Disruptive Business Models Drive Growth in Consumer Products Industry

Disruptive business models have taken the CPG market by storm and driven competition and growth within the industry. One successful approach maximizes the use of social media to reach their customers directly, providing consumers with price-conscious options. Here are three areas where they continue to grow in 2018.

1. Meal Kits and Meal Delivery

Since traditional meal planning takes more time and energy than active working consumers have, a growing number of them are left searching for alternatives that are both cost effective and save precious time. Meal kit subscription services are becoming increasingly popular. For example, HelloFresh allows you to pick a plan depending on your dietary preferences, schedule, and household size. eMeals is another trendy business model that offers a convenient, affordable solution to getting healthy dinners on your table for as low as $5/month for the subscription to their menu planning. “Meal kits and online grocery programs are reshaping the grocery market, and we are the first company to combine those two trends,” eMeals CEO Forrest Collier said in a statement. “Adding AmazonFresh to our fulfillment lineup expands our reach to most of the top players in online grocery and advances our mission of giving customers more choice, flexibility and affordability than any other meal kit service.”

2. Product Subscriptions

The success of many disruptive start-ups, like Dollar Shave Club, can be attributed to technological change and a leaner business model. Dollar Shave Club leveraged digital channels like YouTube rather than television advertising to disseminate its message. They also used an online platform to register new customers streamlining the whole process. Similar to meal kits and delivery services, CPG subscriptions were also conceived to provide consumers with cost-effective alternatives to traditional retail options. For instance, Dollar Shave Club allows consumers to join for as little as $3/month for razors shipped directly to their homes.

3. Grocery Delivery

The list of grocery chains offering online or app ordering has grown to include most of the major hypermarkets and supermarkets. Online grocery sales in the U.S. are forecast to grow an average of 18.1% annually during the next five years. A press release from Packaged Facts has predicted that Amazon grocery sales could exceed $30 billion by the year 2025 further disrupting retail grocery sales. “We expect hypermarkets and supermarkets to face a more challenging time … However, as sales shift online, both types of stores are innovating with new ways to entice shoppers in-store and merge the digital and physical worlds — for example, by developing healthcare hubs, investing in their prepared foods and food-to-go ranges and using digital tools to inform, engage and reward shoppers,” Stewart Samuel, IGD North America program director, said in a statement.

The CPG industry will continue to evolve in creative ways to meet consumers demand for innovation and variety. Only time will tell what the next breakthrough in the industry will be as startups continue looking for original ways to provide customers with low-cost options.

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