For most process manufacturing industries, decarbonization remains a top priority. However, in Consumer Packaged Goods (CPG) manufacturing, we see the focus shifting towards greater profitability and shareholder returns. Faced with this investor pressure for stronger short-term financial performance, many of today’s manufacturers are now deprioritizing sustainability investments.
This is a common misconception that manufacturers must choose either financial or sustainable outcomes. But this isn’t the case–they can be achieved independently or in tandem.
I see three transformative trends presenting game-changing opportunities to reshape the industry: electrification, digital transformation, and circularity.
Let’s dive in and see how they impact sustainability and profitability.
1. Electrification: Powering the future
As industries shift to cleaner energy, process electrification is crucial but can be complex for high-energy food production functions like boiling or baking.
During a recent customer visit, they were transitioning from gas to electric ovens. But this conversion is more complex than what it may seem and requires careful study to answer key questions:
- Is my electrical distribution correctly sized to handle increased load demands safely and reliably? What upgrades are needed, and can they be combined with planned equipment obsolescence replacements?
- Will I need to change operating procedures or control loops to accommodate the demand change? Will it improve the quality of the product?
True electrification requires strategic planning to mitigate these risks. It should start with an electrical audit to identify assets, gaps, and risks. Additionally, outdated assumptions about power reliability should be reevaluated. With today’s unpredictable energy landscape, alternatives like on-site generation (e.g., microgrids) or power purchasing agreements (PPAs) can provide greater control and stability.
2. Digital transformation: The industry’s nervous system
If electrification is the backbone, digital transformation is the brain. While enabling smart sensors to collect data in real-time is a foundational step to digitalization, true transformation requires a holistic organizational approach.
It’s tempting to invest in short-term, quick-fix solutions, but it can lead to costly technical and process debt. Top-performing production sites invest approximately four times more in processes and people than technology alone.
Why? Because only by understanding how your processes and people interact and exchange information can you deploy the right digital solutions– whether for process automation, asset management, resource allocations, or food quality assurance. By prioritizing processes and people, CPG manufacturers can accelerate frontline workers’ technology adoption, scale more effectively, and engage employees in identifying new use cases.
For example, Hochwald Foods, one of Germany’s largest dairy cooperatives, utilized end-to-end digital system integration to bridge data gaps between shop-floor operations and executives. This enabled seamless monitoring of everything from entry security to product quality—transforming operations and preparing for future challenges.
Furthermore, with the right technology foundation and solid data infrastructure, businesses can unlock the potential of artificial intelligence (AI) to handle repetitive tasks, proactively identify issues, and improve oversight, allowing people to focus on high-value work.
A unified digital transformation strategy that integrates technology, people-focused initiatives, and process improvements drives sustainable efficiency, helping to optimize resource usage, ensure scalability and resilience, and unlock long-term value.
3. Circularity: Rethinking sustainability for competitive advantage
According to a report by the Ellen MacArthur Foundation, “the consumer goods industry could save $700 billion in materials alone through the adoption of a circular economy.”
Even CPG consumers increasingly prefer sustainability efforts. In the U.S., for example, a McKinsey U.S. consumer sentiment survey revealed that more than 60% of respondents said they’d pay more for a product with sustainable packaging. Nielsen IQ found that 78% of U.S. consumers say a sustainable lifestyle is important.
Newer approaches to sustainability, particularly circularity, can provide significant business value for CPG companies:
- Water stewardship. Reducing overall water consumption, including reclamation, from processes like boiling, greywater for non-clean functions, and traditional conservation methods.
- Ingredient optimization. Minimize waste through simple actions like precise measuring to more complex concepts like repurposing byproduct waste. For example, some popular candy bars use reprocessed rejected bars for cream fillings.
- Packaging innovation. With 80% of the top 25 CPG companies committed to fully recyclable packaging by 2030, sustainable packaging is now a competitive differentiator. This move towards sustainable-by-design and easy-to-recycle packaging can include using recycled paper or plastics, reducing excess product wrapping, and adapting packaging formats and sizing to minimize material use.
By adopting a circular mindset and leveraging digitalized systems, CPG manufacturers can optimize resource usage, reduce waste across the product lifecycle, and enhance customer satisfaction—all while driving long-term sustainability.
Shaping the CPG future: Adapt to thrive
The CPG industry is at a crossroads. Electrification, digital transformation, and circularity are not just trends but strategic imperatives for differentiation and long-term success.
Sustainability-marketed products drive about one-third of CPG growth despite making up just 18.5% of the market. CPG manufacturers that fail to evolve risk missing out on growth opportunities and losing relevance in an increasingly competitive and sustainability-conscious market.
Navigating these transformations can feel overwhelming, but you don’t have to go it alone. Partnering with experts can simplify the process, ensuring you have the right systems, solutions, and strategies to deliver impactful results.
Curious about what’s next?
Visit us at Hannover Messe 2025 to see our circular manufacturing campus in action, including real-world CPG innovations. Gain firsthand insight into what’s shaping the future of industrial automation – including next-generation robotics, industrial AI, next-frontier industrial tech, cyber security, and software-defined open automation.
You can also see the latest insights into how Food & Beverage companies can use best practices to accelerate their digital transformations.
Together, we can shape a future where electrification, digitalization, and sustainability aren’t just goals—they’re the foundation for differentiation, resilience, and success in a rapidly changing world.
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