The race is on for Consumer Packaged Goods (CPG) companies to survive and thrive in 2025. According to recent research, the most significant challenges cited by executives this year are increased competition for shoppers (69 percent), decreased consumer spending (64 percent) and increased pressure from retailers (57 percent).¹

Yet, with Generative AI (Gen AI) alone expected to deliver an additional USD 160-270 Billion annually in profit (measured in EBITDA) for CPG companies globally, a definitive opportunity exists to innovate, integrate technologies and rise to the occasion.²

In an industry where consumers still hold the power, 2025 will see CPG leaders accelerate the adoption of transformative digital tools, unlock deeper levels of personalization and embrace new business models. In doing so, the CPG industry will seek to become more empathetic, understanding and responding to the emotional needs of customers.

Here, we explore five trends defining how the CPG industry will evolve in 2025.

1. Hyperpersonalization

According to Forbes, 81 percent of customers prefer companies that offer personalized experiences.³ In 2025, innovative CPG firms will go beyond traditional personalization, leveraging AI to deliver engagement that meets deeper personal and emotional needs. By combining next-generation data analytics with emerging technologies, they will unlock new possibilities for truly empathetic engagement.

The rise of hyperpersonalized nutrition is a prime example, with the global personalized nutrition and supplements market predicted to grow at a compound annual growth rate of 14.6 percent from 2025 to 2030.⁴ Advancements in data analytics and biotechnology are now allowing companies to harness individual health data like never before. Bioniq, for instance, offers personalized supplements based on blood biomarkers, with its data-driven approach fueling significant growth across key markets.

In the beauty space, SmartSKN Labs lets customers create a hyperpersonalized line of skin care products, with an AI-powered device analyzing skin at a microscopic level.⁵ Similarly, Prose leverages AI and extensive data analysis to generate over 15 million possible skin and haircare formulas tailored to individual needs.⁶

2. Next-generation Supply Chains

For leading CPG companies, AI is already enabling them to improve how they select the right suppliers and manage risks, maintain effective supplier relationships and bolster supply chain resilience through cutting-edge inventory management. In 2025, this management will evolve from predictive to prescriptive – enabling firms to foresee potential issues and proactively resolve them.

Unilever exemplifies this evolution. Its Tinsukia site in India harnesses AI for more than 50 initiatives across the end-to-end supply chain, including an AI-enabled digital planning system that links production directly to consumer feedback.⁷

CPG ecosystems equipped with end-to-end information in real-time can flex seamlessly in response, with state-of-the-art drone and robotics technologies avoiding disruption and ensuring consumer demand can be met.⁸ With 85 percent of high-performing companies planning to invest in collecting more detailed data from their supply chains, versus only 60 percent of all companies, precision will be a defining feature of the year ahead.⁹

This innovation will become more consumer-facing, with brands harnessing emerging technologies like blockchain to offer transparency, build trust and engage customers in all-new ways. Ulé, a French beauty brand founded by Shiseido, is leading the way, creating a digital product passport for its latest serum, which offers a transparent view of the product's lifecycle, ingredients and manufacturing.¹⁰ Developed in collaboration with web3 solutions provider Arianee, the passport integrates blockchain, ensuring uniqueness and non-transferability, enhancing product authenticity and customer trust.

3. AI-powered Product Development

For many, 2025 will be the year that initial Gen AI experimentation evolves into enterprise-wide integration, ushering in a new era of productivity and creativity. In the world of CPG, nowhere will this prove more transformative than in product development.

Integrating AI across the end-to-end product development life cycle can empower people to create in all new ways, from research and development to refinement and testing. One leading beverage company, according to McKinsey, reduced time-to-market for new products by 60 percent using Gen AI prompts.¹¹

Use cases are transformative and wide-ranging, from empowering designers with new prompts, ideas and experiences at speed to testing with customers rapidly and iteratively. Colgate is one case in point, creating Gen AI-powered digital twins of consumers to respond to potential products, speeding up the innovation process.¹²

Looking ahead to 2025, AI will play an even more explorative role. One fragrance brand, for instance, has been experimenting with AI-generated fragrances,¹³ while we’ve seen other AI tools launched capable of identifying new candidates for material innovation that have not yet been conceived of.¹⁴

4. Direct-to-Collaborator Era

The last few years have witnessed many leading CPG companies grow their Direct-to-Consumer (D2C) channels, pivoting to models that allow for greater control over brand narratives and customer data and enable new levels of engagement. Success in this space has relied on intimate customer insights and foresight delivered by next-generation analytics platforms.

In 2025, D2C will evolve further – as brands embrace a Direct-to-Collaborator model, inviting consumers to co-create and co-design products. Enabled by agile development and demand forecasting, this approach re-defines consumer relationships. Diageo’s Johnnie Walker, for example, launched a Gen AI-powered bottle personalization experience, allowing customers to co-design their own bottles.¹⁵

Co-creation like this not only differentiates platforms but unlocks innovation through deeper consumer involvement. With 79 percent of CPG executives planning to invest in more digital channels and platforms in 2025, expect the Direct-to-Collaborator era to emerge rapidly.¹⁶

5. Purposeful Packaging

As CPG brands fight for consumer attention, 2025 will see a heightened focus on packaging innovation. Companies will utilize Quick Response (QR) codes and Near Field Communication (NFC) to offer experiences that enhance customers’ lives and promote purposeful change.

Leading CPG companies are already harnessing these technologies to offer new levels of information to consumers. For instance, How2Recycle’s Recycle Check label provides shoppers with real-time local recycling and disposal instructions across the US, with Danone partnering with the non-profit for a nationwide rollout across some of its products.¹⁷

But now, experimentation is becoming increasingly immersive and purposeful. Tetra Pak, for example, has recently implemented on-pack communications that lead consumers to a series of web-based games designed to educate on sustainability initiatives.¹⁸

Nestlé, meanwhile, has integrated scannable codes into packaging for its SMA baby formula, designed to help visually impaired customers seamlessly access the information they need and get answers to their queries at speed.¹⁹

Orchestrating the Future of CPG

As digital transformation and AI accelerate, CPG organizations will be empowered in new ways in 2025. But harnessing these trends is challenging. Realizing the potential requires more than experimentation – it demands decisive action, good decisions and investment supported by the right infrastructure, talent and partnerships.

In this era of radical re-invention, success in the CPG sector will come from orchestrating many capabilities – all moving in sync to deliver lasting value.

Explore how forward-looking CPG organizations are navigating change through strategy, technology and innovation.

Disclaimer: WNS has sourced the data from various publicly available websites. WNS is not responsible for the content or accuracy of any linked sites.

References

1. Consumer Products Report 2025: Reclaiming Relevance in the Gen AI Era | Bain & Company

2. What It Takes to Rewire a CPG Company to Outcompete in Digital and AI | McKinsey & Company

3. The Personalized Customer Experience: Customers Want You to Know Them | Forbes

4. Personalized Nutrition and Supplements Market Report | Grand View Research

5. Skincare with AI-powered Customization and On-Demand Manufacturing | PR Newswire

6. Prose, Global Leader in Personalization, Unveils Its AI-Powered Beautytech Platform | Cision

7. Five Ways Unilever’s New Lighthouse Site Applies AI for Impact | Unilever

8. Warehouse Operations Revolutionised with Drones | MHW Magazine

9. 2025 Consumer Products Industry Outlook | Deloitte

10. Shiseido’s Ulé is Among the First Beauty Brands to Launch Digital Product Passports | Glossy

11. Fortune or Fiction? The Real Value of a Digital and AI Transformation in CPG | McKinsey & Company

12. Toothpaste Maker Colgate Testing New Product Ideas on ‘Digital Twins’ | Reuters

13. I Tried Oriflame’s AI-Generated Fragrances | T3

14. AI is Transforming the Search for New Materials That Can Help Create the Technologies of the Future | The Conversation

15. Diageo Unveils Its First Bottle Personalisation Experience, Fuelled by Generative AI | Diageo

16. 2025 Consumer Products Industry Outlook | Deloitte

17. Danone Chooses Cartons for Initial How2Recycle Plus Rollout | Packaging Dive

18. Connected Packaging Campaign Links Tetra Pak Consumers to Sustainability Games | Packaging Europe

19. Breaking Down Feeding Barriers: SMA Nutrition Incorporates NaviLens Technology Across All Barriers | Nestle