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Perspectives

2022 CAGNY conference highlights

Key trends in the consumer products industry

In the last week of February, several of the world’s top consumer packaged goods (CPG) companies presented their recent results and long-term strategies at the annual Consumer Analyst Group of New York (CAGNY) conference. We were there to take it all in. Here’s the big picture on the most important topics discussed this year, along with insights on how 2022 priorities compare with 2021.

The CPG industry wants to out-innovate inflation

At CAGNY 2022, there was one hot topic most people could probably anticipate: Inflation. After essentially being off the radar at last year’s conference, inflation came up in almost 9 out of 10 CPG company presentations. Phrases like “unprecedented” and “uncharted territory” were quite common. Inflation as a theme came in second only to sustainability, which was covered universally in both 2021 and 2022.

Continue reading for key takeaways from the conference and download our year-over-year comparative analysis chart for the top trending topics discussed at CAGNY 2022.

Leaning in on innovation

Rising costs of inputs, packaging, labor, and transportation pose a problem for the industry, but CPG companies said they have a few ways of managing it. Continued dedication to core innovation is one approach. Companies are creating new, premium offerings that can command higher prices. They’re also taking the opportunity to innovote costs out of (and more sustainability into) current offerings.

In addition to their premium offerings, many companies emphasized the breadth of their product portfolios. Consumers continue to bifurcate in a generally K-shaped recovery.1 Keeping lots of different pack sizes with both high and low-end offerings facilitates tradeoffs within a company’s brands―so that as prices go up (or consumer financial viability goes down), they don’t lose the consumer completely.

Finessing prices higher

And prices are likely going up for products in those portfolios. “Price elasticity” was discussed about as often as inflation. Many companies believe their consumers are willing to absorb even higher prices, to a degree that breaks with what even their own historical models would have predicted.

Improved revenue growth management (RGM) capabilities were discussed as a way to get the most from those portfolios and generate effective price increases. Premiumization and revenue management were featured in three out of four presentations and, as a trending topic, jumped 25 percentage points over last year.

Many companies believe their consumers are willing to absorb even higher prices, to a degree that breaks with what even their own historical models would have predicted.

Pursuing other options

Of course, companies will also have to do what they can on the cost side of the equation. Improving margins and cost reduction rose 10 percentage points to become a top five trend in 2022. Relatedly, supply chain problems are a key contributor to increased costs and more companies this year say supply chain and operational efficiency are a focus for them. But companies may have their hands somewhat tied on labor costs. Winning the war for talent is becoming critical. It will take more than higher wages, including creating a sense of belonging and pursuing DEI initiatives, but paying more will likely be part of the equation.

CPG companies are looking for even more growth in emerging markets and in pursuing offerings associated with the health and wellness consumer trend. These topics rose 17 and 25 percentage points respectively over 2021.

Trending downward

But not all topics are trending up. COVID-19 was part of every company presentation last year. In 2022 it featured primarily in reference to the early challenges of the pandemic and didn’t play heavily in company going-forward narratives. Similarly, while the “E” in environmental, social, and governance (ESG) factors received substantial attention, direct discussion of social responsibility fell off somewhat from last year’s highs. Instead, some companies focused more on ESG awards and recognition than they did on taking specific stands relative to social issues.

Download Deloitte’s year-over-year comparative analysis chart to see all 20 of the top trending topics from this year’s CAGNY conference. For an even deeper dive into the year ahead, see Deloitte’s 2022 Consumer Product Industry Outlook.

1 The pursuit of happiness … if you can afford it, Deloitte 2022. Disparity in income distribution in the US | Deloitte Insights

CAGNY 2022 roundup

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