In retail merchandising, everything happens on the shelf. It’s the stage where consumer packaged goods (CPG) show off their wares, competing for attention, sales, and brand awareness. But how do shops pick what things to carry and where to stock them? The answer, as is so frequently the case, can be found in data. Retailers can remain ahead of the competition by using analytics to discover the fastest-growing CPG categories. It’s one of the most effective techniques to boost sales and earnings.

Data-driven insights are a potent weapon in the armory of any retailer. They help decide which products to prioritize and where to put valuable store space. So, which CPG categories are currently sweeping the retail world by storm?

These emerging industries are capturing a sizable market share. With new product introductions that appeal to these expanding segments, even major companies are gaining popularity. Here are some of the most rapidly rising CPG categories year on year.

1. Functional beverages

Functional beverages go beyond quenching thirst. They offer additional benefits like energy boosts, hydration support, or even improving gut health. Regarding the latter, you may have heard of the kombucha trend, which took the wellness world by storm. Protein shakes are still the go-to for muscle recovery, and energy drinks provide that extra burst of motivation during a long day. There are also vitamin-infused waters for overall wellness.

One possible strategy retailers could consider is allocating shelf space to innovative offerings from companies like PepsiCo. The beverage giant recently launched a line of functional drinks called ‘Driftwell.’ It claims to help people relax and get an improved night’s sleep. This is also a relevant example of a brand aligning with current public interests by creating a product that can compete with other drinks in the category.

These are the types of beverages that appeal to a wide audience of consumers who desire more than flavor from their drinks.

2. Health and wellness products

Health and wellness is a vast industry that targets more than just one type of customer. There’s an array of nutritional supplements, workout gear, relaxation aids, and more. Retailers can stock their shelves with items relevant to those looking for an improvement in their overall health. Even shoppers whose goal is simply to maintain a balanced lifestyle are becoming privy to the health products available today.

One key demographic is the active, fitness-focused consumer. These shoppers are interested in items like protein powders, vitamins, and sports accessories. All of these products are designed to support their athletic pursuits. On the other hand, some consumers concentrate on stress relief and relaxation techniques. Think yoga mats, essential oils, and meditation resources. Both demographics are spending money in the health and wellness-focused categories.

3. Natural personal care products

The natural route is a popular choice for those interested in clean beauty solutions. This category encompasses earth-friendly skincare, haircare, and cosmetic products made with natural ingredients. The consumers who buy these products usually want to move away from mainstream products that they view as harsh on the body and harmful to the environment.

Natural personal care products fix those problems since the products are promoted as gentle on the skin and the environment. Brands like Burt’s Bees and Dr. Bronner’s are popular among these shoppers, a testament to this trend.

4. Organic food

Another popular category is organic food which offers consumers chemical-free alternatives. They are often packed with higher nutrient content than their conventional counterparts and contain fewer pesticides. These products range from fresh produce to packaged goods like pasta sauces and cereals. The organic food market spans several categories within the CPG industry.

Retailers can attract eco-conscious shoppers who focus on sustainable and clean farming practices. Additionally, those with dietary restrictions, allergies, or health-conscious shoppers may gravitate toward them.

5. Plant-based products

The plant-based movement is unstoppable as more consumers are embracing a plant-forward lifestyle. As a result, the demand for plant-based products has skyrocketed. Retailers who recognize this growing trend can capitalize on it by offering a diverse range of products. 

Read Also: What is The Fastest Growing E-commerce Market?

These include a selection of meat substitutes, dairy alternatives, vegan skincare, and more. Plant-based products cater to vegetarians, vegans, and anyone looking to reduce their consumption of animal products. Closely monitor industry trends and stay current with brands like Beyond Meat, Impossible Foods, and Daiya Foods, and cosmetics brands like Thrive Causemetics and The Ordinary. These frontrunners can show you how to stay ahead of the curve and secure market share in this rapidly expanding category.

6. Private-label brands

Private-label brands are no longer synonymous with low-quality, generic options. Today, you can find countless high-quality private-label products at competitive prices. They give consumers an alternative choice to name-brand items for a more affordable price. All without sacrificing quality. 

Retailers such as Trader Joe’s and Costco have successfully leveraged private-label brands. They’ve added them to their portfolios to attract budget-conscious shoppers. Even so, they still maintain a reputation for quality.

Private-label alternatives can be offered across various product categories. Retailers can provide customers with cheap options, from food staples to personal care items. This strategy encourages customer loyalty. But it also helps retailers differentiate themselves from competitors in a crowded market.

We’ve explored the fastest-growing CPG categories, but you might wonder why they’re outpacing others. Here is an overview of the factors contributing to this impressive growth.

Increasing consumer awareness and interest in health and wellness

We live in a hectic world, leading people to become more proactive about caring for their physical and mental well-being. This self-care movement has people turning to consumer goods that support their wellness journeys.

As social media influencers and health experts continue to promote the importance of self-care, Gen Z and millennial shoppers are driving the demand for wellness-focused products. It’s a trend that’s unlikely to slow down anytime soon.

Rise in sustainable and ethical consumerism

Sustainability is no longer a buzzword – it’s become a guiding principle for many consumers. In the past decades, the awareness about climate change and environmental issues has only increased. Now, shoppers are seeking out products that align with their values. They look for CPG companies with ethical supply chains, eco-friendly packaging, and a low environmental impact.

Gen-Z is especially passionate about sustainability and ethical shopping. A recent study found that 73% of Gen-Z consumers would be willing to pay more for sustainable and ethical products. 

Organic foods, personal care items, and private labels all fit into this sustainability category. Embrace ethical consumerism to attract new customers and build trust with existing ones. Many customers appreciate companies that prioritize social responsibility.

Shifting dietary preferences

Consumer diets have evolved significantly over the past few years. Many people now follow specific eating plans or dietary restrictions. There’s gluten-free, keto, plant-based, and the list goes on. In turn, this diet influences the types of products they buy. 

Instead of focusing only on these products, it’s best to offer them alongside regular options. You can then position yourself as a one-stop shop for customers seeking specialty items. At the same time, you can continue serving those who prefer more traditional food options. It’s a masterclass in providing a superior customer experience. 

Advancements in technology and manufacturing

The era of lab-grown meats and 3D-printed snacks may soon be upon us as advancements in technology and manufacturing are paving the way for innovative product development. As time goes on, these technologies are becoming more accessible and affordable. We’ll see companies creating groundbreaking products that customers never thought possible.

These new, cutting-edge products do wonders to pique consumer interest. Some may be novelty items that are only interesting the first time. Yet, if used properly, they can be a great way to stand out from the competition and boost sales.

Rising costs of goods

The constant fear of recession post-pandemic has people clutching their wallets a bit tighter. The unstable costs of living and economic conditions are turning consumers more budget-conscious, even when shopping for everyday essentials. This has led to a surge in demand for private-label CPG brands offering competitive products. 

Retailers who invest in their private label portfolios can attract price-sensitive shoppers. Private labels have become a popular choice for many consumers. And since the products are branded under the retailer’s name, customers will return for more. It’s crucial to ensure your private label offerings are up-to-date and well-stocked.

What Retail Items Are in Demand?

It’s normal to expect profit when you’re establishing an eCommerce business. Selling high-demand products is one of the most effective methods to accomplish this. But, what products are currently in high demand?

While there are hundreds of trendy eCommerce products at any given time, certain product categories have seen significant sales growth. We whittled the selection down to five companies that have seen exceptional eCommerce growth recently.

1. Subscription Food Products

Shoppers love convenience, and the Internet has only increased the amount of convenience people expect for a personalized buying experience. Subscription food products like produce subscription boxes are one example of goods on demand that customers have supported in droves.

Today’s market offers just about every imaginable food or drink in the subscription form. Protein bars, snacks, energy drinks, cookies, and even water are all popular products for a subscription box business. The subscription box industry has been growing by more than 100% year-over-year (YoY) and is now a billion-dollar industry. If you have a great eCommerce marketing strategy, there’s no reason you can’t launch your own box!

Coffee is one of the best products to create a subscription box service with. Spend some time reading how to start a coffee subscription box, and you’ll see how little capital is needed to begin. Some of the best coffee roasters have already gotten a head start. You can even offer a coffee subscription gift and get the word out more quickly with relevant coffee marketing ideas. 

2. Book Storage Equipment (bookcases, bookends, bookshelves)

Being at home more often means you have to make use of what’s already there. As a result, many Americans reorganized their bookshelves or created new spaces for them. 

Bookshelves, bookcases, and bookends are all selling well and usually have high-profit margins. If you add this to your eCommerce or wholesale catalog, make sure to source materials from a reputable supplier. This helps ensure your fill rate will be high and your return rate will be low. The last thing you want is to be left with deadstock on your hands.

3. Household and Car Mats

Spending more time indoors means you notice things more easily. One such example is the mats outside of your front door or inside your car. Without regular cleaning and vacuuming, these mats become grimy, cracked, and rotten. 

You can make a considerable profit if these products match your type of eCommerce store. Millions of Americans continue buying new cars and homes throughout 2023 as they set their sights on new places to live. Listing durable mats for them to buy is an advantageous move. 

4. Mobile Electronics Accessories

If there’s one thing Americans love, it’s their tablets and smartphones. With such frequent tech usage comes the need for accessories, like covers, screen protectors, earbuds, cleaning cloths, and travel cases. 

The global mobile electronics accessories market is expected to reach a staggering $111 billion by 2025, a little over half of which is generated by US consumers. Americans’ love of the latest, greatest tech items combined with a 7% YoY growth rate means this is an excellent niche to be in. This makes mobile electronic accessories a great high-demand product to sell.

5. CBD Products and Oils

CBD oil started taking the health and wellness industry by storm over the last couple of years. While CBD products and derivatives have been around for decades, they only recently surged in popularity due to increased scientific research on their plant sources. 

CBD stands for cannabidiol, which is one of over 100 compounds in the cannabis plant (also called the marijuana plant). Cannabidiol is a non-psychoactive cannabinoid, differentiating it from oft-referenced tetrahydrocannabinol (THC) in the same plant. 

Oils, balms, creams, and other consumables are made with CBD for a multitude of benefits. CBD is known to relieve pain, reduce anxiety, support neurological health, and limit feelings of nausea. If you already sell health and wellness goods, add a few CBD products to your eCommerce catalog today. 

It’s much easier to make serious money online when you sell what customers are interested in. This means determining what products are in high demand right now and what are the most used products in the world.