In 2023, consumer behavior shifted significantly due to various market forces and global events.
The analysis by Kantar highlights crucial trends and shifts in the FMCG market. It provides a valuable snapshot of how brands and households navigated these changes.
Key FMCG Brands and Their Performance
Coca-Cola has maintained its dominance as the world’s most-purchased brand for twelve consecutive years.
The brand achieved a remarkable 2.6% increase in household penetration, being chosen by consumers nearly 8.3 billion times. This figure underscores Coca-Cola’s robust presence and consumer loyalty.
Colgate also stands out with an impressive global penetration rate of 55.9%. This rate makes it the only brand bought by over half of the global population. This high penetration rate indicates Colgate’s strong foothold in households worldwide.
Red Bull experienced a significant growth of 17.8% in the number of times it was purchased. Its appeal spread across markets such as Brazil, Mainland China, France, Germany, and the United States.
It climbed four ranks to secure the 20th spot, highlighting the brand’s strategic expansion efforts and increasing consumer base.
Spending and grocery trends
The global FMCG market saw a noticeable shift in consumer spending habits. The average grocery spend per household surpassed $1,000 for the first time.
North American households spent the most on FMCG products, averaging $3,063 per household, whereas Bangladeshi households spent the least, averaging less than $159.
Shoppers are mixing premium and treat purchases in their grocery shopping. This reflects the change in coping strategies from 2022. This shift resulted in an average spend per item increasing by 6.7%.
Discount retailers and private labels
Discount grocery stores increased their share of shopper spend by 10.3%, reaching a 16% share globally.
This trend was especially pronounced in Western Europe, where discount stores accounted for 24.5% of the grocery market.
Private label goods also saw a rise. Their market share grew by 0.5 percentage points to reach 22.7%.
This suggests that while consumers are spending more on premium brands, there remains a strong demand for cost-effective alternatives.
Regional differences and spending patterns
The Brand Footprint Study by Kantar revealed significant regional differences.
For instance, local and regional brands accounted for 47% of all FMCG purchases, while global brands held 30% of the sales value. This shows the importance of local brands in maintaining consumer loyalty and meeting regional tastes and preferences.
Sunsilk emerged as a major player in acquiring new customers, with over 26 million new households purchasing the brand in 2023. This growth underscores Sunsilk’s effective market strategies and consumer appeal.
Penetration and Consumer Reach Points (CRPs)
CRP is a crucial metric in understanding a brand’s reach and penetration.
Coca-Cola achieved 8.3 billion CRPs, reinforcing its position as the leading brand globally. The table below highlights the CRP figures for some top brands:
Brand | Consumer Reach Points (CRPs) |
---|---|
Coca-Cola | 8.3 billion |
Colgate | High global penetration of 55.9% |
Red Bull | 1.4 billion |
Sunsilk | Significant new household penetration |
Impact of global economic conditions
The global FMCG inflation rate dropped from 8.4% in 2022 to 4% in 2023. Despite this, the cost-of-living crisis remains a concern. 61% of households are extremely or very concerned with rising grocery costs.
This concern influenced their shopping behaviors, leading to more frequent shopping trips and increased spending on discount groceries.
Market insights
Kantar’s research indicates that an average household made 29 brand decisions each month. This illustrates the complexity and variety in consumer choices. Local brands continue to play a critical role, alongside global giants like Coca-Cola and Colgate.
Shifts in consumer behavior
Energy and Sports Drinks saw a notable rise in household penetration, with sports and energy drinks gaining 1.2% penetration growth.
Carbonated soft drinks also saw an increase, equating to 31.7 million new shoppers.
The increase in premium and treat purchases highlights a significant behavioral shift. Consumers are balancing cost-saving measures with occasional splurges, resulting in a dynamic and evolving FMCG market.
This balance reflects a nuanced approach to spending, influenced by economic pressures and the need for occasional indulgence.
Strategic brand management
Successful brands have managed to navigate these economic pressures by maintaining strong connections with consumers both functionally and emotionally.
Brands that managed to stay “mentally available and physically unavoidable,” as Kantar notes, have performed well despite the challenging economic environment.
Conclusion
Consumer behavior in the FMCG market continued to evolve in 2023, driven by a mix of economic factors and strategic brand management.
Brands like Coca-Cola and Colgate have demonstrated resilience and adaptability, securing their positions in an increasingly competitive landscape.
The insights from Kantar’s Brand Footprint study offer a clear view of these shifts, highlighting the importance of understanding and adapting to consumer needs and preferences.