Quick Commerce and AI Reshape the Future of the CPG Industry

CPG Industry

To meet the changing consumer habits around speed, convenience, and customer satisfaction, Tata Consumer Products is more aggressively pursuing "quick commerce" as a new route to increase its market and thus transforming to a modern market approach, moving beyond the traditional routes to market. During the same period, Mondelez (the owner of Oreo) has utilized AI to increasingly speed up new and innovative product development by reducing backlog and shelf life of the product by four to five times, and achieved a 5.4% sales uplift last quarter. These examples illustrate how AI and digitalization combined are affecting the consumer-packaged goods (CPG) landscape in contrasting ways to inspire quicker innovation, delivery, and performance of the companies.

Based on the chart, the size of the global CPG industry is expected to increase from approximately US$2.2 trillion in 2023 to US$3.4 trillion in 2034, which is an increase of nearly 1.5 times, as the increase is substantial over only ten years. This steady growth reflects the increase in consumer demand, with a rise in the need for better distribution channels. The growth is strong on account of the innovation and variations of digital platforms, improvements in AI capabilities, and changes in consumer behavior, like quick commerce.
 
 Insightful Analysis of the Global Market
 
The global CPG market is already at US$2.21 trillion (2023) and is projected to reach US$3.44 trillion by 2034. North America alone commands roughly US$2 trillion of the global CPG industry.

Tata Consumer’s pivot to quick commerce shows the rapid growth in consumer expectations for near-instant delivery. With rising online grocery adoption (pet products leading at ~36 % ecommerce penetration), instant and last mile fulfilment is becoming a key differentiator. This growth is fueled by consumer demand for quick and convenient delivery with the help of supply chain digitization.

While F&B ecommerce penetration is still below 10 %, penetration in categories such as pet and baby products is already more than 20–36 %. Marketing campaigns that leverage AI produce 30% higher campaign ROI, a 30% uplift in conversions, and 49% improved click-through rates.
 
Key Players Driving the Market Growth

Tata Consumer Products has been investing extensively in quick commerce, putting itself in a leadership position in the space of digital delivery.

Mondelez International uses AI to compress product cycles and increase sales, which turns out to be a great example of efficient innovation.

Unilever and Colgate Palmolive, according to Infosys, are also utilizing generative AI to automate marketing messaging and enhance 'digital shelf' operations. For example, Unilever was able to cut time on content creation by 90%; Colgate improved conversion rates.
 
The changes in the CPG industry are dramatic, due to AI-led innovations, quick commerce, and digital engagement. Leading players like Mondelez and Tata Consumer are reinventing the CPG landscape by setting new standards of speed, personalization, and efficiency. Consumers are increasingly looking for convenience and quick, tech-enabled centered experiences, thus offering the potential for continuous growth in this sector as it is led by smarter ways of working, agile supply chains, and responding to market demand at speed.