The FMCG category is broadly defined as goods that have high-volume sales, are held in large inventories, and can be purchased conveniently at affordable cost. FMCG includes items such as biscuits, baked beans, tea, toothpaste, hand soap, toilet paper, juice, fruit and more.
The industry developed in the 1800s alongside industrialisation and grew into a powerhouse in the mid-1900s with the rise of supermarkets. Supermarkets, grocery and convenience stores, are still the primary retailers of FMCG globally, with well-known companies, including Nestlé, Coca-Cola Amatil, and Unilever among the top manufacturers. In both Australia and the United Kingdom, the FMCG industry is the largest of the manufacturing sectors, while the United States is the biggest manufacturer globally. In recent years, however, FMCG exports from the United States have declined, due to many countries not accepting US food processing standards.
Despite recent challenges such as reduced consumer spending power, the ongoing effects of the COVID-19 pandemic, and rising customer expectations, global trends indicate continued growth within the FMCG sector. The market is projected to reach US$18,939.4 billion by 2031, with a compound annual growth rate (CAGR) of 5.1 per cent. Key industry shifts include technological advancements, greater supply chain diversification and transparency, and an increasing focus on sustainability. Additionally, the world is seeing the rise of small innovative businesses disrupting the traditional marketplace.
For Pacific exporters, these trends present opportunities to enter or grow in global FMCG markets. While Pacific manufacturers are inherently challenged by smaller economies of scale and remoteness, recent trends provide avenues for exporters to join supply chains, or create Pacific-centric micro-brands to compete in niche markets.
Consumers are actively seeking more information on how their everyday items are produced. With this renewed customer-oriented focus, large FMCG companies are adopting more sustainable sourcing methods and investing in avenues to showcase environmental and social consciousness. As such, there is opportunity for the prominent Pacific export goods, such as sugar, copra, cocoa, coffee, oils, tuna and root crops, to join the supply and brand stories of major international manufacturers.
Further, micro-brands are changing the landscape globally, and successfully competing with the giants of the industry. Micro-brands are carving out small target markets and servicing them with precision, before breaking into mainstream retail. By investing in understanding their distinct consumer comprehensively, micro-brands are becoming an ongoing lifestyle choice for those consumers. In an effort to cut out the middleman and nurture customer relationships, micro-brands are incorporating hyper-targeted marketing and direct-to-consumer online platforms in their business models. For Pacific-based FMCG companies, there is opportunity to find and target unique customer groups whose product choices are driven by more than price, accessibility and habit. A standout example is Tony’s Chocolonely, a Dutch chocolate brand that has redefined ethical consumption in the confectionery industry. What started as a mission-driven company focused on eradicating slavery in the cocoa supply chain quickly gained traction by offering high-quality, responsibly sourced chocolate. With bold, colourful packaging and a strong social impact message, Tony’s Chocolonely has cultivated a loyal following, expanded internationally, and now competes alongside legacy brands on supermarket shelves worldwide.
The trends reshaping the FMCG industry represent transformative shifts that are fundamentally changing how consumers engage with their daily purchases. As customer expectations continue to evolve and supply chains continue to reorganise, the Pacific exporters who can meet quantity demands, embrace innovation and tell their story simply, are set to be competitive in one of the world’s biggest and most exciting sectors.
