WITH the campaign season in full swing and the Philippine elections set for May 2025, economic activity is expected to surge, providing a significant boost to the fast-moving consumer goods (FMCG) sector.
According to Worldpanel by Kantar, the heightened economic movement, combined with improved financial indicators, is projected to drive a five percent overall value growth in the FMCG industry this year.
“2025 is shaping up to be a positive year for the FMCG industry,” said Laurice Obana, shopper insights director at Worldpanel by Kantar.
“With rising consumer spending fueled by election-related activities and economic improvements, businesses must capitalize on this momentum by understanding what shoppers truly need and value,” she added.
Obana noted that the election years have historically seen increased in-home FMCG purchases across various consumer segments.
“During the past few elections, we observed growth in FMCG mega-sectors such as food, beverage, personal care and household care. This growth trend is particularly evident among mid- to lower-income Filipinos,” she said.
Out-of-home spending
Beyond in-home consumption, Kantar anticipates an increase in out-of-home FMCG purchases as public gatherings and social activities intensify in 2025.
Data from the second quarter of 2024 already showed that 38 percent of Filipino families’ FMCG expenditures were allocated to out-of-home consumption. This trend is expected to gain further momentum with the increased mobility of consumers.
A notable development in Filipino shopping habits is the rise of “third spaces” – accessible, neutral locations apart from home and work. These include malls, markets, places of worship and neighborhood stores. Kantar’s research indicates that 30 percent of Filipinos frequent such spaces, with six in 10 visiting at least once a week.
“One out of three shoppers spends at least two hours in these areas, presenting a prime opportunity for brands to engage consumers through strategic placement and marketing,” Obana explained.
Shopping behavior
Filipinos continue to embrace an omnichannel approach to shopping, purchasing from traditional sari-sari stores, supermarkets, online platforms and neighborhood discount stores.
Kantar reports that sari-sari stores alone account for 40 percent of total FMCG sales. Additionally, discounters, online shops and mini-marts are gaining traction as consumers seek convenience and value.
Recognizing these shifting preferences, major retailers in the country are adapting by expanding their presence across multiple formats. This includes the rise of mini-marts and discounters, alongside enhanced online shopping platforms, to cater to the evolving demands of Filipino consumers.
Moreover, with Generation Beta on the horizon, the focus on understanding younger consumers remains crucial.
Generations Z and Alpha, which currently comprise 62 percent of the Philippine population, are poised to shape the future of the FMCG industry. Brands and retailers must stay ahead by aligning with their preferences and evolving consumption patterns.
While value remains a key driver in Filipino purchasing behavior, affordability alone is no longer enough.
Manufacturers and retailers must go beyond pricing strategies to deliver convenience, a comprehensive product range, impactful marketing and a seamless shopping experience. / KOC