In 2022, the US CPG (consumer packaged goods) sector spent $8.5 billion advertising its products. This number is no surprise considering the highly competitive nature of the market. The right marketing strategy can help a CPG company stand out in a sea of competitors. To understand what that strategy should encompass, you need to understand current trends, the challenges you'll face, and the five keys to a winning strategy. Let's get started.
First, a definition to get us all on the same page. CPG marketing is, “a specific advertising strategy for consumer packaged goods (CPG) companies. CPG goods are perishable goods that consumers regularly purchase or replace, such as household cleaning supplies, cosmetics, food, drink, and clothing.”
The global CPG market is expected to grow to US$3.18 trillion in 2024, of which US$821 billion is in the United States. In the U.S. market, companies allocate over one-quarter of their total budgets to marketing.
CPG marketing includes market research, branding, advertising, customer experience, pricing and promotions, distribution, and support for product development. So, defining a great CPG marketing strategy shouldn't be a question. The right strategy builds brand awareness, drives sales, and creates loyal customers.
But CPG marketers are constantly under pressure because consumer budgets are getting tighter, they are less loyal than ever with an increasing number of alternatives, and the competition is coming from new areas. The old CPG marketing playbook needs to be thrown out, and a new one created that considers new trends and heightened customer expectations.
There are a wide variety of new things CPG brands need to pay attention to, and we’ll focus on five that stand out for 2024:
According to the Consumer Brands Association, the 25-largest CPG brands have committed to increasing recyclable content and minimizing packaging. Of these, 80% are committed to fully recyclable packaging for all products by 2030. In addition, 79% of consumers want to buy sustainable products (especially sustainable food). The ability to market your products as sustainable and share your commitment and journey towards sustainable practices is no longer a nice thing to have - it's essential.
Experiential marketing is a growing trend that CPG brands can take advantage of. Experiential marketing includes interactive on-site branded experiences like pop-up stores, workshops, and classes. Experiential marketing aims to meet consumers where they are, humanize your brand, and create a buzz around your brand and products.
For CPG brands, working with micro- or nano-influencers can help you earn credibility and trust and bring authenticity to your brand that you may not be able to do on your own. Micro-influencers have smaller audiences, but they are highly loyal and engaged followers. Finding influencers that speak to your target audiences is a great way to bring awareness to your brand.
We may be out of the pandemic, but many people have gotten used to skipping the store and instead, shopping from their couches. Traditional in-store CPG brands are building their own DTC (direct-to-consumer) models, either by acquiring existing DTC brands or setting up their own. Marketing for a DTC model differs greatly from marketing when distributors and retailers sell your products.
TikTok anyone? But not just TikTok; add in Instagram Reels and YouTube. Video content and commerce have grown substantially over the past year, and CPG brands should consider taking advantage of this trend. Whether livestreaming new product announcements or educating consumers on how to use products (e.g., cooking shows, decorating, etc.), CPG brands can reach out to consumers directly with engaging and authentic content.
Let's look at five keys to a winning CPG marketing strategy that takes advantage of one or more of the abovementioned trends. These days, a winning CPG marketing strategy is all about first-party data. First-party data is information you collect directly from your customers. It's purchase data, shopping data, personal information, demographics, etc. With access to this type of data, you can tailor your marketing to be more targeted, contextual, and personalized.
The challenge with the CPG sales model is that they often don't have access to first-party data because they sell through distributors and resellers. But it is possible to get it today through several marketing programs, including:
All of these marketing strategies provide more data needed to understand the decisions and behavior of your target consumers. You can then use this information to create more personalized experiences, find the right influencers to work with, and determine which locations would benefit most from on-the-ground experiential experiences.
The best way to know what CPG marketing campaigns work best is to learn from those finding success. Here are five examples to get you thinking.
IAMS partnered with Snipp for a sweepstakes campaign to boost sales and expand its customer base. Utilizing a sweepstakes registration page embedded on the IAMS website, consumers could sign up to receive a $5 coupon and a chance to win a year's worth of free vet care and IAMS food. Prizes included a year's supply of IAMS, a $1,000 Visa Prepaid Card for grand prize winners, and three months of IAMS coupons for secondary winners.
Gen Z-oriented brand E.l.f. created a #eyeslipsface challenge on TikTok tying into the E.l.f. acronym. Users could upload a video of themselves dancing to an original song and post using the hashtag to win $250 worth of E.l.f. products. The campaign earned over 9.7 billion views, mainly due to organic participation by celebrities who got in on the trend. E.l.f also has a loyalty program - BeautySquad - that has over 3 million members.
To incentivize holiday sales of its Arm & Hammer baking soda, Church and Dwight created a purchased-based reward program. Customers who purchase at least two qualifying products could submit their receipt by text, email, or web upload and get download codes for $15 off on $50 at Gifts.com
WK Kellogg Co wanted to reward consumers and drive basket size increases by incentivizing consumers with Kellogg’s branded cereal bowls. They launched a purchase-based gift-with-purcahse (GWP) program where consumers could buy two specially marked boxes of cereal, upload their receipt and choose from one of three cereal bowls. This was a great way to increase basket size and get receipt-based insights.
Liquid Death sells water in a can. It sounds boring, but the brand has built a cult following by leveraging influencer relationships, viral content, experiential marketing events, limited-release editions, and a loyalty program (Liquid Death Country Club). It is a case study of leveraging trends (including its approach to sustainability marketing) that every brand should look at.
CPG marketing has evolved from dealing with in-store promotions and marketing strategies to include a range of digital marketing strategies. Regardless of what strategies you choose, there are some CPG marketing challenges you may need to overcome, including these five:
Before we wrap up our look into CPG marketing, it's important to talk about marketing for specific CPG industries. Although all of the trends, challenges, and guidance discussed here apply to any industry, you can also learn about specific trends and strategies for specific categories. Here are some highlights from the Snipp guides on these specific industries:
Check out the links to each category guide to learn more trends and get some specific marketing strategy ideas.
Mastering CPG marketing requires an adaptive approach that integrates emerging trends, overcomes challenges, and tailors strategies to specific industry dynamics. By staying agile and responsive, CPG brands can effectively navigate the evolving market landscape and drive sustainable growth. Contact us to talk with our experts about how to integrate promotions, loyalty and first-party data into your CPG marketing strategy.