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Ian Ellington, CMO At PepsiCo Europe, On His Consumer Predictions for 2023

By Robert McHugh
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There’s no doubt about it – the past 12 months have seen major upheavals and changes in the world economy, and retailers and consumer goods brands have been far from immune.

The rise in inflation, the tepid economy, the war in Ukraine and its knock-on effects on supply chains have all converged to create a very unpredictable trading environment for supermarkets. Furthermore, there has been a total societal shift in the way that consumers engage and interact with brands.

Consumers are not just satisfied to hear about what brands are selling any more. Corporate responsibility and sustainability are more important to some consumers than the price of items on the shelf.

PepsiCo Europe

With this in mind, ESM spoke to Ian Ellington, CMO at PepsiCo Europe, about his predictions for consumer behaviour in 2023.

Ellington has been of CMO PepsiCo Europe since March 2019 and has worked for the consumer goods giant for over ten years.

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In its revenue report for the last quarter, PepsiCo noted that it expects inflationary pressures to persist in 2023. Even though it sees resilient consumer demand, the company still noted that it was keeping an eye out for a shift in consumer spending. What kind of a shift might this entail?

We are living in turbulent times, which makes it more difficult to predict how people will choose to spend their money. The pandemic showed us how the habits and needs of consumers can change overnight – companies and brands need to remain vigilant to this.

At PepsiCo, we are consumer obsessed, and we don’t just want to be responding to consumer needs – we want to be predicting, developing and delivering the best flavours and products.

Across Europe, many of our large brands delivered impressive net revenue growth for the fourth quarter and full year, showing that customers are choosing brands they rely on and trust.

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PepsiCo has announced a new packaging goal that aims to see the company double the percentage of all beverage servings delivered through reusable models, from 10% to 20%, by 2030. Do sustainability solutions and environmental pledges from companies shift the choices that the average consumer makes?

It’s the businesses that change their own behaviour who will change the behaviour of consumers. At PepsiCo, we know that a more sustainable food system means better outcomes for people and the planet. We have accelerated our efforts to help make the food system more sustainable, regenerative and inclusive.

From how we source ingredients [and] make and sell our products in a more sustainable way to how we inspire consumers through our iconic brands to make better choices, we are embracing our role as a leader among our peers and in our communities.

We feel we have a responsibility to help the consumer to make better choices, and we hope that our climate targets, such as our new packaging goal, help the consumer to think and buy more sustainably.

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What’s more, we know that our consumers are looking for ways to make more sustainable choices.

According to research from Deloitte, some 64% of consumers in the UK have limited their consumption of single-use plastic in the past 12 months, and 34% of respondents said they had stopped purchasing brands because of ethical or sustainability-related concerns about them.

These are clear signals that consumers are increasingly holding brands to account, and the FMCG world must commit to working in a way that’s ethical, responsible, and that inspires positive change if we want to win their loyalty.

Last July, PepsiCo, Inc. raised its full-year revenue forecast, as consumers bought more sodas and snacks, even in the face of rising prices. This was an interesting anomaly. What was behind it?

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Last year, consumers were navigating the cost-of-living crisis and their way out of the COVID-19 pandemic, leaving many of us seeking comfort and choosing to spend more time at home.

People are increasingly looking for little moments of joy – affordable and accessible – as they welcome relief from stress in their work or personal lives by socialising with those who are important to them, as well as experiencing new things again. That’s something they find in the brands they love.

It all adds up to a growing trend of people making time spent at home feel like more of an occasion. For consumer brands to thrive in the future, they need to be there, too.

When nights out are off the menu, our campaigns and products need to own these moments, letting people connect with each other and enjoy themselves.

What will be one big change that will occur in consumer behaviour this year that may not be immediately obvious, do you think?

An interesting trend we’re seeing in consumer behaviour is how we choose and enjoy our flavours, as well as our products.

Consumers are looking for textures, ingredients and flavours that are authentic to their culture and heritage, and that help them identify with what they are eating. Consumers are willing to experiment more than ever. They like their traditional and loved products, but they are always checking the shelves for innovation to incorporate into their repertoires.

We’ve also seen wellness emerge as a key trend for the consumer. Reduced stress, better sleep, [and] calming and improved mood are all very beneficial to our consumers across all markets, and the desire for functional benefits continues to rise.

For example, people are looking to beverages to help soothe their frayed nerves and are turning towards relaxing ingredients, such as lavender, chamomile and lemon.

In our product portfolio, we have also introduced more functional ingredients into our products.

What is the best way for brands and supermarkets to engage with the average European consumer in 2023?

Right now, shoppers are seeking value beyond price. The guarantee of familiar, delicious flavours, fizzes and crunches is what keeps consumers coming back for more, but, in the future, great taste on its own won’t continue to cut it – brands need to be better, in every way possible.

People want more for their money, whether that’s a unique experience in store, a limited-edition must-have that creates a buzz, or a benefit they simply can’t find elsewhere, and, as we all know, consumers are looking for healthier products.

As part of PepsiCo’s sustainability commitments, our experts are reformulating products to provide consumers with more positive choices that are lower in saturated fats, salt and sugar, kinder to the planet, and never compromise on taste.

As we look to the future, there’s no doubt in my mind that connecting with consumers’ emotions as well as their taste buds, shopping habits and health wishes will prove ever-more important.

In a fragile world, great brands provide predictability and comfort – and after the past few years, I’m sure we could all do with a little more of both.

© 2023 European Supermarket Magazine – your source for the latest A-brand news. Article by Robert McHugh. Click subscribe to sign up to ESM: European Supermarket Magazine.

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