CPGs Will Look Beyond Volume and Price to Power Growth: Deloitte

Only 30% of respondents thought they would increase their prices more than 3% without meaningfully impacting consumer demand.

CPGs have weathered the volatile economy since the beginning of the COVID-19 pandemic by raising prices to compensate for increased costs and seeking to boost volume through advertising and promotional discounts. 

However, a Deloitte report — based on a global survey of executives from food and beverage, household goods, personal care and beauty, and apparel companies — combined with analysis of the world’s top 100 CPGs, suggests that those strategies won’t be enough to sustain growth in 2025.

While inflation has declined, prices remain significantly higher than they were in 2019 and consumers aren’t happy about it. Most of the executives surveyed agreed that they could not count on raising prices to boost revenue this year, with 47% predicting that retailers would push back on the tactic. 

Only 30% of respondents thought they would increase their prices by more than 3% without meaningfully impacting consumer demand, with other executives concerned that consumers would respond by trading down, finding substitutes, or even avoiding category purchases altogether.

The percentage of executives who are primarily leaning on increasing the volume of their sales to drive growth dropped 14% from last year to just 22%. Instead, 95% of executives say they plan to prioritize launching new products with the goal of re-engaging consumers, committing to creating truly novel products instead of just making minor tweaks. 

These plans involve using precision analytics to find opportunities for growth and increasingly also use generative AI to test how well a product is likely to fit the market.

Also read: Gartner Shows Dymanic Pricing May Be Reducing Consumer Trust