2020 was a pretty good year for the consumer packaged goods (CPG) industry. Data from research firm IRI and Boston Consulting Group revealed that the total CPG industry grew roughly 10.4 percent last year, significantly outpacing the prior three-year compound annual growth rate (CAGR) of 1.8 percent. The spike is attributed to COVID-related shifts in consumer shopping and consumption behavior.

“As a result of pandemic-driven changes in consumer habits, many CPG companies now face the difficult task of predicting how those habits will continue to evolve as consumers adjust to the new normal,” says Dr. Krishnakumar S. Davey, president of strategic analytics for IRI.

Pandemic-related consumer shopping trends can be organized into three categories of trajectories to be expected in 2021. The report identified one-time COVID-19 impacts that will cease as social distancing and stay-at-home orders are lifted, accelerating trends that grew more rapidly during 2020 and new trends that emerged as a result of the pandemic.

One-time COVID-19 impacts include in-home versus away-from-home consumption. On-the-go and on-premise spending will regain share as consumer mobility increases and they scale back on in-home consumption. The report also highlighted new product discovery. In-store product discovery that slowed in 2020 as shoppers focused on getting in and out of the store quickly due to COVID-19 concerns will return in 2021.

The report also highlighted accelerated trends, such as ecommerce channel penetration as retailers further invested in online platforms; an increased premiumization via large CPG innovation and hyper-targeted small CPGs, and continued development of small and own brands at multiple price points; the continuation of self-care, societal care, convenience and indulgence trends well into 2021; elevated price levels compared to prior years will likely remain as inflation takes hold; and growth in retail media as retailers continue to invest in targeted offers and monetize their online properties with digital media platforms, even as they try to cover the increased costs of omni channel fulfillment.

New trends spurred by the pandemic include “right-sized” packaging—smaller, single-serve, multipack, etc.—as consumers revert to pre-pandemic consumption patterns; a rebounding convenience channel as mobility increases, and an improvement in assortment and variety as retailers compete to retain shoppers and meet emerging needs in-store and online.

“2020 was a year unlike any other in consumer products, and the short-term outlook for 2021 is still very unclear for most CPG companies,” says Peri Edelstein, managing director and partner at Boston Consulting Group. “However, we do see COVID as a clear tipping point in the impact of digital in CPG—ecommerce penetration and digital consumer engagement will continue to accelerate in importance.”