CPG Industry Embraces Innovation Over Cost-Cutting in 2025

Prioritizing Innovation in the Consumer Goods Sector

The consumer goods industry is experiencing a profound transformation as companies increasingly prioritize innovation over cost-cutting measures. A recent report by Rockwell Automation highlights how top-performing companies in this sector are making strategic investments in artificial intelligence and workforce development to enhance their competitive edge.

Key Findings from the State of Smart Manufacturing Report

In Rockwell Automation's 2025 State of Smart Manufacturing Report, it was revealed that a majority of consumer goods manufacturers are actively shifting their focus from merely reducing costs to fostering innovation and growth. This reevaluation arises from several pressing challenges: the surge in private label brands, the urgent demand for quicker innovation cycles, and consumers' desire for more transparent and sustainable products.

The report emphasizes a notable trend—companies are moving away from fragmented technology pilot projects, opting instead to invest in enterprise-wide solutions that yield measurable outcomes. This strategic pivot helps manufacturers tackle complexities while remaining competitive in a rapidly changing market landscape.

Increasing Pressure from Market Dynamics

The findings indicate heightened competition within the industry. In 2024, economic uncertainty and inflation were significant concerns; however, by 2025, the emphasis had shifted primarily to intensifying competition. As private label products gain traction and consumer purchasing behaviors evolve, manufacturers must adapt swiftly to retain consumer loyalty.

The Role of Technology in Enhancing Workforce Capabilities

Not just about adopting new tools, manufacturers are concerned with aligning technology with their teams and operations. User-friendliness and scalability have become crucial factors when selecting new technologies. Companies are now seeking employees with strong communication and teamwork skills (86%), adaptability and flexibility (85%), as well as analytical thinking and cybersecurity expertise (84%). These competencies are invaluable as industries aim to remodel their workforce for more agile operations.

Focus on AI and Robotics Investments

A significant transformation in investment strategies has unfolded within consumer goods manufacturing. According to the report, 70% of manufacturers plan to invest in AI, robotics, and simulation technologies, which marks a departure from previous years where technology was primarily aimed at sales analysis and process optimization. This strategic investment shift is indicative of a long-term vision that emphasizes sustainable business growth and competitive advantage.

Data-Driven Decision Making

Moreover, the effective utilization of data is becoming increasingly vital. The percentage of manufacturers who report using their data as a basis for decision-making has risen from 40% in 2024 to 44% in 2025. Key areas where AI is significantly impacting data usage include quality control, logistics, and cybersecurity.

Evolving Workforce Strategies

While 2024 was marked by a strong focus on attracting new talent, the 2025 report illuminates a shift towards upskilling existing employees in updated processes. For 34% of manufacturers, improving training initiatives and employee retention takes precedence, while 33% focus on handling change effectively.

Steve Deitzer, Vice President of Global Industry, CPG at Rockwell Automation, notes, "Consumer goods manufacturers are no longer simply responding to challenges; instead, they are proactively investing in technologies that foster sustainable growth and competitive advantages." He underscores the necessity of long-term thinking, where components like AI, automation, and workforce support are essential to success.

Conclusion

As the consumer goods landscape evolves with growing challenges and opportunities, companies are steadfast in aligning technology, workforce, and processes to create a foundation for agile and efficient operations. This strategic shift will enable them to navigate the dynamic marketplace effectively. The 2025 State of Smart Manufacturing Report is based on feedback from 174 executives across the consumer goods industry in 15 countries, part of a broader global survey by Rockwell Automation which included over 1,500 decision-makers in the manufacturing sector.

For more insights from the complete report, visit Rockwell Automation's official website or access the detailed findings through their press release.