The Consumer Brands Association has released “CPG Ecomomic Pulse: 2020 in Review,” the organization’s first look at a full year of economic data regarding the consumer packaged goods (CPG) industry’s exemplary response to the pandemic last year.
“As the world was swirling in chaos, CPG companies had to focus intensely on output because people needed their products to stay home,” said Geoff Freeman, president and CEO of Arlington, Virginia-based Consumer Brands. “The 2020 economic data is the paper trail of a year when the CPG industry rose to the occasion and delivered.”
The report’s key takeaways are:
- CPG demand in 2020 rose by 9.4% over 2019. Following an unprecedented 21% increase in March, the industry adjusted to the situation and delivered for consumers throughout the year.
- The industry swiftly recovered the initial jobs lost at the start of the pandemic, bringing employment levels up to 98% of pre-pandemic level by October, outpacing the overall economy — and companies are still hiring.
- The CPG essential workforce worked overtime to make necessary products. Wages in the third quarter of 2020 were 3.4% higher than the same quarter of 2019, while wages in the broader economy dipped 0.8%. The increase in wages came as CPG companies were also incurring higher costs for sourcing raw materials, warehousing and transporting goods.
“2020 was a historical anomaly in every way, and its conclusion doesn’t inform the future so much as tell a story about the CPG industry’s response to incredible demand,” added Freeman. “The industry continues to sprint a demand marathon that didn’t end with the calendar year.”
According to Consumer Brands’ 2021 forecast, demand will be 7.4%-8.5% higher than in 2019, the last “normal” year on record. While some demand is expected to decline from 2020 levels as the pandemic ebbs, long-term behavior and lifestyle changes will lead to more at-home consumption.
The full report is available online.
Consumer Brands represents nearly 2,000 iconic brands. The CPG industry contributes $2 trillion to the U.S. GDP and supports more than 20 million American jobs.