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Welcome to the second edition of OurView: Consumer Packaged Goods. In this edition, we will provide insight into the latest Canadians purchasing trends and some interesting facts on sustainability & CPG.

Consumers Buying Habits

In Canada, smaller consumer packaged goods (CPG) companies are steadily gaining market shares. In its latest market tracker, Neilsen Canada, reveals that the total Canadian CPG market sales grew by $1,524.8 million in 2018. Furthermore, the cumulated sales growth for the top 101 brands in Canada amounts to $514.8 million. Overall, the top 20 selling brands controlled 30% of the Canadian CPG market share, and yet their sales only grew by $202.8 million last year. The remaining 81 brands of the top 101 plus brands had a market penetration just under 26% but managed to increase by $312.6 million. These smaller but not necessarily lesser brands were able to produce a niche in the Canadian CPG field as they are growing nearly twice as fast as the top 20 players. Along with market share gains, these smaller brands were also able to distribute their products at a higher mark-up than their bigger competitors. Moreover, the report also affirmsthat food brands are especially popular among Canadian shoppers. Nearly two-thirds (64%) of the top 101 brands consist of food brands (foods and beverages) and that they grew more than 6% in revenue over the past year. Another interesting fact is that Canadian consumers are also demonstrating an increasing appetite for  domestic-made products. More than half (51%) of the smaller brands are local Canadian brands, which had a growth rate of 4% versus only 1% for smaller U.S. brands.

Sustainability continues to drive sales growth in CPG

In a comprehensive study by NYU Stern’s Center for Sustainable Business notes that from 2013 to 2018, the sales of sustainable (CPG) products increased by 29% to nearly $114 billion and this figure is expected to reach $150 billion by 2021. Moreover, sustainable marketed products attained a much higher growth rate than traditional products in 33 of the 36 CPG categories examined. For instance, products with sustainable claims grew 560% more than goods from the same category without sustainable applications. More importantly, nearly half (50.1%) of packaged goods market growth from 2013 to 2018 comes from these eco-friendly alternatives despite representing only one-sixth of the sector’s market share in 2018.

Furthermore, Nielsen states that 73% of global shoppers surveyed plead that they would definitely or probably change their shopping behaviors to lessen their environmental footprint. Interestingly, toilet paper, facial tissue, dairy products, coffee, salty snacks, and bottled juices were among the products with the highest sustainable marketed share penetration in their category at more than 18%. Conversely, items that require a higher degree of expected performance, such as detergent and floor cleaning products had less than 5% share in their respective categories. Could this be because consumers still perceive sustainable consumer packaged goods as being less effective than their conventional counterparts?

Stewart Soh
Metro Supply Chain Group