Brand Innovators 2021 Outlook: CPG

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In the second installment of our new 2021 Outlook Series, Brand Innovators talk to CPG CMOs and marketing leaders for insights into what to expect next year, and how the category will innovate as consumers continue to spend more time cooking at home.

In the second installment of our new 2021 Outlook Series, Brand Innovators talk to CPG CMOs and marketing leaders for insights into what to expect next year, and how the category will innovate as consumers continue to spend more time cooking at home.

As CPG marketers look ahead to 2021, they hope to maintain the momentum they experienced during the pandemic and will focus on how to engage consumers in innovative ways.

From canned foods and packaged snacks to toilet paper and soap to beer and wine, consumers stocked up on their favorite CPG necessities in the spring and continue to keep these items on hand as the virus continues to spread. CPG companies have had to ensure their products are easily available to customers.

“If there’s one lesson from 2020, it’s agility,” said Linda Lee, Chief Marketing Officer of Campbell’s Meals and Beverages. “The ability to course correct and redirect quickly will be crucial across CPG marketing in 2021. The pandemic has drastically changed how consumers are shopping for and engaging with our products.”  

CPG benefitted in ways that other categories did not this year. While people held off on luxuries, apparel and high ticket items like cars and vacations, everyone needed groceries. The desire to cut down on trips to the store and have less contact with people outside of their homes drove kicked digital shopping into the next gear for the CPG category.

The category has traditionally focused on television advertising, but as consumers are ordering more goods online digital is becoming a more important channel for CPG marketers. Digital ad spending is expected to increase 5.2% to $19.40 billion in 2020 and will reach $22.58 in 2021, according to estimates from eMarketer.

“We’ve seen ecommerce adoption accelerate by five years and, as a result, brands will have to navigate both top and bottom of funnel marketing tactics using real-time data and quick pivots,” Lee continued.

Audra Carson, Sr. Director, Integrated Marketing Communications at Post Consumer Brands Cereals, says that even as 2020 was unconventional, it was especially "exhilarating and exhausting for CPG marketers."  "When demand for our products increased practically overnight – we had to build and flex a lot of new muscles as marketers – the biggest one being our agility," says Carson. "We had to throw out our set plans and create new ones, on the fly, that may have only been good for a few weeks at a time – and then we had to do it again. As we look ahead to F21, I’m not sure that we’ll ever got back to our where we’ve been.  Our marketing strategies and plans are going to have to live more in the moment."

Brands looking to connect with consumers who are spending more time online have been adapting their messaging and this will only get more nuanced and sophisticated in 2021.

“The COVID-19 pandemic has changed how consumers shop,” said Zehra Raza, Senior Marketing Executive, Product Manager at Hershey Canada. “Companies understand that consumer-decision journeys will now include more digital touchpoints, and shoppers will expect companies to have a consistent presence, both, online and offline.”

“With the growth in ecommerce, many need to adapt even faster with more nimble supply chains,” Raza added. “Going forward, our goal is to continue to deliver meaningful value to consumers to continue to stay relevant. This will require a holistic, full-funnel approach to commerce, with relevant product offerings and the right balance of distribution channels.”

Home cooking has also been a big trend this year, and brands will likely continue to try to keep people inspired in the kitchen next year. “In product development as another example, we expect a need for at-home, easy mealtime solutions and brands will have to provide inspiring new products to combat cook-at-home fatigue,” Lee said.

Surbhi Martin, Vice President of Marketing at Danone, expects these changes in consumer behavior to continue into the new year. “There is going to be some sustained consumer behavior changes post covid going into 2021,” Martin said. “I think that primarily consumers are going to be continuing to cook more from home and continuing to seek greater value.”

This trend will follow into the drinks category as well, as consumers continue to stay home from bars and drink at home for virtual happy hours with friends and colleagues. Pernod Ricard USA has seen the growth and upscaling of ready-to-drink formats such as cocktails in a can to increase and expects this to continue into 2021. Also, since March, the brand has identified that about 10 percent of drinking occasions are taking place through social events online.

“While there is some fatigue, the durability of the trend is surprising,” said Regan Clarke, Vice President of Millennial Connector Brands at Pernod Ricard USA. “As consumers are evolving their homes to be their first, second and third place (living, working, and socializing), we see an acceleration of ‘hometainment,’ and with it more engagement with what brands they choose to bring into their homes, and the role that the brands and products have in their lives. We are continuing to evolve the complexity of the drinks, the flavors, packaging formats, and even bring in new technologies.”

Makeup is a core CPG product category that has transformed this year. As consumers avoid in-store testers and make-up counters in favor of better hygiene, makeup brands have been pushing AR and VR experiences in apps, as well as partnerships with social influencers to take the place of a store employee to support digital sales this year. This trend will only accelerate in 2021.

“The consumer product goods industry has seen unprecedented explosion in ecommerce sales and need for content to support new at home consumer behaviors,” said Melissa Hughes, Global Marketing Director at L’Oreal. “In 2021, you can expect teams will be poised for agility when it comes to content development focused on continued engagement of newly gained “COVID-19” consumers.”

Candy makers see an opportunity to delight consumers, giving them small moments of pleasure in what can be a stressful time. They will likely focus their marketing in 2021 on these small indulgences.

“The attention of consumers is in more demand than ever, which makes the job of CPG advertisers and communicators increasingly challenging,” said  

Mark Wakefield, Senior Vice President of Marketing, Nutella, Chocolate & Snacks at Ferrero. “We will need to find new ways to give audiences some return on their time invested with campaigns that are not just interrupting, but actually entertaining and even delightful. At Ferrero we try to make the world a sweeter place by bringing people joy through our products, but also through our marketing and communications.”

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