A significant shift in consumer behavior shows that half of global consumers, including 35% of high-income earners, are now 'value seekers', prioritizing cost-conscious, deal-driven purchases.
In response to economic pressures and changing consumer habits, consumer product (CPG) companies are strategically focusing their portfolios by divesting underperforming assets and doubling down on high-demand product lines.
A vast majority of executives (85%) believe that a focused, 'category killer' business model will outperform broad, conglomerate-style approaches, signaling a major strategic shift towards specialization.
The traditional relationship between retailers and CPG companies is under renegotiation, with increased tension but also new opportunities for deeper collaboration through data sharing and joint planning to better serve the end consumer.
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Concerns Raised
Persistent profitability pressures on CPG companies due to absorbed inflation costs.
The challenge of adapting business models to a dominant 'value-seeking' consumer mindset across all demographics.
Ongoing tension and friction within the retailer-CPG value chain, which can hinder effective collaboration.
Opportunities Identified
Gaining market share by adopting a focused, 'category killer' strategy that excels in a specific niche.
Unlocking new value through deeper collaboration and data sharing between retailers and CPG partners.
Improving profitability by divesting underperforming assets and reinvesting in high-demand product lines.