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FMCG Global Barometer

The regions as included in the Barometer report, found themselves in different situations in 2023, each with their own impact on global FMCG development.

The Q4 2023 edition of the Europanel Barometer is now available for download.

For Europe, ‘23 has been another year marked by inflation. Peak levels of 18% (with DE and PL even surpassing 20%) were reached in the first quarter, but since then a gradual deceleration of inflation, which is expected to continue well into 2024.

Downtrading still very much visible in majority of countries, and consumers have increasingly lowered their volumes, even opting out of categories altogether. More than 75% of categories showed volume declines compared to 2021.
Consumers do shop around more often though, with frequency above pre-C19 levels; more, smaller inflation-fueled baskets.

For a 2nd year it is value consumers are looking for, with Discounters and Private Label reaching record highs.

Consumer confidence, despite being low, is increasing every single quarter since early ’22, unemployment levels currently at all-time lows, and early signs of up-trading across countries.
The ‘shock’ and ‘shock-response’ seemed to happen early 2022, but consumers adapt quickly to new circumstances, develop new coping strategies and find potentially lasting alternatives.

LatAm is ‘more used to’ higher inflation, with historic levels typically above global, and the better part of the 20/21/22 at double-digit. Latest year showed some relief for consumers however, with inflation decelerating sharply to below global levels. And it shows; confidence levels are and remain high, unemployment reached 8-year-lows, and up-trading higher than in other regions.

US, despite favourable development in latter half of 2023, experiences value and volume declines throughout 2023. Most notably in Foods, with Home and Personal Care surging late ’23. Smaller baskets in combination with lower frequency are driving factors. The inflation deceleration, which started mid ’22, has yet to convince consumers as confidence remains low(est of all regions).

Asia, the least affected by inflation, has enjoyed moderate growth for the lion part of 2023, but in Q4 volumes, especially in Home Care and Personal Care surged, with a positive impact on global volumes. Growth in the last year has been mainly driven by larger basket sizes in terms of volume.

The outlook for 2024 overall is more positive, with the expectation that inflation is set to decline further.
This should drive confidence levels up, further release consumers budget pressure and bring back lost volumes.
Still, inertia will have consumers stick to newly adopted behaviours to a certain extent, with PL and Discounters more firmly on the map. Their overall improved perception and offering has eroded the premium of brands over time and brand investment therefore remains crucial.