What’s on the horizon for the industry - and how will the market adapt?
Forecasting the future growth of FMCG
As reminded in the opening chapter to this year’s Winning Omnichannel, last year we forecast global FMCG growth of +2.2%. The reality was growth of +2.1%.
This year, as with any forecast, there remains several unknown factors that are extremely hard to predict. We are currently (publication written in April 2022) seeing one of the strictest lockdowns over the whole pandemic in Shanghai, witnessing war in the heat of Europe, and seeing inflation skyrocket.
Therefore, we are giving a range of potential growth scenarios for how the industry will perform, without including the inflation effect, ranging from +0.6% growth if the slowdown seen in the second half of 2021 continues, up to +3.8%.
"Our best estimate is that the FMCG industry will continue to slow, and we will see growth of +1.3%."
As inflation will be hitting all regions in 2022, for every +1% inflation we should expect value growth to increase by ~+0.6%.
The future ecommerce
We have applied the same forecasting model to the global channel structure and applied a longer-term view.
What we expect to see is that, online will continue to grow faster than all other channels and gain share, albeit at a slower rate. We forecast that it will gain +0.5% share per annum to reach 7.7% share by the end of 2022 – reaching over 9% share in the next four years.
Hyper & Supermarkets will continue to lose share – but again at a much slower rate than the previous two years – and will still remain at >50% share by the end of 2025.
With Mainland China being so integral to the performance of online, given the lockdown in Shanghai currently the next few months will be key to understand how the channel is performing and whether the channel will reach what we have forecast for the year ahead.
