AI in Consumer Packaged Goods Report 2024

Transform your understanding of what consumers truly want with our exclusive report on the future of AI in the CPG industry.

Uncover detailed insights into how AI, sustainability, and exceptional customer service demands are driving changes in key European markets.

This comprehensive report enables you to learn directly from consumers about their expectations and preferences, gaining the knowledge you need to stay ahead in this dynamic industry.

Key Takeaways

Short on time? Here’s a 60-second summary:

As consumers integrate AI into their everyday lives, it is becoming a key part of their customer journey. Consumers also expect products and customer service to harness AI.
Most consumers are satisfied with AI-enhanced products and optimistic about how AI can improve products, customer experiences, and purchasing behavior.
Sustainability is now a key criterion for consumers—and they are prepared to pay a premium for products with reduced environmental impacts.
Consumers are aware of how AI can improve sustainability and are likely to buy products that use technology in the interest of the environment.
Effective customer service is key to customer satisfaction and retention.
Consumers are happy to interact with AI-assisted solutions but want them to improve.
Consumers expect AI to lead to price rises overall, but are less willing to accept them without a link to sustainability. They are also skeptical about how AI technology is using their data.

Introduction

In an economic environment characterized by flatlining baseline growth and an aggressive competitive landscape, consumer goods retailers in Europe are exploring all avenues as they seek to develop their businesses — and must increasingly look to new technology to stay ahead. Unsurprisingly, their attention is turning to artificial intelligence.

The rise of AI, as well as cloud computing and IoT, has created a competitive divide between early adopters and laggards. This shift will continue to impact the industry, forcing companies to reevaluate their short-term visions. And those who do not future-proof their commerce set-up for the AI revolution will be left behind. In this exciting context, we have collated extensive market research available on consumer attitudes towards artificial intelligence in the British and German CPG markets.

Besides a generally positive attitude to AI, which consumers expect to improve both products and their own customer journey, our survey also reveals the growing importance of sustainability in consumers’ purchasing decisions — including a willingness to increase their budgets to finance improvements in this area. It also confirms that, in a highly competitive environment, quality customer service is crucial to continued success. Changing consumer preferences and expectations, driven by these factors, require companies to innovate and adapt their product offerings and marketing strategies, as companies that fail to meet evolving customer expectations risk losing market share to more agile competitors. For this reason, CPG retailers require an acute awareness of these important shifts in consumer preferences to best serve today’s customer experience.

To help them do this, this report provides an overview of consumer attitudes, highlighting the key findings from within the data and offering relevant analysis. After a brief summary of respondents’ habits, we will look in depth at responses to AI, sustainability, and customer service in CPG, providing insights into differences between the UK and German markets — and drawing conclusions on how retailers might respond to our findings. As the world changes faster than ever before, with the rapid adoption of AI at the helm, being prepared requires a new approach. This report is designed to help enterprises respond to market trends and customer requirements as quickly as is necessary to capture share in the CPG sector.

About the Research

With annual sales volumes of £510 billion and €650 billion, respectively, in 2023, the retail markets in Britain and Germany are Europe’s largest—and among the most important worldwide. In two representative nationwide surveys, based on age and gender quotations, Appinio asked 2,000 end consumers split evenly between Germany and the UK a range of detailed questions about their consumer habits and their opinions and preferences regarding AI, sustainability, and customer service in retail. The result is the largest and most detailed set of data currently available about these issues in CPG in Britain and Germany. This dataset was collated by Appinio in cooperation with Spryker.

Survey participants were between 16 and 65 years of age (average age: 40.3); 1000 lived in Germany, and 1000 lived in the UK at the time of their responses. In total, 994 men and 1006 women took part in the two surveys. Respondents in both countries answered 22 questions about their habits, opinions, and preferences in late May 2024.

At the beginning of the survey, participants were asked how often they bought which categories of CPG. The highest-frequency segment was food and beverages, with almost a third of survey participants buying them daily and nearly two-thirds on a weekly basis; only one in ten consumers bought products from this segment less frequently. Following this, the personal care, household, and health & wellness segments were the next most frequent, with 30%-40% of consumers shopping for these items on a daily or weekly basis and 40%-50% buying them monthly; beauty and personal care, the fifth most-frequently bought segment, was a daily or weekly basket item for around a quarter of respondents and a monthly one for many more.

After this, the survey questions suggested a range of segments in which the average frequency is, by nature, far lower. At least a third of respondents rarely or never buy pet-care products, for instance, and half say the same of home décor and furnishings and office and school supplies; a full 44% of respondents never buy baby and childcare products — as is to be expected in aging markets in which ever fewer households have children.

Artificial intelligence in CPG

AI technologies are transforming e-commerce, making shopping experiences more personalized and interactive. While integrating AI comes with its own set of challenges—such as initial costs, the need for high-quality data, and adapting organizational culture—it also opens up exciting opportunities. From Coca-Cola using AI to predict consumer preferences and develop more effective marketing strategies to L’Oréal’s AI-driven skin-type analysis and recommendation engine, FMCG giants are at the forefront of this technological revolution; and, increasingly, retailers are following them.

This is good because our report reveals that consumers are overwhelmingly positive about AI in retail. Three-quarters of respondents expect that AI will lead to improvements in product quality, for instance, and one-quarter is aware of having bought an AI-enhanced product. What is more, an almost unanimous 96% of those who have already purchased a product with an AI element were satisfied with it, with 40% reporting very high levels of satisfaction.

AI is also impacting consumer habits. Our survey shows that a clear majority expect AI to help them make better buying decisions, with two in five respondents already using generative AI tools like ChatGPT to research products.

Overall, our study shows that consumers showed high awareness of AI, openness to using it, and a clear expectation that it will bring them value. This is good news for enterprises that are already thinking about how AI can improve their CPG products and retail operations to give them a competitive edge in challenging market conditions — and a reminder to all in the sector that the ability to respond rapidly to technological trends must be a key element of all strategic considerations.

It’s important to note that these consumer attitudes also align with market trends. Market experts expect AI to profoundly impact digital commerce by enhancing consumer interactions. One study from McKinsey & Company found that AI-driven marketing campaigns can significantly improve business performance, demonstrating a potential revenue increase of up to 30%.

Amazon Web Services (AWS), known for leading the charge in AI enablement across industries, has also verified AI’s impact on the transformation of CPG. At a recent AWS Summit, they showcased how retail providers use AI for product personalization for production, research, and development, highlighting that the future of the industry will include extensive customization.

Let’s examine the data more closely to see what this means for the future of CPG.

AI awareness is strong

As our surveys reveal, most consumers have knowledge of these developments, with 65% responding that they are aware that AI technologies are being used in the production and marketing of consumer goods. In both markets we surveyed, men were significantly more likely to answer in the affirmative than women: 70% of German and 73% of British male respondents said they were aware of AI in CPG; among women, that figure was 58% in both markets. Similarly, age is a consistent factor, with consumers in the 25-34-year-old bracket the most likely to know that AI is being applied to consumer goods.

Here, however, young UK respondents were significantly more likely than their German counterparts to answer in the affirmative: 85% as opposed to 73%. Conversely, older German consumers were more likely to be aware of this development than the same cohort in the UK. Another slight distinction between the markets is revealed when consumers are asked to rate their level of familiarity with the concept of AI in consumer goods on a scale of 1 (not all familiar) to 6 (extremely familiar). While overall, the most frequent rating consumers gave themselves in both markets was 4, almost twice as many British consumers answered that they felt extremely familiar with AI in CPG than German respondents (19% as against 10%).

This difference is rendered visible when consumers are asked whether they have ever bought a product that advertised the use of AI in its design or production. Here, only 20% of German respondents were certain that they had, with 44% unsure; in the UK, far more respondents were aware of having purchased an AI-enhanced product (35%), and uncertainty was far lower (32%). Across both country samples, men were significantly more likely than women to respond that they knew that they had bought a product with an AI element.

High hopes for and high satisfaction with AI-enhanced products

In both markets, the surveys showed not only high levels of awareness about AI in CPG but also high hopes for its potential. Overall, a strong majority of respondents thought it likely that AI applications would lead to product improvements, with three-quarters of survey participants rating this as somewhat likely (33%), quite likely (26%), or very likely (16%). UK consumers were particularly optimistic here, with 21% considering AI-related improvements to product quality very likely.

British consumers’ bullishness may well be explained by the positive experiences they have had thus far: almost half of the UK respondents who had already bought an AI-enhanced product reported the highest possible level of satisfaction with it (very satisfied); more than a third were quite satisfied and another 13% somewhat satisfied. Inversely, only 3% reported dissatisfaction. Meanwhile, although not quite as enthusiastic as their British counterparts, German consumers who had already purchased an AI-enhanced also reported high levels of satisfaction, with only 6% rating themselves as very, quite, or somewhat dissatisfied. Here, conversely, to UK results, almost half of the respondents were quite satisfied and only a third very much so.

Despite this discrepancy, the overall takeaway is clear: in both markets, levels of satisfaction with AI-enhanced products are high, and dissatisfaction is extremely low. This will be welcome feedback for FMCG and CPG retailers who are already deploying AI — and can be read as encouragement to continue in the same vein.

Differences in consumers’ own use of AI

When it comes to their own use of AI solutions in purchasing consumer goods, respondents in both markets showed themselves to be optimistic overall, albeit with slightly more reserve — and with wider gaps between the UK and Germany. The clearest discrepancy was in the number of people who already used a generative AI tool such as ChatGPT to assist them in product research: among British respondents, more people reported having used AI (46%) than not having done so (42%); in Germany, a clear majority of respondents had not yet used AI themselves in researching a product (53%), and only one third were certain that they had.

Moreover, of those who had already used AI to support them in making a purchasing decision, a markedly higher number of German respondents reported finding it ineffective than in the UK. In Germany, 10% stated that AI had been somewhat ineffective, 2% rated it quite ineffective, and 1% said it had been very ineffective. This compares to only 6% of UK respondents who reported disappointment with AI. Conversely, the highest percentage of respondents rated AI as very effective in helping them make a purchasing decision (40%), and the second highest number said it had been quite effective (38%).

While it might be tempting to read ‘German Angst’ into this finding — especially given the cultural store set by data protection in Central Europe — this would be incorrect, as becomes clear when looking at participants’ responses about the future prospects of harnessing AI to help them research and purchase CPG. Overall, German respondents are also convinced that AI will become an important element in deciding what to buy—albeit with the usual caveat that levels of enthusiasm (“extremely important”) are higher in the UK than in Germany. Instead of German concerns about data privacy, a more likely explanation for the current discrepancy in the use of and satisfaction with AI in product research and purchase is that generative AI is, to date, a primarily English-language tool. As applications such as ChatGPT improve in other languages and are supplied with more context from other cultures, they will become more useful to consumers there. Our interpretation of the data strongly suggests that German respondents believe this will be the case.

Sustainability in CPG

In view of its increasing importance to consumers and businesses, another focus of our survey was sustainability. Our data shows that environmental concerns are growing in importance for consumers, exerting ever more influence on their purchasing decisions and shaping their buying behavior. Our respondents also displayed a high level of understanding about how technology such as AI can reduce environmental impacts. Importantly, our survey respondents revealed themselves to be realistic, aware that increased sustainability may lead to higher prices and not unwilling per se to pay them. This puts the onus on CPG providers and retailers to test, launch, and scale new sustainable digital business models that meet these customer needs.

Overall, a majority takes sustainability into account when buying CPG, is aware that AI is already being used to reduce products’ environmental impact, and is willing to pay a premium to support this. Taken together, these findings show that consumers increasingly consider sustainability a quality issue — and that companies using AI technology to make their production and distribution more efficient will be able to use their achievements as a differentiating factor.

Let’s examine the data more closely to see how this impacts the customer experience.

Consumers care about environmental impacts — and understand that AI can help

First and foremost, our survey shows that a strong majority of consumers take account of sustainability when buying CPG. In both of our surveyed countries, four in five consumers accord sustainability some degree of importance in their CPG purchasing decisions — with over half of respondents rating sustainability as either quite or extremely important. In line with other questions asking participants to provide answers on a scale, in the UK, there was a higher tendency to opt for maximum ratings (28% “extremely important”) than in Germany (18%). Yet overall, the two markets showed remarkably similar sentiment here.

Viewed in the same manner, both countries samples were also remarkably consistent in their awareness of the role artificial intelligence is playing in improving sustainability in consumer goods: three in five consumers are aware that technologies such as AI-assisted product and packaging design, predictive maintenance, and delivery route optimization are already being deployed to improve sustainability. Here too, UK respondents tended more towards rating themselves as extremely aware, German respondents preferring to answer that they were somewhat aware.

Regardless of the degree to which each sample rates its awareness, what is clear is that in both countries, over 60% of consumers state that they understand the role AI is playing in making production and distribution more efficient and, thus, more sustainable. This is a striking and highly encouraging result that documents the progress pioneers in CPG have made and the success they have had in communicating their efforts to date and will encourage them to continue down this path.

Consumers make decisions based on sustainability — and pay a premium

Another finding in our data of interest to CPG companies pursuing a tech-led sustainability strategy is that consumers are both more likely to buy their products and say that they are willing to pay more to do so. Across both survey samples, almost four in five respondents reported that they were somewhat, quite, or very likely to purchase from a brand that uses AI to reduce environmental impacts. Contrary to frequent claims about value-action gaps (“Consumers say that sustainability is important, but aren’t willing to pay for it”) as economic factors often lead them to opt for lower-priced alternatives in the supermarket, over three in five of our survey participants stated that they would be, to some degree, likely to pay more for products from companies that use AI to ensure ethical and sustainable practices.

One limitation to this readiness is put into relief when cross-referencing answers to this question with responses when survey participants were asked whether they would continue buying a product if the use of AI-led to higher prices. Here, 46% of respondents rated themselves as, to varying degrees, unlikely to continue purchasing. What is more, consumers are clearly expecting increases: 72% of them think it is probable that AI enhancements will lead to price rises.

This sounds a note of caution: consumers are expecting price rises due to AI — and are, to a surprisingly high degree, prepared to accept increases in the service of better ethical and sustainability standards. This readiness is, however, tempered by a wariness of price rises overall, meaning that manufacturers and retailers will have to communicate the precise way in which AI is reducing the environmental impact of their products in order to realize the premium.

With this caveat, the fact remains that when it comes to sustainability, consumers in two of Europe’s major retail markets are, in theory, willing to put their money where their convictions are. These findings reinforce what researchers are learning about consumer preferences in the US and, when viewed in each of the two individual markets, also reinforce the slight yet consistent discrepancies between Britain and Germany in our data.

German consumers remain more price-conscious

As in other questions, British respondents are considerably clearer in their responses — especially when it comes to their likeliness to buy CPG products from brands using AI in sustainability and their readiness to pay more. While responses were comparable when taken overall — 76% of German and 78% of British participants said they would be likely to buy, 62% and 65% respectively prepared to pay more — UK answers revealed a particularly strong likelihood to prioritize perceived quality over price: a full 20% would be very likely to pay more for AI-enhanced ethical and sustainability standards, while only 11% of German participants opted for this response.

This difference remains visible when the scope is expanded to the two highest ratings (“quite likely” and “very likely”), selected by only 33% of German respondents as against 41% of UK-based participants. Conversely, when asked to what extent they would continue buying a CPG product if AI enhancements more generally led to higher prices, German survey participants were more likely (48%) than their British counterparts (44%) to express reservations. As in other areas of retail, in CPG, Germany remains an acutely price-sensitive market where a significant proportion of consumers have high ethical standards and quality expectations but are less willing to compromise on the bottom line.

Customer Service in CPG

One of the most widespread uses for AI is in supporting manufacturer and retail customer service, and for consumers, quick and effective customer service is one of the key factors in how they view CPG brands. Many suppliers have recognized both the importance of good service and the potential for technology in this area, so for several years now, intelligent chatbots and predictive call-management systems have been seeing high levels of adoption. Our responses show that consumers are aware of this shift and view it in a generally open-minded light, but that a not insubstantial minority is still not getting sufficient satisfaction from automated customer service solutions.

Overall, the data shows that effective customer service is extremely important to consumers, making operational efficiency an absolute priority for companies looking to secure customer satisfaction and lasting loyalty. Consumers expect AI to play a role here, too, but a significant proportion of them are not yet satisfied with solutions deployed on the market.

Customer service is king

Across both survey samples, 92% of respondents stated that efficient customer service was somewhat, quite, or extremely important to them. This is one of the highest values recorded across all questions asking respondents to rate the role a specific quality marker plays in their purchasing behavior, putting it ahead of sustainability — and on a par with non-negotiables such as quality in the food & beverages or personal care segments. Interestingly, where German consumers seem most concerned by price, British consumers appear to be sticklers for good service: In the UK, a significant 40% of respondents rated efficient customer service as extremely important, compared to 27% of their counterparts in Germany.

AI in customer service: UK companies ahead

Manufacturers and retailers seem to have understood the crucial role efficient service plays in customer satisfaction and retention in the UK market, being quick to roll out interactive chatbots and other AI-enhanced service technology. As such — and potentially, as outlined above, due to the current edge English-language solutions have in the AI space — a far higher percentage of British survey participants (68%) had interacted with automated customer service solutions than their German counterparts (49%).

A potential quality gap between English and German language AI may also be one reason why, of those who had already interacted with automated customer service solutions, more German respondents (34%) reported having had a negative experience than in the UK (29%). Nevertheless, this could also simply be another instance of a running theme throughout survey answers in which British participants were in general more enthusiastic: the most frequent rating for experiences with AI service solutions such as chatbots in the UK was “very positive” (27%); in Germany, only 15% gave this rating, preferring “somewhat positive” (28%).

AI in customer service: some way left to go

Despite these differences, what our findings show is that, across both markets, consumers are far from wholly satisfied with the automated service they are receiving. Even in the UK, where respondents seemed generally more prone to praise (and pay premiums), almost one in three survey participants reported having had a somewhat, slightly, or very negative experience with an AI solution. Especially in a market where customer service is so important, this should be the cause for companies in the CPG category to prioritize improvements to their automated tools, optimizing buying journeys and aftersales processes to create a seamless, high-quality brand experience.

And whether in Germany or Britain, high quality in automated customer service will be of all the more importance given consumers’ potential unwillingness to accept price rises for AI-enhancements outside the area of sustainability (see previous section). It is a safe assumption that consumers in both markets will increasingly come to expect the highest service standards and latest automated solutions as part and parcel of CPG products—and not legitimate grounds to be asked to pay a premium.

Primacy of privacy

One overall finding of our survey is that, beyond simple effectiveness, a key element in applying AI-enhanced solutions will be an uncompromising attitude to data privacy backed up by clear communication because, as our final question revealed, consumers remain skeptical about this aspect of AI technology. Across both survey samples, participants were generally confident that AI will have a positive impact on sustainability, but were also concerned about how their data is being used—and decidedly uncertain about whether they trust AI technology in this area.

Interestingly enough, German consumers were, in spite of their higher overall sensitivities to privacy, slightly less concerned about how AI is using their data than their UK counterparts; potentially, this is due to overall lower exposure to the technology thus far, but is certainly a reminder to all companies deploying new technology to think carefully about how they respond to these concerns. Without privacy, transparency, and responsibility vis-à-vis data usage, AI solutions will not reach their full potential to increase customer satisfaction and brand loyalty with a broad cross-section of consumers.

The future of CG

As the data has shown, our report offers a compelling narrative about consumer attitudes to AI, sustainability, customer service, and the future of the customer experience. In a space often dominated by buzzwords and assumptions, we can show in detail that consumers in two key European markets actually have a well-developed understanding of new technology in CPG—and are ready to join companies in the move toward more efficient and sustainable buying processes. In return, they expect improvements in quality and service along with a responsible attitude to their data.

In the race to leverage the power of Generative AI, CG businesses are being bombarded with AI promises, but many find themselves struggling to turn hype and dreams into tangible results. Spryker helps CG brands unlock the true potential of AI, empowering customers to apply innovations like conversational commerce for hyper-personalization to their digital journey.

Thanks in part to its strong partnership with AWS, Spryker promotes a legacy of innovation in digital transformation, shaping the future of AI applications across the consumer goods industry. From unlocking new business models that enhance the competitive edge to capturing more profitable growth and scale, this partnership is helping customers fuel their long-term success.

Learn how you can redefine the customer experience by enabling mass personalization of conversational commerce here.

Data powered by Appinio, your go-to market research provider helping companies gain deep insights into consumer preferences and behaviors, enabling brands to better understand and engage their target audience.

About Appinio

Appinio provides effortless market research, enabling businesses to make better strategic decisions. Appinio delivers research from 190+ markets, collecting millions of opinions every day. More than 2,600 clients spanning various industries worldwide trust Appinio, including enterprises, SMBs, NGOs, media, as well as all leading agencies and consultancies. Founded in 2014 by Jonathan Kurfess (Chairman), Max Honig (CEO), and Kai Granaß (CTO), Appinio is headquartered in Hamburg, Germany. The remote-first and B-Corp certified company has been profitable for several years and boasts over 260 employees from 35+ nations worldwide.

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About valantic

valantic is Number 1 for digital transformation and one of the fastest growing digital solutions, consulting, and software companies on the market. More than 500 blue chip clients rely on valantic, including 33 of 40 DAX companies and many leading international companies as well. With more than 4,000 specialized digitalization experts and net sales of approx. EUR 600 million in 2024(e), valantic is represented in 18 international locations around the globe. More than 2,000 digitalization projects over the past five years have shown that valantic understands the business challenges of its customers. From strategy to tangible implementation, they have the necessary expertise to accompany projects from start to finish and make them successful. In this, valantic combines technological expertise with industry knowledge and the human touch. valantic consults companies on all challenges of digital transformation, helps them to better manage their corporate performance and leverage the potential of data and artificial intelligence. In addition, valantic supports its customers in optimally shaping the customer experience, profitably using core digitalization technologies and optimizing company processes from end to end.

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About Spryker

Spryker is the leading global composable commerce platform for enterprises with sophisticated business models to enable growth, innovation, and differentiation. Designed specifically for sophisticated transactional businesses, Spryker’s easy-to-use, headless, API-first model offers a best-of-breed approach that provides businesses the flexibility to adapt, scale, and quickly go to market while facilitating faster time-to-value throughout their digital transformation journey. As a global platform leader for B2B and B2C Enterprise Marketplaces, IoT Commerce, and Unified Commerce, Spryker has empowered 150+ global enterprise customers worldwide and is trusted by brands such as ALDI, Siemens, ZF Friedrichshafen, and Ricoh. Spryker is a privately held technology company headquartered in Berlin and New York backed by world class investors such as TCV, One Peak, Project A, Cherry Ventures, and Maverick Capital. Learn more at spryker.com.

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AI in Consumer Packaged Goods —Report 2024