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Tackling decline in the FMCG market

Posted almost 2 years ago by Julia Williams
Pexels Photo 264529

After a turbulent year the UK grocery market is reportedly on the re-bound, with overall sales growing by 0.5% in the past 12 weeks (September 2019). Yet, despite growth amongst retailers, the overall FMCG market is experiencing difficulty, with 18 of the top 20 grocery and healthcare brands in decline. This is sparking concerns over the stability of the sector.

The decline of top FMCG brands is primarily associated with an increase in consumer demand for local and own-brand goods, driven by value for money associations. This may explain why discount retailers such as Aldi and Lidl are outperforming the big four (Sainsburys, Tesco, Asda, Morrisons) supermarkets.

To differentiate themselves, brands are tapping into the premiumisation trend for higher quality and exclusive goods. This is in hopes of reaching niche markets and growing premium categories to make up for financial shortfalls.

Whilst for technology or health brands this trend has potential, for FMCG categories premiumisation can be more difficult to pitch correctly.

For example, KitKat prides its self on its quick snack break slogan, but if you add a £14 custom bar to the mix consumers may find themselves moving towards the (still) premium but more accessible Cadburys dark milk as an alternative.

It is clear branding has a significant effect on performance in today’s FMCG market, but what do you do if premiumisation is not for you?

 

 

How to differentiate

Consumer goods firm P&G maintain their growth through enforcing a marketing strategy driven on creating superior consumer value - offering a proposition which is better than their competitors to drive mass audience interest.

Though the FMCG market is currently driven by economic functionality, 64% of consumers want to feel connected to brands. It is here where differentiation strategies can be enforced.

For instance, Pampers recent ‘love the change’ advertisement, tapped into the fears and challenges of new parenthood to create a resonating message for its audience. This tactic is proven to create an emotional bond with brands, decreasing the likelihood of brand switching.

Creating emotional connections is further proven to create long-term financial value for brands, with 70% of consumers spending twice as much and further recommending the brand to friends to boost audience growth.

More than ever, appealing to the mass market on an authentic level becomes real consideration  in maintaining brand value amongst consumers.

Keeping alternative strategies open may enable brands to obtain longer term growth compared to when implementing expensive ventures for short-term benefits.


For a more detailed chat about current FMCG trends and how we could help you source the right people to benefit your brand strategy get in touch today.

 

Image credit: 

Header: Shopping carts aligned by Pixabay https://www.pexels.com/photo/aluminum-black-and-white-business-cart-264529/

Image 1: Grocery cart with item by Oleg Magni https://www.pexels.com/photo/grocery-cart-with-item-1005638/