Where did the first half of 2015 go? Who knows, but the reality is that 2016 is speeding towards us. We’ve gathered conclusions and research from industry experts to tell you what the coming year - and beyond - will bring for the FMCG industry in the UK and other markets.

Health related products will flex their muscles

Consumers will continue to explore a very wide variety of ways in which to improve their health, fitness and general well-being. Convenience is king in every upcoming trend, and ‘magic bullet’ health solutions will be in high demand. Those manufacturers and retailers who are able to respond to the ‘holy grails’ of weight management, disease prevention and life extension will be in a strong position to make a killing - so to speak!

The range of foods and supplements readily available to the health conscious is impressive and growing. Convenience grocer musclefood.com have recently added raw camel milk to their e-shelves which already groan with premium nutrition foods from bug burgers (yes, that’s right; burgers made from Buffalo worms) and horse, ostrich and kangaroo meats to high protein/low carb crisps.

Raw Camels Milk on sale at musclefoods.com

Raw camel milk & bug burgers are on the menu for some increasingly health driven lifestyles

At the heart of almost every lifestyle trend are products; supplements, diet regime foods and self-care products. When and how these trends are played out will be heavily impacted by an explosion in the use of fitness devices and apps, as well as online research and shopping.

Food products which are covert about their high sugar content will be exposed and left vulnerable by the expansion of consumers’ knowledge. Health oriented shopping apps aim to detect and reducing the presence of refined sugars in the everyday diet; the sugars will be increasingly replaced by fruit sugars. Meanwhile plain old bottled and tap water is even replacing fruit juices in some diets, with bottled water sales surging 11.1% [source: The Grocer].

Protein shakes and supplements are still increasing in popularity - so much so that protein powder now appears in the basket of goods which the Office of National Statistics uses to calculate inflation. For the ultimate in convenience and speed, meal replacement shakes are popular with those who on fitness and training regimes, or who simply don’t have the time or access to a nutritionally balanced meal.

Mental health and feelings of well-being will also feature. Global consumer insights company Canadean says that Britons are still worrying about the state of the economy and how to pay their bills. It reports that “manufacturers should look to develop products that more clearly help people enjoy ‘feel-good’ moments of consumption that in turn help them to take a break from daily stresses". [source: Canadean].

No Boundaries for Innovative Emerging Markets

Despite a recent slowdown in FMCG in the BRIC and MENA countries, growth is expected to continue to be healthy; innovations developed for and in the emerging markets will have a worldwide impact.

Canadean says that what is happening in the emerging economies like Mexico, Thailand and Egypt will be felt directly at home. Analyst Ronan Stafford explains that “Companies have already seen the value in setting up innovation centres in emerging economies to help tailor their products to consumer needs. However, innovations from emerging economies are now also transmitted back to developed countries.”

The figure Canadean applies to this is up to US$1.66 billion worldwide in 2018. [source: Canadean].

Low cost innovations in food packaging in new markets will translate to advanced European economies where austerity hit consumers demand that every last drop of value is squeezed from their grocery spend. The Western appetite for experimentation with a greater variety of tastes and flavours increases demand from emerging economies like Africa and the Far East.
Put succinctly, Stafford says “The more big brands invest in targeting consumers in Lagos, Jakarta and Hanoi, the better they will meet the value and experience-seeking needs of consumers in New York, London, Madrid and Sydney”.

Supermarket Ecommerce and Other 'Micro-moments'

Ecommerce is going to be of huge significance to brands in coming years. Global online sales in FMCG are forecast to reach $130 billion by the end of 2025 according to Kantar Worldpanel's hot-off-the-press-report “Accelerating the growth of e-commerce: 2015 Edition”.

The UK’s supermarkets lead the world in online grocery shopping, with an average 13.6 FMCG purchase acts online per household in 2014, compared to its European neighbour France, with 8.4 purchase. Seemingly contrary to Google’s prediction that brand loyalty is dead, the Kantar report asserts that the UK’s online shoppers spend 23% of their annual FMCG spend with the same retailer; it is the early investors like Tesco who are winning. [source: Kantar Worldpanel].

Kantar Worldpanel research into FMCG sector trends

The Kantar Worldpanel report is based on the purchasing habits of 100,000 shoppers in ten of the biggest online FMCG markets

The reports points out that there is still a large latent potential for FMCG in ecommerce and, for example, that in South Korea - the next largest market after the BRIC economies - nearly 60% of households spend on FMCG online at least once a year.

From ordering online to researching the nearest outlet with smartphones, consumers will have access to more and more ways to use technology to find and buy what they want with greater speed, decisiveness and convenience than ever before. They will be able to find the nearest running shoe shop to their location, view the in-stock products, and reserve for collection all before they step through the door. 

Google is telling its advertisers that the winners will be the brands who understand a new kind of shopping behaviour

Successful retailers will heed Google's statistic that the 82% of smartphone users turn to their phone to inform a purchase decision once in store. Google also predicted this year that loyalty to brands is dead; consumers are interested in retailers who can fulfil their needs with relevance and quality in their marketing, delivering them to the virtual product shelves within seconds of conducting a search.

"Mobile has forever changed the way we live, and it’s forever changed what we expect of brands. It’s fractured the consumer journey into hundreds of real-time, intent-driven micro-moments. Each one is a critical opportunity for brands to shape our decisions and preferences." [source: Google].

Apps & Technology Changing How We Shop - Forever

Augmented reality has already arrived at the doors or retail, but existing use has barely scratched the surface of its potential to influence how people shop on their mobile devices.

Augmented reality will impact how we shop for FMCG

Scan a wine bottle label on an Apple or Android device and Winesearcher.com’s app will identify the product and supply further details about the wine and a live list of dealers and prices. Apps like this enhance product detail and bring the customer to the retailer in a way not currently possible on a PC.

Technology can also help to fill that gap in the visual knowledge usually only available to shoppers in store. Lego have developed kiosks in stores which, when the product box is held up to the screen, 3D visuals of the built product are displayed.

Rise of Own Brand and Feel-good Products

Polarisation of spend on the grocery pricing spectrum during recession years has seen the British middle classes as happy shopping in the discounters like Aldi and Lidl as they are for more premium products in Waitrose and M&S. Savvy consumers are choosing to use the supermarkets’ own brands over the mid-market products, in order to be able to ‘up-spend’ on luxuries and feel-good products. Whether shoppers continue the habit, or whether it will lapse as feelings of financial security strengthen, remains to be seen; what is certain is that supermarkets and brands will have to react and adapt accordingly in order to survive.

Whatever your product area, understanding convenience and lifestyle driven, multi-channel and impulsive behavioural changes in the way we shop will help to insulate your brand from fickle loyalty in crowded marketplaces.