads are likely spinning. Their context keeps changing and with it their behaviors. Major demographic, political, environmental, technological, and cultural shifts are underway that forecast more change to come. Executives in our survey think keeping up with the changing consumer will be one of their greatest challenges.

Managing to grow sales and profit margins while chasing the changing consumer in an inflationary and challenging economic environment is no easy feat.

2023 consumer products industry outlook

Specific actions set profitable growth CPG companies apart

So, what sets these leading companies apart? We find that profitable growth leaders act and invest differently in five distinct areas:

  1. Embracing the changing consumer
  2. Going for market share
  3. Creatively transforming
  4. Driving data through supply chains
  5. Prioritising environmental, social and governance (ESG)

To take a deeper dive into these strategies and help position your company for profitable growth, download the full report.

As consumer product companies struggle to obtain the inputs and commodities they require, they also face a changing geopolitical and business environment. This involves governmental restrictions on technology transfer, fraught relations between the world’s greatest powers, and increased regionalisation of supply chains. It also involves new efforts by global companies to reinforce supply chain resilience and redundancy, partly by diversifying supply chain processes and no longer depending on just one country or supplier. As a result, we may begin to see a consumer products industry emerge that is, in many ways, more diverse than before.

Dr Ira Kalish, Chief Global Economist, Deloitte

 

Read the complete consumer products industry economic outlook from Dr Ira Kalish by downloading the report.

About the report

Deloitte surveyed 150 consumer products executives from an industry-proportional mix of food and beverage, household goods, personal care, and apparel companies in November 2022.

Most of the companies are multinationals, all with more than £400 million ($500 million) in revenue. We conducted additional surveys with executives in Japan and China (50 in each country) to expand our view into those unique consumer markets. Survey questions were developed through an analysis of trending topics found in company communications and disclosures using an AI-assisted analytics tool, as well as through internal surveys and interviews with Deloitte client leaders in each consumer market.

Finally, we conducted a financial analysis of consumer products companies in the top 30th percentile of performance based on three-year average total shareholder return, return on assets, and economic margin productivity as well as three-year revenue and EBITDA growth to ensure they fit our profitable growth profile.

Authors: Nick Handrinos, Leon Pieters, Justin Cook, Céline Fenech, and Jagadish Upadhyaya

If you’d like to discuss any of the future consumer trends mentioned in the outlook or how your organization can drive CPG growth this year, let’s set up a conversation.

Did you find this useful?