Read on to explore how COVID-19 has transformed the FMCG and retail landscape.
The extraordinary events caused by the COVID-19 pandemic have had a profound impact on our daily lives – not least in the way we shop – and there’s likely to be continued disruption in buying behaviour for some time to come.
From stockpiling at the start of lockdown, to adapting eating and drinking habits for our new routines of working and socialising at home, there has been several ways in which COVID-19 has disrupted the FMCG industry. In this unique fourth edition of Winning Omnichannel, we will provide a global overview of how the COVID-19 crisis is transforming FMCG and retail dynamics, in turn helping you navigate the complexities of a rapidly shifting retail and shopper landscape.
The data we originally collected and analysed for 2019 was suddenly irrelevant within the context of COVID-19. It quickly became apparent that we needed to prioritise what was happening in the moment for our clients.
We will briefly touch on the pre-COVID-19 global FMCG retail picture, before taking an in-depth view of the impact the pandemic has had on individual countries, channels and categories. We will also provide our predictions on what the post-COVID retail landscape could look like as lockdown restrictions continue to ease around the world. We call this new environment Liquid Retail—a fluid space where the lines are blurred between home delivery, ecommerce, in-home and out-of-home.
Through these insights, you will be able to adapt your strategies and find new growth opportunities in these unprecedented times—whatever the future holds.
In 2019, Global FMCG spend grew from 2.1% to 2.4%, thanks to recovery in the US. In this market, the rise of discounters and proliferation of ecommerce through Amazon and Walmart led to a 0.8% increase to +2.4% annual growth. In nearly every other region we analysed, FMCG growth was slower in 2019 than the previous year. For the first time, growth in Latin America was flat—largely due to the financial crisis in Argentina, as well as poor growth in Colombia, Bolivia and Central America. The two biggest economies in the region – Brazil and Mexico – still performed well with +6.5% and +4.1% growth respectively. Western Europe displayed a similar picture—slowing from +2.2% growth in 2017 to +1.2% in 2019. France and Italy experienced just +0.8% growth each, Germany by +0.7% and the UK by +1.4%. In Asia, growth was fragmented. Indonesia (+6.3%), India (+5.3%) and China (+5%) all performed well. However, the likes of South Korea (+1.2%) and Japan (-0.9%) fell behind. These figures don’t paint a positive picture, but that doesn’t mean growth is impossible. Although growth in Eastern Europe slowed to +7.4% in 2019, it is still growing rapidly compared to other regions. All countries are growing at between +3% and +4%, and the region accounted for 24% of total FMCG growth globally. 25 out of the 52 countries we analysed displayed a FMCG growth rate above the global average (+2.4%). However, 80% of the total growth was generated by four countries— the US, Russia, China and Brazil.
Slowing global population growth is the one trend that will impact every region, with FMCG growth likely to follow suite. By 2050, global population growth will slow to just 0.5% per year, compared to 2.1% in 1969.
