The formula for growth is simple. There’s really only three levers you can pull: find new buyers, get your buyers to spend more, and/or raise prices.
But, talk to most retailers and FMCG companies today and they’ll tell you that growth is increasingly hard to find. Our population is growing at the slowest rate since the Great Depression. For many categories across FMCG, we’re actually in a deflationary environment. And for many consumers, they’re spending their dollars elsewhere.
So, it’s no surprise that the total FMCG and retail pie doesn’t appear to be growing at all. But we’re not facing a slowdown. What we’re being forced to grapple with is a systemic change to where, how and why consumers are shopping.
But, the good news is, there are new consumers entering the market. Many of those consumers are willing to pay a premium for what matters to them. So, how do we turn those factors in our favor and create real growth?
While e-commerce represents, at best, roughly a third of category sales, it’s growing so rapidly across FMCG that it’s contributing significantly to growth. For edible categories, more than half of all growth is coming from e-commerce. For personal care, e-commerce is driving 80+% of growth. The story for pet care is even more dramatic, where 90% of total growth is coming from e-commerce.