2025 CPG Predictions: Grounded in a Digital-First World

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Dec 12, 2024, 08:00 ET

By Lesley Salmon, Chief Digital & Information Officer, Kellanova

CHICAGO, Dec. 12, 2024 /PRNewswire/ -- If you could predict the future, how would you do things differently? The CPG industry is experiencing significant change with the convergence of technology, economic pressures, and changing consumer behaviors.

Understandably so, the last couple of years have been tumultuous, with supply chain bottlenecks, the rise and experimentation of artificial intelligence (AI), and inflation woes causing consumers to reduce spending.

But amid the disruption is opportunity – and lots of it. As we look ahead to 2025 and beyond, here are five predictions from Kellanova leaders that will redefine the landscape of the CPG industry:

Prediction 1: Generative AI will reinvent marketing

2025 will signal a marked acceleration of AI in marketing as companies move past pilot purgatory and can scale models that create highly personalized consumer interactions, automate processes, and provide predictive data and analytics strategies.

"It's important to note we marketers are not competing with AI. We're competing with other marketers using and scaling AI faster. There will be more competition to drive brand affinity as smaller brands can access AI-powered video production tools that were once only available to brands with big production budgets."

"At Kellanova, Generative AI is not just a tool; it's a catalyst for transformational growth. By harnessing its capabilities, we are creating personalized, engaging, and efficient marketing plans. As we move forward, those who embrace and adapt to this technological shift will undoubtedly lead in delivering exceptional consumer experiences. The future of marketing is here, and it's powered by generative AI."
– Charisse Hughes, Chief Growth Officer, Kellanova

Prediction 2: Responsible AI will be more critical than ever before

Responsible use of data and AI have been a priority for CPGs, but we can expect it to take center stage in 2025 as brands rely more on digital systems and store vast amounts of data online. Additionally, companies must prepare for potential penalties related to consumer data privacy violations and worse…data breaches. Those collecting data must be transparent about consumer data usage and prepare to uphold AI and data privacy regulations.

"At Kellanova, we have a cross-functional AI Council with business representation that reviews and assesses all AI initiatives within our risk management framework. Maintaining this steadfast commitment to responsible AI, data privacy, and compliance is non-negotiable, particularly in this data-centric era. It is critical to consider 'should we do it, not just can we do it' so our brands remain trusted, and our consumers remain loyal."

"Education is key with new and emerging technologies so we are taking our people along the journey with us, with guidance, principles and training around our approach to AI, because we believe companies with strong guardrails around AI will win in 2025 and beyond." – Ramesh Kollepara, Chief Technology Officer, Kellanova

Prediction 3: Tech-savvy Gen Z and Gen Alpha will reshape how brands engage

In recent years, consumer behavior has undergone a seismic shift, primarily driven by the technological prowess and unique preferences of younger generations—specifically Gen Z (born between 1997 and 2012) and Gen Alpha (born 2013 onwards). As these groups become more influential consumers, their expectations and habits are forcing CPG brands to rethink strategies for engagement and outreach.

"It's critical for brands to take a digital-first approach as the Gen Z and Gen Alpha are digital natives having grown up in an era where technology is deeply rooted in everyday life. Their comfort with social media, e-commerce, and digital communication sets them apart from previous generations."

"With the help of our extensive databases that use AI, we recently launched a digital twin of our consumer to help us predict their behaviors and help us drive personalized experiences. Additionally, our beloved Pringles mascot, Mr. P, now has an AI-powered persona that enables him to communicate through his bowtie-shaped speech bubbles, interacting with consumers and providing real-time answers to questions. The collection of 1P data allows us to drive engagement and loyalty." – David Pearson, Senior Director, Global Brands, Kellanova

Prediction 4: Trusted data and traceability will drive agility and scale

Organizations will prioritize trusted data, traceability and solid foundations to drive agility, scale and real-time usability - crucial ingredients to making informed data-driven decisions. This will allow CPGs to capitalize on vast amounts of data alongside maturing generative AI technologies to develop both leading consumer-facing use cases to drive growth and internal opportunities to generate operational efficiencies. Those who leverage connected, high-quality, trusted data to support their decision making will gain a strategic edge in the market.

"We use data and insights to unlock value whether that's through how we connect with our customers and consumers in a more meaningful way or through our ways of working. Ensuring the quality and traceability of our data through our Better Data, Bigger Possibilities Framework builds consumer confidence, while fostering stronger relationships and loyalty through transparent and reliable brand interactions." – Loretta Franks, Chief Data & Analytics Officer, Kellanova

Prediction 5: Collaborations and partnerships will be more prevalent

In an era where traditional marketing strategies are losing their edge, CPGs must find unconventional ways to connect with the ever-evolving consumer landscape.

"When a brand tightly defines its strategy, including core values, personality, and the consumer they're trying to reach, consumer passion points and culture become deeply connected to strategic imperatives. As a result, culture influences how brands envision future growth with consumers, how they brief their agencies, how they plan their annual calendars, and even how they structure their teams. In many ways, it's about returning to the basics and truly focusing on the consumer.

By leveraging new and diverse types of data—particularly through advancements like data clean rooms and retail media capabilities across marketing specializations—we gain deeper insights into the consumer and what resonates most with them. These innovations not only enhance our understanding but also empower us to collaborate more effectively with partners, unlock richer insights, and create more impactful, culturally relevant connections with consumers." – David Lee, Sr. Director, Global Licensing & Cultural Marketing, Kellanova

Kellanova recently launched a global Pringles x Crocs fashion boot, which was massively successful for our brand strategy across regions and capitalized on specific cultural trends relevant to our consumers, informed by data. The designs were rooted in haute fashion, showcasing the brand's values and personality.

Conclusion

Technology is no longer just the domain of the IT team; it's a core part of every aspect of the business. In today's interconnected world, success often hinges on the ability of various departments—marketing, finance, operations, and customer service, to name a few—to work together with IT to deliver seamless experiences for consumers.

Here's to a prosperous 2025, where technology will unlock more potential than we could have imagined a decade ago.

SOURCE Kellanova