5. Trends to Watch

Anticipating catalysts to change in 2025

In this chapter:

GLP-1 effect: Seismic lifestyle shifts
Social commerce & the changing face of omni retail
AI: Evolving around new consumer expectations
Combatting commodity
price uncertainty

Trends to Watch

Anticipating catalysts to change in 2025

Consumers are making conscious and subconscious decisions that address their unmet needs.

From fundamental dietary and lifestyle shifts ignited by the rise of GLP-1 medications to new—and formidable—consumer expectations for AI,
there are multiple key signals to big business impacts to heed in 2025.

Lauren Fernandes

Vice President of Global
Thought Leadership,
Marketing & Communications, NIQ

5

“With the rapid pace of change in what cycles ‘in’ and ‘out’ of trend, companies need to invest in the right data to guide what priorities lie on the horizon. The key to success here is twofold: Act on unmet needs before consumers ask for them, but not before consumers are ready to embrace real change.

Some consumers are kicking the tires on futuristic advancements in artificial intelligence that haven’t yet earned their trust. Meanwhile, millions of others are embracing a full spectrum of life changes surrounding the use of GLP-1 medications.

Anticipate that the road to earning trust can be slow. But those who can earnestly bridge the gaps to inspire behavioral change are most likely to succeed in the long run.”

Trends for Watch

Catalysts to 2025 change, emerging factors faced by key verticals across industries

There are a few specific opportunities we have our eye on now and into the years ahead. These are emerging factors that should be carefully considered when seeking new avenues for growth. While these are certainly just a few of the many factors shifting consumer minds, wallets and actions, they are important ones to explore, leveraging a full view of analytics and assessments to help fend against potential risks or blind spots.

_Immigration

The ethnic profile of consumers are changing as immigration recovers post-covid, bringing risks and opportunities to FMCG products.

_{GLP-1 Ripple Effect}

Assessing the expansive lifestyle and socioeconomic impacts of these popular medications.

_{Hot Commodity Costs}

Analysing the lastest hot and cool commodity prices against measured consumer impact.

New Face of Omni

From the explosive social commerce revolution to the evolution of omni trip types.

_{Readiness for AI}

Assessing consumer expectation around AI and ideal areas for consumer innovation.

Migration recovering post COVID. 31% of the Australia population was born overseas, with India & China the fastest growing countries.

Historically, immigration has been a significant driver of population growth in Australia, accounting for two-thirds of the increase. Today, one-third of Australian residents were born overseas. After a period of border closures, immigration has rebounded strongly, exceeding pre-COVID levels.

The composition of immigration has also shifted over time. Initially concentrated in Europeans and New Zealanders, it diversified in the 2000s and 2010s with increased immigration from China and India. Most recently, post-COVID, India has overtaken China as the main source of new immigrants.

Opportunity exists to adapt to changing consumer landscape by offering the right products

Immigration significantly influences consumer behaviour due to the diverse consumption patterns across different ethnicities. As immigration patterns shift, so do the demands for specific products and brands. For example, the recent surge in South Asian immigration to Australia is likely to benefit certain FMCG categories that over-perform among this demographic. Understanding these nuances is crucial for FMCG companies. By analysing the consumption patterns of various ethnicities, companies can identify opportunities to tailor their product offerings, marketing strategies, and distribution channels to cater to the evolving needs of an increasingly diverse consumer base.

Europe / Americas

Fresh Seafood

Cheese

Butter/Margarine

Coffee

Canned Fish

Cat Food

Africa / Middle East

Lamb

Poultry

Yoghurts

Spreads

Cereal

Coffee

Long-life Milk

Long-life Juice/Cordial

South/Central Asia

Poultry

Chilled Milk

Yoghurts

Sweet Biscuits

Impulse Snacks

Water

Long-life Milk

Rice

Eggs

Oceania

Red Meat

Sausages

Soft Drinks

Sugar Confectionery

Energy/Sports Drinks

Iced Tea

Savoury Biscuits

Dog Food

Southeast Asia

Fresh Seafood

Pork

Impulse Snacks

Water

Long-life Milk

Rice

Eggs

Vitamins

Sun & Skin care

Northeast Asia

Fresh Seafood

Pork

Water

Long-life Milk

Rice

Eggs

Vitamins

Sun & Skin care

Categories more consumed by different ethnic groups in Australia

NEW spending

CPG: conscious snacking, fiber & protein, digestive health, supplements & vitamins, gum & mints.

T&D: wearable devices and smart tech for wellness management

The ripple effect surrounding the rise and impact of GLP-1 drugs

Shifted spending

MORE spent on monthly doses of medications, lifestyle and fitness activities

LESS spent on food excess, Tobacco, Alcohol

Interpersonal impacts

Productivity, longevity, mental health, fertility, menopausal weight management

$1,000 USD / month

Estimated uninsured cost of Ozempic injection in the U.S.

+0.4%

up to 1%

potential boost to U.S. GDP

Societal impacts

New business via global manufacturing opportunities as patents expire in 2026, pending regulartory clearances in more markets.

60%

of global consumers say they’re likely to start or increase vitamin and supplement intake for health support (50% of Australian Consumers)

39%

of Australian consumers say they’re likely to spend more on relaxation and anti-stress

GLP-1 (glucagon-like peptide-1) drugs, such as Ozempic, have become increasingly popular and accessible in recent years. These drugs function as GLP-1 agonists, mimicking the body's natural GLP-1 hormone that regulates appetite and digestion. By controlling blood sugar and reducing appetite, these medications have proven highly effective in treating both diabetes and obesity.

Millions of people in the U.S. are now using GLP-1 drugs, contributing to the first decline in obesity rates in decades. Studies have also shown that these drugs can significantly reduce the risk of heart attack, stroke, and chronic diseases. Ongoing research continues to explore new potential applications for GLP-1s, such as addiction treatments.

The effectiveness of GLP-1 drugs in reducing patient risks has led to increased recommendations from both public and private health systems, as they also contribute to lower healthcare costs. Despite the high cost of GLP-1 injections, the development of generic versions is underway, with some already available in the U.S. and more expected to launch in 2025 and 2026.

Goldman Sachs predicts a significant increase in GLP-1 users in the U.S., potentially tripling to 30 million by 2028 and reaching up to 70 million in an optimistic scenario. This widespread adoption could boost U.S. GDP by 0.4% in the baseline scenario and over 1% in the high-uptake scenario, demonstrating the potential for significant economic impact.

The growing popularity of GLP-1 drugs presents both challenges and opportunities for the FMCG sector, particularly for food and snacking categories. As more consumers adopt healthier lifestyles and seek healthier alternatives, there could be a notable shift in demand away from traditional indulging snacks. This highlights the need for FMCG companies to adapt their product offerings and marketing strategies to align with these evolving consumer preferences.

A looming commodity crisis? Cocoa prices are hot, but wheat and sugar prices have cooled

Consumers and manufacturers need to monitor shifting commodities prices to anticipate and react to peaks and valleys.

Commodity price fluctuations are a significant concern for the FMCG industry, as they can impact production costs, product pricing, and consumer demand.

In April of 2024, cocoa surged to a record high of $12,000+ per metric ton, amid forecasts of shortages and $8.7B in bets in cocoa futures from hedge funds. Unlike wheat prices, which have stabilised due to increased harvests, cocoa prices are expected to remain elevated due to production challenges in West Africa, a major cocoa-producing region.

These challenges, including adverse weather conditions and disease, may take a full growing season to resolve, prolonging the impact on cocoa-dependent categories like chocolate confectionery.

Looking at potential CPG category adjacencies to some of the latest “hot-rising” or “cooling” commodities like Cocoa (+128%) or Wheat (-27%), we can already see some of the impact on NIQ-measured category sales and volumetric performance. For example, volume sales of chocolate are down 24% globally in the latest 12 weeks (ended June 16th 2024 vs year-ago).

Will the cocoa “high” result in cocoa-free CPG?
In April 2024, cocoa surged to a record high of $12,000+ per metric ton, amid forecasts of shortages and $8.7B in bets in cocoa futures from hedge funds.

Retail Media Networks (RMNs)
In 2025, retail media ad spending will represent over 23% (more than a fifth) of all digital ad spending in the U.S. As retail media investments reach record levels, retailers will focus on not only selling product placement ads (i.e., display), but also monetizing e-commerce search results.

Quick Commerce Evolution

Many quick-commerce players are re-focusing, targeting high-frequency buyers in their most profitable markets. In the U.K., for instance, average orders per e-shopper was higher than other EU lead markets, making it a key market of focus for some companies thinking about q-commerce differently.

Social Commerce
Impressive double-digit sales growth of TikTok in China (+54.8% vs. previous year), with strongest growth in personal care, paper products, and pet care categories. China and other Asian markets are leading the globe in social commerce.

The changing face of omni retail around the globe

23%

of U.S. ad spending in 2025

42.3%

avg. orders per e-shopper in the U.K.

+55%

sales growth via TikTok channel in China

The changing face of omni retail is another global phenomenon that’s diversifying in many new and unique ways around the world.

The omnichannel retail landscape is undergoing a global transformation, driven by several key trends:

Rise of Retail Media Networks: Retail Media Networks (RMNs) are gaining prominence as brands increasingly prioritize digital advertising on platforms like Amazon Ads. RMNs are expected to account for 23% of all digital ad spending in the US by 2025.
Evolution of Quick Commerce: Quick commerce players are focusing on achieving profitability by optimizing their geographical operations and targeting high-frequency buyers in profitable markets.
Emergence of Social Commerce: Social commerce is rapidly growing, as seen in the double-digit sales growth of platforms like TikTok (Douyin) in China. This trend is particularly strong in Asian markets but is spreading globally.

Social commerce is rapidly transforming the retail landscape, with platforms like TikTok (Douyin) in China demonstrating significant sales growth. In Australia, one in four consumers are willing to purchase via social media, highlighting its growing importance in the consumer journey.

Social media is also playing a crucial role in product discovery and learning, with 33% of consumers using social media for product information before traditional search engines and 35% relying on social media as their primary source for learning about new innovations.

Evidence of the widened scope of today’s social commerce revolution

Furthermore, social media is influencing product choices, with 29% of consumers stating they would switch brands based on recommendations from social media influencers, particularly among younger demographics.

Gamification is another emerging trend in social commerce, with 34% of consumers willing to spend more due to in-app challenges or rewards and 28% likely to purchase products featured in games.

Despite these opportunities, social commerce faces challenges in consumer adoption. Concerns about payment security and ad fatigue are prevalent, with 60% expressing distrust in social media payments and 65% ignoring or skipping ads. Building trust and delivering meaningful engagement will be crucial for the continued growth of social commerce.

Purchase intent

Learning and discovery

Influence on choice

Gamification

1 in 4

Consumers in Australia are likely to purchase via social media.

But

60%

don't trust security of paying via social media.

65%

ignore or skip ads on social media.

1 in 4

would search social media
(e.g., TikTok) for product information before a traditional search engine (e.g., Google).

35%

would use social media as their primary source to learn about new products and services.

34%

would spend more on a purchase because of an in-app challenge, point system, or reward experience.

28%

would purchase a product that has been in a video game / online game.

29%

would change brands based upon the recommendation of a social influencer.

10% for Boomers
23% for Gen X
40% for Millennials
44% for Gen Z

37%

would seek a new product in-store or online because of something seen on social media.

Consumers are more open to lower-stakes AI involvement in their shopping decisions

While consumers may not be ready for full-scale AI integration in their shopping experiences, they are open to AI applications that enhance convenience and efficiency. This is particularly true for younger generations, with nearly half of Gen Z and Millennials expressing a willingness to use AI to automate or speed up their shopping decisions.

However, older consumers are less receptive to AI-driven shopping experiences, highlighting the need for retailers to provide options and support to avoid alienating this demographic. By segmenting experiences and offering alternatives for older consumers, retailers can foster greater AI adoption without compromising customer relationships or hindering future growth potential.

40%

would accept a product recommendation from their AI assistant (e.g., Siri on iPhone, Amazon Alexa, etc.)

49%

would leverage AI to automate and speed up their everyday shopping decisions

35%

would allow ‘smart’ devices (e.g., fridge sensors) to automatically order new products when required

34%

would purchase a product or service they have only examined or experienced through augmented reality or virtual reality

Deep variances exist by generation. Older cohorts remain the most hesitant—by a significant margin.

There are many ways consumers have embraced AI. Consider these lower-stakes options alongside back-end integrations (innovation, research, etc.), to ease consumers through AI transformation.

As leaders in this space, who have a proven track record of leveraging AI at scale, NIQ is the premier partner to manufacturers and retailers seeking to be AI-forward, leveraging the right data to make a big difference.

Unlock faster insights with NIQ Ask Arthur—a GenAI tool that’s redefining the landscape of data exploration and utilisation. Find what you need fast, and simplify data interpretation.

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Leveraging the right data, makes a big difference. When Artificial Intelligence models are carefully prompted with the types of comprehensive, granular, and up-to-date data that only NIQ has, they can offer remarkably human responses.

Key Takeaways for Brands and Retailers

STATE OF CONSUMERS

The global state of consumers is determined to get ahead.

Half of consumers

across ANZ still feel in a worse financial position

Rising cost of living

remains the biggest consumer concern across ANZ

CPI decelerates

to levels below 4.0% vs YA, but still maintains above pre-pandemic levels

Key Questions:

How have consumers’ lifestyles, preferences and values evolved?
What plans, expectations and decisions define consumers’ future outlook to guide long-term business planning?
What key demographic, psychographic or attitudinal behaviors differentiate your target consumers?

Solutions:

NIQ BASES Studio: Quick Suite

NIQ Consumer Analytics: Custom surveys and segmentation

FINANCIAL POLARIZATION

Stability for many but even the most financially secure will be vigilant.

Half of consumers

in ANZ say they’re cautious with their spending, while Struggling consumers grow in both countries from 17 to 19% in Australia and 12 to 24% in NZ

Strugglers

are twice more likely to be seeking additional income streams beyond their primary job (37% in Australia and 40% in NZ)

31%

of Australian residents were born overseas. Immigration is now higher than pre-COVID and now Indian is the nationality that is growing fasters among the population

Key Questions:

How can you develop the best price and promotion strategy aligned to polarized consumers?
How can you target your highest value opportunities with a hyper-local level of precision?

Solutions:

NIQ Revenue Management: Revenue Optimizer & Business Drivers Models

NIQ Route-to-Market: Precision Areas

CONSUMPTION DRIVERS

Volume trend improves, but many still spending more for less

+3.0%

FMCG unit volume growth trend improves, as average price growth decelerates

-2%

Tech & Durables value decline, driven by Domestic Appliances, while Telecom shows more resilience

40%

of a brand’s shoppers only buy once, according to an EU study of 7K brands. Penetration is key to brand growth beyond inflation

Key Questions:

Which in-market causals are driving volume gains or losses for your business?
How can your business attract new shoppers and encourage existing shoppers to buy more?
How can I track performance globally to simplify cross-market decisioning
with a harmonized dataset?

Solutions:

NIQ Consumer & Shopper Insights: Homescan

NIQ Retail PoS: Retail Measurement Service

REDEFINING DISCOUNT

Embrace the new hybrid definitions of value among consumers.

Alternative retailers

gain relevance by growing Penetration as consumers cross-shop to find better deals

31 and 34%

of Aussies and Kiwis would switch to buy a private label products1 and High-Income Households are driving PL growth

+8.4%

growth in Discount retail channel in Australia, as discounters become the second-fastest-growing channel in the latest year

Key Questions:

How can you optimize your product mix across the entire store to align to consumers new views on ‘discount’?
How can you anticipate consumer trade-offs with your innovations to maximize appeal and volume potential?

Solutions:

NIQ Assortment & Merchandising: Shelf Architect & Market Structure

NIQ BASES: Portfolio & Price

TRENDS TO WATCH

Anticipate the social commerce revolution, the new face of omni, AI expectations, GLP-1 medications, and shifting commodity prices.

+0.4% up to 1%

potential boost to U.S. GDP due to rise and impact of GLP-1 medications in America

1 in 4

Australian consumers are likely to purchase via social media

60%

would avoid sharing personal details virtually because they do not trust data privacy with AI technologies

Key Questions:

What is evolving within the most comprehensive view of my sales across online and offline channels?
What growth-driving product attributes can you leverage to entice consumers?
How can you personalize marketing at-scale powering ads that work?

Solutions:

NIQ Omnisales

NIQ Product Insight

NIQ Retail Media Intelligence

NielsenIQ (NIQ) is the world’s leading consumer intelligence company, delivering the most complete understanding of consumer buying behavior and revealing new pathways to growth. NIQ combined with GfK in 2023, bringing together the two industry leaders with unparalleled global reach. Today NIQ has operations in more than 95 countries covering 97% of GDP. With a holistic retail read and the most comprehensive consumer insights—delivered with advanced analytics through state-of-the-art platforms—NIQ delivers the Full View^™.  