North America Consumer Packaged Goods (CPG) Market Outlook to 2028

North America Consumer Packaged Goods (CPG) Market Overview

The North America Consumer Packaged Goods (CPG) market was valued at USD 630 billion in 2023. This growth is primarily driven by changing consumer preferences, increasing disposable income, and the rise of e-commerce, which has expanded the reach of CPG products. The CPG market encompasses a wide range of products, including food and beverages, personal care items, and household goods.

Major players in the North American CPG market include Procter & Gamble, Unilever, Nestl, Pepsi Co, and The Coca-Cola Company. These companies dominate the market through extensive distribution networks, strong brand recognition, and continuous innovation in product offerings. Their ability to adapt to changing consumer preferences and invest in digital transformation has positioned them as leaders in the industry.

In 2023, Unilever announced a investment of USD 200 million in its North American operations to enhance its digital capabilities and sustainability efforts. This investment is aimed at reducing the companys carbon footprint and increasing the use of recycled materials in packaging. This move aligns with the growing consumer demand for environmentally friendly products and reflects Unilevers commitment to sustainability.

United States dominates the market in 2023, as reported by Euromonitor International. This dominance is attributed to the large consumer base, high disposable income, and a well-established retail infrastructure. Within the U.S., California and Texas are the leading states due to their large populations and significant retail markets.

North America Consumer Packaged Goods (CPG) Market Segmentation

North America CPG market is segmented into various segments such as product type, distribution channel and region.

1.By Product Type: The market is segmented by product type into food and beverages, personal care products, and household goods. In 2023, the food and beverages segment held the dominant market share. This dominance is due to the high demand for packaged food and beverages, driven by the growing trend of convenience and on-the-go consumption. The increasing preference for healthy and organic food products also contributes to the segments growth.

2.By Distribution Channel: The market is also segmented by distribution channel into supermarkets and hypermarkets, convenience stores, online retail, and others. Online retail is expected to dominate the market share in 2023, driven by the increasing adoption of e-commerce and the convenience it offers. The COVID-19 pandemic accelerated the shift towards online shopping, and this trend is expected to continue, with more consumers preferring the convenience and safety of online purchases.

3.By Region: Geographically, the North America market is segmented into United States and Canada. The United States, including states like New York and Massachusetts, dominated the 2023 market share. This dominance is attributed to the high population density, higher disposable income, and a strong retail presence. The regions diverse consumer base and preference for premium and organic products also contribute to its leading position.

Region

Market Share (2023)

North

20%

South

30%

East

40%

West

10%

North America Consumer Packaged Goods (CPG) Market Competitive Landscape

Company Name

Establishment Year

Headquarters

Procter & Gamble

1837

Cincinnati, USA

Unilever

1929

London, UK

Nestl

1866

Vevey, Switzerland

Pepsi Co

1965

Purchase, USA

The Coca-Cola Company

1892

Atlanta, USA

Unilever: Unilever has been managing its portfolio in North America through acquisitions and disposals.In recent years, the company has acquired several brands like Smarty Pants Vitamins in 2020. It is also strengthening its investment in the fast-growing health and wellbeing sector, with the Unilever Health & Wellbeing Collective now a 1 billion+ portfolio of lifestyle brands.

Pepsico: The company has diversified its packaging strategies by introducing new offerings include Frito-Lay Minis, which are bite-sized versions of popular snacks, and the introduction of paper-based solutions to replace plastic rings in multipack beverages.This shift not only caters to consumer preferences but also supports sustainability initiatives aimed at reducing plastic waste.

North America Consumer Packaged Goods (CPG) Industry Analysis

Growth Drivers

E-Commerce Expansion: The market's robust digital infrastructure supports this growth, with over 300 million internet users in the United States and Canada combined. The expansion of e-commerce platforms like Amazon and Walmarts online marketplace further facilitates this trend, providing consumers with easy access to a wide range of CPG products. This boom in online shopping is fueled by consumer demand for convenience and increased disposable income.

Increased Health and Wellness Awareness: There is a growing consumer focus on health and wellness. This shift is driven by increased awareness of the benefits of healthy eating and sustainable living. As a result, CPG companies are investing in product innovation to cater to this demand, introducing new product lines such as plant-based foods and beverages. Additionally, U.S. Food and Drug Administrations guidelines on nutrition labeling, encourages manufacturers to enhance product transparency, which further boosts consumer confidence.

Innovation in Product Offerings: Companies are increasingly focusing on developing new products that cater to changing consumer preferences and trends. In 2024, it is estimated that CPG companies will launch over 5,000 new products across various categories, including food, beverages, and personal care. The ability to adapt quickly to market trends through product innovation is a key factor contributing to the growth of the CPG market in North America.

Challenges

Rising Raw Material Costs: The cost of essential ingredients such as wheat, corn, and sugar has increased putting pressure on manufacturers margins. This inflation in costs is attributed to several factors, including adverse weather conditions affecting crop yields, geopolitical tensions disrupting global trade, and increased demand for agricultural commodities. Consequently, CPG companies are grappling with higher input costs, which may lead to price hikes for consumers.

Intense Market Competition: The market is highly competitive, with numerous well-established brands and new entrants vying for market share. This crowded market environment forces companies to continuously innovate and differentiate their products to capture consumer attention and loyalty. Competitors can erode profit margins and lead to market saturation, posing a challenge for companies aiming to maintain or expand their market presence.

Government Initiatives

Food Safety Modernization Act (FSMA) Compliance: In 2024, the FDA allocated an additional USD 50 million to bolster compliance monitoring and inspection activities. This funding is intended to ensure that Consumer Packaged Goods (CPG) companies adhere to food safety standards, thereby reducing the risk of foodborne illnesses and protecting public health. The emphasis on compliance means that companies are required to implement robust quality control systems and invest in employee training.

Support for Local Manufacturing: Established through an Executive Order in January 2021, the Made in America Office (MIAO) within the Office of Management and Budget (OMB) oversees the implementation of these policies. This initiative provides financial assistance, such as grants and low-interest loans, to companies that invest in local production facilities and create jobs in the United States.

North America Consumer Packaged Goods (CPG) Future Outlook

The North America CPG market is expected to continue its growth. The markets future growth will be fueled by technological advancements, increased focus on sustainability, and the expansion of e-commerce. Additionally, companies will likely focus on personalization and direct-to-consumer strategies to better meet the evolving needs of their customers.

Future Trends

Growth in Personalization and Customization: Over the next five years, the market will see an increase in personalization and customization of products. Companies will leverage advanced data analytics and AI to understand consumer preferences and deliver tailored products that meet individual needs. North America will engage with personalized CPG products, reflecting a growing trend towards customization in the market.

Expansion of Sustainable and Eco-Friendly Products: The demand for sustainable and eco-friendly products is expected to rise significantly in the coming years. North American consumers will actively seek out CPG products with minimal environmental impact. This trend is driven by increasing environmental awareness and regulatory pressures, prompting companies to invest in sustainable sourcing, packaging, and production practices to meet consumer expectations and comply with evolving regulations.
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