From the sluggish economy and stubborn unemployment rates to frugal consumers and high commodity prices, there has been endless discussion around the challenges facing CPG marketers during the last few years. The latest research from SymphonyIRI Group’s Times & Trends, “CPG 2011 Year in Review: The Search for Footing in an Evolving Marketplace,” uncovers several trends in everything from new product development and technology to store layouts and consumer shopping patterns. The review predicts also explores economic, channel, department and category performance for 2011, and indicates that manufacturers will continue to innovate, which is their primary private-label mitigation strategy.

“Evolving economic conditions have brought a polarity to the CPG marketplace,” says Susan Viamari, editor, Times & Trends, SymphonyIRI. “There is a sizable consumer segment that is feeling more optimistic about the road ahead, while a similar sized group is expecting a continued deterioration of economic and personal financial health. Among optimistic and pessimistic shoppers alike, all indications point to continued frugality and conservatism in 2012,” she says. “CPG marketers need to actively respond to these trends with products and strategies that really emphasize their understanding of consumers’ most pressing needs and wants in order to drive purchase behavior and loyalty.”

The report also finds that some shoppers are expected to open their wallets more if positive economic reports continue. The private-label sector will continue to have unit sales in the 22-23% range and dollar sales in the 18-20% range. Retailers will increase assortments and retain the tiered product strategies that have worked so well in the past.

Manufacturers and retailers will pass manufacturing price increases onto shoppers, but reaction to potential commodity price deflation is still unclear. When commodity costs began to rise in 2008, much of them were absorbed by cutting other costs and streamlining the supply chain. Running out of efficiencies and sensing the shopper’s ability to pay more, SymphonyIRI expects manufacturers and retailers to become more aggressive about passing costs along to consumers.

“It’s no secret that conservative consumers are embracing a variety of money-saving behaviors, such as making shopping lists before entering a store,” says John McIndoe, senior vice president, Marketing, SymphonyIRI. “Digital media will play an increasingly integral role in the pre-planning process and helping consumers find new ways to save in 2012. Like coupons, the Internet is being leveraged as a list-making tool. Though penetration is much lower versus coupons, we expect it to rapidly and steadily increase this year.”

The findings of the report were compiled based on information from SymphonyIRI InfoScan Reviews, SymphonyIRI Consumer Network, SymphonyIRI AllScan Convenience Store Tracking, SymphonyIRI Shopper Insights Advantage and SymphonyIRI ShopperSights. Download the report.