If the global consumer packaged goods (CPG) market wasn’t explosive enough, experts believe that ongoing technological advancement will likely spark a manufacturing renaissance in the months and years ahead. In the face of economic uncertainty, demand shifts and changing consumer expectations, brands looking to stay competitive will need to up their technology game to effectively produce, scale and innovate.
Unlock the insights shaping tomorrow’s winning CPG brands.
What is CPG manufacturing?
The CPG manufacturing space comprises a variety of processes, systems and resources used to produce consumer packaged goods at scale. While many of us think of CPG manufacturing as something that takes place exclusively in factories, these protocols also involve extensive formulation, compliance, automation and logistics efforts that extend far beyond the four walls of a factory or warehouse.
Effective CPG manufacturing approaches must factor in a number of different variables, such as customer demand, actual production costs, sustainability and more. Brands that fail to take a holistic approach to their manufacturing processes may inadvertently undermine their own missions and negatively impact their sales and CPG revenue.
Key forces shaping CPG manufacturing today
As with all industries CPG manufacturing protocols are heavily influenced by larger vertical shifts and overarching trends. Here are some of the forces currently shaping the CPG manufacturing landscape:
- Ongoing inflation and supply chain challenges
- Rapid advancements in AI and CPG integrations
- Increased consumer demand for sustainable and ethically-sourced goods
- Growing consumer interest in personalized and premium product formats
- Government regulations and global compliance requirements
All of these factors have reshaped CPG manufacturing and directly impacted how CPG brands develop, create and distribute their products. Critically, manufacturing protocols have needed to constantly evolve alongside brands and consumers in order to meet stringent regulatory standards and customer expectations.
What impacts CPG manufacturing costs?
Many of the factors mentioned above affect CPG manufacturing costs, but there are other variables in play as well. Some of the major cost influencers in this space include:
- Ingredient/raw material pricing
- Labor availability and costs
- Packaging development and optimization
- Regulatory testing and compliance
- Transportation and logistics expenses (such as fuel costs)
- Facility overhead (i.e. real estate prices, energy costs and other utility-related expenses)
- Investment in technological innovation and manufacturing upgrades
Herein lies the challenge of effective CPG cost management: Brands must invest in tools and resources that align with consumer demand while weathering supply chain issues and other out-of-pocket costs. Innovation can be expensive, so smart CPG manufacturing must balance advancement with overhead to ensure they stay afloat in the face of widespread market disruption and uncertainty.
What technologies support modern CPG manufacturing?
Today’s most competitive CPG manufacturers are savvy about how they leverage integrated tools and automation with existing cost-effective practices. Some technology solutions empowering brands to work smarter, not harder include:
- Robotics and automated assembly lines
- AI-powered consumer intelligence platforms for demand forecasting
- “Digital twins” for streamlined research and development
- Smart, IoT-enabled machinery for real-time monitoring and predictive maintenance
These are just a few examples of tools that can help streamline production, reduce waste and enhance performance. While some of these solutions require a significant upfront investment, many brands find that these innovations wind up saving them in the long run.
Keep in mind that manufacturing technology isn’t just on the assembly line. Artificial intelligence and data analytics tools play critical roles in ensuring manufacturing procedures are safe, effective and cost-efficient while requiring less human intervention and oversight. These data points can even help brands make more informed decisions about what kinds of actual equipment are worth the time and expense.
Sustainability and responsible production practices
Sustainability is rapidly emerging as one of the most consequential factors influencing consumers’ purchasing decisions. In a recent study, 47% of respondents reported having purchased a sustainable product within the previous month, and many of these consumers were willing to pay a premium for these purchases.
While moving towards sustainability can pose a number of immediate cost management challenges, the fact that consumers are willing to pay nearly 10% more for sustainable goods should be cause for ample consideration. CPG brands that invest in sustainable manufacturing protocols and invest in eco-friendly packaging and other components may see a significant return over time and enjoy a boost in public perception to boot.
Workforce readiness and skill development
Much has been said about how automation stands to impact labor markets, and for good reason. Yes, automation can change the way manufacturing processes unfold, but it can also revolutionize the role human workers play in production.
There’s a sort of double-edged sword here: On the one hand, automation can alleviate some strain on human workers and enhance employee safety. On the other hand, some advanced tech tools need experienced human workers to operate them. As a result, CPG manufacturers may need to reevaluate their hiring and training protocols to ensure they’re attracting and retaining workers with the appropriate skillsets.
As this shift continues to unfold, training investments will become an even more integral component of CPG finance planning, as will recruitment efforts targeting tech-savvy workers. Across the board, technological advancements are shaking up the kinds of roles available in CPG manufacturing spaces and raising questions about which skills and backgrounds are most relevant in these work environments.
Supply chain integration and collaboration
In light of ongoing supply chain challenges, successful modern CPG manufacturing often relies heavily on upstream and downstream partnerships. Some of the most resilient CPG supply chain models are those that prioritize:
- Dual or diversified sourcing: Having multiple sources on the table can provide a valuable failsafe in the event of a supply chain disruption.
- Transparent communication: Open and honest discussion between retailers, suppliers and manufacturers can help safeguard relationships and identify areas for collaboration and compromise.
- Real-time inventory visibility: Technology tools can help streamline inventory processes and ensure records are as up to date as possible. This kind of real-time tracking helps close gaps in the sourcing and production processes and prevents delayed distribution to consumers.
- Risk mitigation planning: It’s generally not a good policy to wait until you hit a supply chain snag before taking action. Proactive risk mitigation planning can help to ensure no time is wasted between the time a problem is identified and when it is addressed.
- Scenario forecasting and modeling: Artificial intelligence and other technology tools can prove invaluable in terms of forecasting potential supply chain disruptions and modeling potential resolutions.
Well-integrated procedures can enable teams to make faster decisions when it matters most. This sort of swift, data-driven action can subsequently streamline production and mitigate disruptions that would otherwise impact CPG sales, CPG ecommerce initiatives, CPG marketing practices and more.
Innovation and product development cycles
Speed-to-market is now a major differentiator in a whirlwind market. In order to stay one step ahead of CPG trends, CPG brand marketing strategies must strive for shorter innovation cycles grounded in real consumer insights. By continuously gathering information about what’s driving consumer behaviors and adjusting course accordingly, CPG brands can ensure they throw the majority of their weight behind the manufacturing and distribution of products that will deliver strong returns.
Ongoing, responsive innovation can also help reduce product failure rates by ensuring new offerings are aligned with the latest consumer expectations. This subsequently enables CPG marketing teams to invest with greater confidence in their roll-outs to further maximize ROI. Many CPG manufacturers have even leveraged technology and research to support their M & A efforts and zero in on investments that are most likely to prove successful.
Improving CPG manufacturing with Tastewise data
Tastewise gives CPG teams the real-time CPG insights they need to make smarter, data-backed manufacturing decisions. With Tastewise, CPG manufacturers can easily leverage artificial intelligence data to more reliably:
- Forecast consumer demand
- Stay one step ahead of emerging trends in products and production alike
- Mitigate risks associated with innovation and product launches
- Prioritize and retire SKUs in accordance with real-world performance signals
- Enhance decision-making protocols throughout multiple points in the production process
With accurate data guiding their strategy, manufacturers can more confidently and effectively scale operations while maximizing the value of their production and distribution. Armed with the most reliable, up-to-date information available to them, CPG manufacturers can both predict and respond to market-wide shifts and deliver more favorable brand experiences to loyal consumers.
Final thoughts
CPG manufacturing is rapidly advancing, making it more crucial than ever for CPG teams to collaborate, investigate and elevate their standard approaches. Thanks to recent shifts in data-collection and analysis, CPG manufacturers have nearly limitless opportunities for leveraging information to their benefit – provided they have the tools they need to get the job done.
With Tastewise, brands can easily access and interpret key data points to help them make more informed decisions about their manufacturing needs and initiatives. Tastewise data empowers CPG brands to put their full faith in their consumers and trust their needs to drive their production, marketing and distribution efforts. In 2026, the brands most likely to come out on top are those who ride the wave rather than resisting progress by taking advantage of all that AI technology has to offer.
FAQs about CPG manufacturing
A CPG manufacturer broadly refers to a company that produces packaged goods like food, beverages, household items and other products for consumer markets.
CPG refers broadly to consumer packaged goods, while FMCG (fast-moving consumer goods) describes high-volume, quickly replenished items like snacks or beverages. Put more simply, FMCG falls under the larger CPG category and refers to specific classes of products intended for consumer markets.
CPG refers to the industry category itself (i.e. packaged goods for consumption at scale), while manufacturing refers to the actual process by which those goods are produced. CPG brands employ various manufacturing approaches to turn raw materials into the finished products that end up on store shelves and in industrial kitchens.
