Increased demand for consumer packaged goods in emerging markets

There a “substantially increased demand” for more sophisticated logistics services to cater for growing demand for consumer packaged goods (CPG) in emerging markets, including Africa, according the Global Contract Logistics 2015 report released this week by Transport Intelligence (Ti).

“The CPG sector is one of the largest customers for contract logistics. With estimated revenues of over half a billion it is a global business that can make unique demands on logistics services,” said author of the report and Ti senior analyst, Thomas Cullen.
He commented that growth of CPG in emerging markets was a major opportunity for those with the capital to acquire large and complex distribution centres.

The report shows that the CPG sector is relatively stable in the developed world but that changing channels of consumption are providing scope for new service offerings and solutions to be implemented.

These were some of the key findings of the report:

• Markets in the emerging economies have much higher cost bases - possibly twice that of the United States.
• There is a perception that the CPG sector in developed economies offers little growth, however some companies continue to grow at pace.
• Not all emerging economies have the same market needs.
• One obstacle to growth of CPG in emerging markets is the poor efficiency of logistics. Transport is often expensive and high quality warehousing can be scarce.