The total addressable market (TAM) for the consumer goods sector in the United States is substantial and growing. In 2024, the consumer goods market’s value added reached approximately $821.5 billion. This figure is expected to grow at a compound annual growth rate (CAGR) of 2.62% from 2024 to 2028, indicating a robust and expanding environment for the U.S. consumer market.
The consumer packaged goods (CPG) sector is set to expand, driven by global population growth and heightened consumer awareness. CPG products, which include everyday essentials, are fundamental to daily life. Unlike durable goods, these items are consumed quickly and must be frequently replaced, ensuring a steady cycle of demand. As the population increases, so does the number of consumers, reinforcing the consistent need for these goods. The U.S. population is projected to experience significant growth, from approximately 332 million people in 2020 to about 389 million by 2050.
Moreover, the rise in consumer awareness, spurred by greater internet connectivity and the pervasive influence of social media, has further bolstered consumer goods sales. These platforms enable consumers to access information easily, encouraging more informed and frequent purchasing decisions.
Although the U.S. market represents a tremendous opportunity for international brands, it can be a very difficult market to navigate. The failure rate of consumer brands entering the market is approximately 80%. Of those brands that do fail, nearly half do so in the first two years of operations. There are many reasons why some brands do not ultimately achieve success in the U.S., a few are highlighted below:
Highly Competitive
The CPG sector is dominated by a few large players, but it also includes numerous smaller companies. The typical U.S. supermarket carries between 40,000 to 50,000 individual products. In addition, the average number of CPG product launches per year exceeds 20,000 across all categories. Consumer brands spend several billion dollars a year on product research and development.
More recently, we have seen significant growth in private label (store brand) products. In 2023, private label brands accounted for 19.6% of CPG dollar sales according to the Private Label Manufacturers Association.The increase in popularity of these items provides direct competition to both established and emerging brands.
Multiple Channels
In addition to online platforms, in the U.S. there are several thousand retail stores selling an array of consumer brands. These include national and regional store chains across multiple channels, including conventional supermarkets, natural/gourmet, specialty, club, convenience, and military commissaries. International brands must also consider the foodservice channel which includes several different types of restaurants, universities, hotel/resort, parks, coffee shops, and workspaces. Brands must employ a well-researched, thoughtful go-to-market strategy in order to successfully navigate each channel and region of the U.S.
Diversity of Consumer Preferences
There is a vast and dynamic diversity of consumer preferences in the U.S., driven by a combination of cultural, generational, geographic, socioeconomic, and lifestyle factors. In addition, each consumer base is influenced by various dietary, sustainability, and health & wellness trends. Consumer brands must be very clear about their target market, how they communicate to these consumers, and how that strategy may change depending on which U.S. region they choose to operate in.
No doubt, entering and succeeding in the U.S. market could be a game-changing initiative for certain international consumer brands. However, a clever, strategic market entry plan must be instituted in order to capture this opportunity. At OmniShore, we have the experience and expertise to help brands realize their full potential in America. Contact Us