As the new year begins, pricing will be a big topic for companies that produce and sell consumer packaged goods, according to Jacksonville-based sales and marketing company Acosta.
“The topic of price will be on the agenda for both manufacturers and retailers. With increasing transportation and commodity costs, manufacturers will be forced to increase prices,” Acosta Senior Vice President Colin Stewart said in a news release.
“Retailers will be aggressively scrutinizing price inflation to stay competitive in a fragmenting retail environment.”
Acosta provides outsourced sales, marketing and retail merchandising services to businesses across the country. In addition to the impact of pricing, the company predicted a number of trends that will impact the consumer packaged goods industry in 2019.
• Frozen food will have a resurgence. “Shoppers are coming to the realization that frozen is healthy and convenient, with dramatic improvements in quality and variety of prepared foods,” Acosta said.
• Online retailers will expand by moving “selectively” into brick-and-mortar stores or partnering with established retailers.
• Brick-and-mortar retailers will be enhancing the in-store experience. “Convenience, immediacy and the ability to browse and sample will continue to be key draws,” Acosta said.
• As shopping malls decline in importance, they will be anchored more by entertainment and lifestyle destinations. “Expect to see pop-up stores fill empty retail storefronts for seasonal or promotional ‘limited time only’ periods,” Acosta said.
• As people avoid cooking from scratch, grocery home deliveries will focus more on prepared foods and complete meals. That will have impacts beyond food companies. “E-commerce and home delivery create increased stress on trucking and delivery networks, and the infrastructure they depend on. Cardboard and other packaging suppliers and packaging waste will add to refuse challenges,” Acosta said.
• The normal shopping routine is changing. “Stocking up/pantry load shopping trips could be a thing of the past, as consumers are shifting towards quick, fill-in shopping trips,” it said.
• Products derived from cannabidiol, the component of cannabis and hemp that is believed to have medical benefits without psychoactive effects, will rise in popularity. “The stigma of being related to cannabis will continue to decline as marijuana legalization expands and recognition of medicinal value grows,” Acosta said.
Another report last month from Acosta advised retailers to be more mindful of shelf management in their stores.
According to Acosta, manufacturers spend $300 million a year on shelf management, a fraction of the $100 billion spent on promotions. Yet, 66 percent of sales and 85 percent of profits are tied to shelf management practices.
“Fixing the shelf” produces a 6 percent increase in sales, it said.
“Shoppers report that more than half of their grocery buying decisions are made at the shelf, proving that influence in-store is crucial for brand success,” Senior Vice President John Clevenger said in a news release.
Acosta said consumers make decisions at the shelf on products such as spices/seasonings, cookies, meat marinades/rubs, chocolate candy and tuna.
