6 Ways AI Powers CPG Consumer Insights for Faster Decisions

Your CPG company is drowning in data—and you know it.

SharePoint folders bursting with reports. Vendor dashboards collecting digital dust. Internal drives filled to the brim with spreadsheets that no one opens or even knows exist.

You have so much data scattered across dozens of platforms and hidden folders, and just like 97% of Fortune 1000 companies, you’re investing heavily in data initiatives. 

But, here’s what separates the winners from everyone else: they can turn their mountain of data into a competitive advantage, fast.

While most CPG brands are stuck in collection mode, market leaders are asking—and solving for—a different question entirely: How do we transform and access all of our data into revenue-driving insights that our competitors can’t match? 

The data’s there. The question is whether you’re using it to win.

Winning with data looks like:

• Using CPG consumer insights to create a search engine for your business
• Accessing unified data-driven insights
• Creating an instant knowledge base accessible through quick prompts
• Leveraging AI solutions for CPG to automate market research and boost profits

This shouldn’t sound like a far-future scenario. It’s a reality you can tap into now.

Keep reading to learn:

• What CPG market research is all about
• 7 Types of CPG market research
• How you can harness the power of AI to make futuristic market research your reality today
• Real-world examples of how AI changes CPG market research results

Let’s dive in!

What is CPG market research?

CPG market research is the process of gathering and analyzing data to understand consumer behavior, market trends, and competitive dynamics in your market.

Projected to grow from over $2 trillion in 2023 to around $3.5 trillion by 2032, the global CPG market is thriving. To remain competitive and leverage this growth strategically, your CPG business needs to invest in research.

CPG market research helps brands make informed decisions about:

• Product development
• Consumer behavior
• Pricing
• Packaging
• Distribution channels
• Marketing and advertising strategies

There are multiple ways to analyze consumer behavior and market insights.

7 Types of CPG market research to power your business insights 

CPG consumer insights and market research help businesses grow across multiple verticals. From pricing strategies to the effectiveness of your marketing campaigns—every piece of data becomes priceless. 

Let’s look at different types of CPG market research and ways you can gather data to grow your business.

1. CPG consumer insights research

Consumer insights research focuses on understanding customer needs, motivations, and behaviors. The goal is to go beyond what people buy and uncover why they buy. You want to reveal the emotional, psychological, and cultural drivers behind consumer decisions.

There are many methods for gathering CPG consumer insights, but most brands use:

• Focus groups: Small, guided discussions where consumers share thoughts and feelings about a product, brand, or category.
• In-depth interviews: One-on-one conversations that explore your customers’ attitudes, experiences, and purchasing behaviors in detail.
• Ethnographic studies: Observing consumers in their natural environment, like their homes or workplaces, to see how they interact with products in real life.

What this looks like in practice:

You can use consumer insights research to uncover why consumers prefer certain packaging designs, like resealable pouches vs. boxes. Another common use case is understanding how people actually use your product. This can lead to better product design, messaging, and customer satisfaction. 

A great example of how focus groups and CPG consumer insights research can bring value to your business is Procter & Gamble’s “Swiffer” line of products. In the past, many of their consumers had complained about the inefficiency of traditional mopping and how dirty and messy it was to wring out mops and deal with dirty water buckets. 

They planned to develop a new type of soap, but after analyzing consumer behavior and how they used their product, the company discovered that it wasn’t a new soap people needed, but a better mop. Since then, the product has generated billions for P&G and is, to this day, one of its most successful brands.

2. Product or concept testing

Product or concept testing evaluates consumer reactions to new product ideas, formulations, or packaging before launch. The objective is to identify what resonates with the target audience and reduce the risk of market failure.

Methods you can use to test your product:

• In-home usage tests (IHUTs): Consumers receive a product to use in their everyday environment and then provide feedback on performance, appeal, and usability.
• Central location tests (CLTs): Participants try products in a controlled setting and give immediate reactions, for example, tasting a new cookie brand in a grocery store.
• Online surveys: These are used to quickly collect opinions from a large audience about different product concepts, designs, or benefits.

How to use product or concept testing for your organization: 

A CPG brand may use product testing to compare multiple flavors for a new snack or evaluate different packaging designs to determine which option has the strongest market potential and consumer appeal.

A creative example of how brands can use product testing is PepsiCo’s campaign, Lay’s® Do Us A Flavor™. The company invited people to participate in a contest by suggesting flavors for potato chips. 

Since then, the company has released some of its best-selling flavors like Lay’s Chicken & Waffles, Lay’s Cheesy Garlic Bread, and Lay’s Wavy Fried Green Tomato. All thanks to consumer participation. It might not be a typical example of product testing, but it worked wonders.

3. Brand tracking

Brand tracking monitors brand health over time to assess key indicators like awareness, perception, and loyalty. It helps companies understand how their brand is viewed and how that perception changes in response to marketing efforts or market shifts. Research shows that companies that measure their brand health secure, on average, a 10x higher ROI.

You can track your brand health using the following metrics:

• Brand awareness: Measures how familiar consumers are with the brand.
• Brand favorability: Assesses how positively consumers feel about the brand.
• Net Promoter Score (NPS): Gauges customer loyalty by asking how likely someone is to recommend the brand to others.

Tracking brand health in practice: 

Your company might use brand tracking to determine if a new marketing campaign has improved brand recall among your target audience or to see how recent news or product changes have affected brand sentiment. Let’s say you decide to pivot your snack brand and start offering healthier options. In this case, brand tracking helps you understand how that change has impacted your sales and brand sentiment.

4. Retail and shopper research

Retail and shopper research analyzes how consumers interact with products in-store or online. The focus is on understanding the path to purchase and identifying what influences buying decisions at the point of sale.

Methods you can use to analyze how consumers interact with your products :

• Eye tracking: Monitors where shoppers look on shelves to see what captures attention first. The same can be done for your online store by tracking the sections of your website where consumers spend the most time.
• In-store observations: Researchers watch how shoppers move through a store, what they touch, and how they make decisions.
• Shopper intercepts: Companies conduct short interviews with customers right after they finish shopping to gather immediate feedback on their choices and behavior.

How you can apply it to your business:

You can use this type of research to optimize shelf placement for better visibility or to understand how pricing and promotions impact purchase decisions in actual shopping environments. For example, through shopper research, you might identify that your online store lacks product details, which drives bounce rates.

5. Category and competitive analysis 

Category and competitive analysis explores trends within a product category and benchmarks brand performance against competitors. It helps identify opportunities, threats, and shifts in the competitive landscape. Research shows that using competitive intelligence market research tools to gather competitive insights boosts sales effectiveness by 82%.

Methods you can use to gain a competitive edge:

• Nielsen/IRI scanner data: Tracks sales performance, pricing, and market share across retailers.
• Third-party syndicated reports: These provide industry-wide insights into trends, consumer behavior, and category growth.
• Share of shelf audits: Measure how much shelf space a brand has compared to competitors in retail environments.

What this looks like in practice:

You might use this analysis to understand how market share is shifting or assess how a competitor’s new product launch affects your sales and positioning. For example, if your competitors consistently secure more shelf space, you can identify the reasons and find ways to increase your shelf space.

6. Advertising and campaign effectiveness

Advertising and campaign effectiveness research measures how well marketing efforts resonate with your target audience. It evaluates whether campaigns are achieving desired outcomes like awareness, engagement, and conversion.

You can measure your campaign effectiveness using:

• Message recall: Assesses how well consumers remember the campaign or key messaging.
• Brand lift: Measures changes in perception, awareness, or favorability as a result of the campaign.
• Purchase intent: Evaluates whether the campaign increased consumers’ likelihood to buy the product.

How it works in practice:

A CPG brand may use this research to gauge the ROI of a seasonal campaign or to analyze how ad spend performs across different channels like TV, digital, and social media to optimize future media strategies. For example, after analyzing a marketing campaign for a new product, you might notice that it works better on social media than in print. Using these insights, you can shift focus to social media and reduce marketing spending on print media.

7. Demand forecasting and pricing research

Demand forecasting and pricing research help predict future product demand and evaluate price elasticity to understand how consumers respond to different pricing scenarios. It enables brands to make data-driven decisions about pricing strategy and inventory planning.

You can forecast demand and establish pricing using: 

• Conjoint analysis: Determines how consumers value different product features and price combinations.
• Price sensitivity meter: Identifies the price range consumers consider acceptable and pinpoints the optimal price.
• Simulated test markets: Models real-world buying behavior under various pricing and promotional conditions to estimate potential sales outcomes.

How you can apply it to your CPG business:

Your company can use demand and pricing research to identify the ideal price for a new product variant or forecast how much sales volume will increase from a limited-time discount. It helps balance profit margins with promotional impact.

Let’s say you’re launching a new, low-sugar version of a consumer favorite soda brand. You tested multiple price points through consumer panels and digital retail simulations. Research showed customers were willing to pay more for the healthier option, which led to a more profitable launch.

How does AI improve CPG consumer insights and market research?

Data isn’t just a new currency—it’s the engine behind every winning CPG strategy. But when research lives in scattered folders or inaccessible systems, your teams end up wasting time hunting for documents, duplicating work, or even repurchasing third-party insights they already own.

Many CPG leaders lean on third-party tools to unlock consumer insights—but fragmented solutions often create more friction than value. Manual uploads, custom taxonomies, and on-premise server maintenance introduce security gaps and operational bottlenecks that stall innovation. 

That’s why modern AI solutions that connect to your entire knowledge ecosystem without moving data are the way to go. Let’s walk through the benefits of these AI solutions in the CPG industry.

1. Predictive analytics

The predictive analytics software market is booming—what was a $5.29 billion industry in 2020 is expected to skyrocket to $41.52 billion by 2028. AI-powered CPG analytics use historical sales data, market signals, and behavioral patterns to forecast future demand, optimize inventory, and test pricing scenarios.

With predictive analytics, you can:

• Plan product launches more effectively
• Avoid stockouts or overstocks
• Reduce guesswork in demand planning

However, to access the true potential of predictive analytics, it’s important to have data from multiple channels and business units consolidated in one place. For example, Capacity offers integrated analytics across all your channels. It can collect data from your knowledge base, social media, website, and customer interactions, among others, to give you a broader picture of how your business is doing and what you can expect.

2. Sentiment analysis

The way your customers feel about your brand determines your business’s long-term success. However, gaining a unified view of customer sentiment across social media, marketing campaigns, and product development is almost impossible without the right tools. 

If you’re wondering how to analyze consumer behavior more efficiently, unified AI solutions are the way to go. They give you a deeper understanding of how consumers feel, enabling quicker responses to issues and better fine-tuning of messaging.

By analyzing online reviews, social media, and customer feedback, AI can detect positive or negative sentiment around products, brands, or campaigns. Using these insights, you can adjust your communication or product strategy. 

3. Consumer segmentation

Segmenting customers can help you personalize your products and increase sales. Using machine learning algorithms, AI clusters consumers into segments based on:

• Demographics
• Behavior
• Purchase history

Your brand can tailor campaigns, promotions, and product development to the specific needs of each group, improving relevance and conversion rates.

When thinking about demographics, think about using your data to unlock insights beyond just “Millennials vs. Gen Z”. Instead, get further into the weeds. To paint a picture of what this looks like, let’s look at a great example from Insights To Action, which showcases how you can further segment consumers if you’re in the weight management market:

4. Trend identification

Trend identification is crucial for CPG brands. AI scans massive datasets—from social media to retail data—to spot emerging consumer trends and product innovations.

This way, you can get ahead of trends, develop new offerings faster, and stay competitive in fast-moving categories. For example, you’ve probably noticed how everyone’s drinking matcha lattes lately. In the UK alone, matcha drinks saw a 202% increase in sales during 2023. As a result, many brands introduced their own versions of these drinks or related products like matcha-flavored candies, sodas, ice creams, and snacks.

5. Real-time insights

AI processes data continuously, allowing you to monitor consumer behavior and market shifts in real time. Without the right tools, accessing CPG consumer insights in real time can be a headache. You might get insights into one small portion of your business while completely missing other parts just because you can’t access unified data.

Another problem is that you might have the data, but struggle to make sense of it. Tools like Capacity connect data across all your channels to create your business search with quick access to insights. 

Information that used to take at least 5-10 minutes to find, like sales numbers, is now accessible through quick prompts like, “What were our sales numbers in the second quarter in the LATAM market?” 

The system doesn’t send several unrelated documents that contain a keyword. It answers your question directly and links to sources in case you need to check.

6. Federated search 

Instead of digging through scattered spreadsheets, PDFs, or dashboards, AI-powered federated search pulls insights from multiple sources into one interface. It’s like having one search engine that can simultaneously search across different databases, files, or other information systems. Research shows that 64% of companies that use centralized customer data management report greater efficiency, and 57% of them report business growth.

Federated search saves time, reduces errors, and helps find relevant insights faster, enabling quicker strategic actions and better collaboration.

CPG consumer insights examples to fuel your strategy

Global brands like PepsiCo, TatBrow, and Nestlé aren’t just experimenting with AI—they’re putting it at the forefront of their consumer insights strategy. By embedding AI directly into their research and decision-making workflows, these companies are accelerating growth, spotting trends faster, and making more informed, data-driven decisions.

Let’s break down how each of these CPG leaders use AI to turn fragmented data into actionable intelligence.

PepsiCo’s AI strategy saves them 5,000 hours a year on research

The ability to uncover deep and accurate consumer insights in a matter of minutes is integral to any CPG business’s success. But like any other CPG giant, PepsiCo struggled with a lot of siloed data. Since so much information was scattered across departments, internal drives, and third-party integrations, it was impossible for their Insights and Marketing teams to use that data effectively. 

To solve for this, they partnered with Capacity to implement our Answer Engine® solution. As a result, PepsiCo was able to deploy Capacity’s technology to unify data and turn it into a business-focused search engine.

Since launching, the Answer Engine® has empowered PepsiCo teams across departments to instantly access the information they need—no more digging through folders, chasing down PDFs, or relying on guesswork. It scans millions of pages from both internal systems and third-party sources to deliver precise, contextual answers in seconds.

With the Answer Engine® alone, PepsiCo achieved incredible results:

• Better use of the consumer insights they generate
• More than 438 hours saved each month or 5,000 hours per year
• Monthly user growth of more than 2,500%

AI insights behind TatBrow’s innovative microblading eyebrow pencil 

TatBrow—an Underlining company—is a beauty industry disruptor that sells innovative eyebrow pencils. With a smaller product line, when compared to PepsiCo, you might think there’s little room for innovation. But by using AI across their market research efforts, the company found inspiration for their new and innovative microblading eyebrow pencil. 

In an episode of Shopify’s Masters podcast, Underlining’s Founder, Razvan Romanescu, talked about how analyzing market trends influenced his product positioning strategy. After assessing the competitive market, the company learned that in-office appointments can be expensive and unpleasant, while at-home microblading eyebrow pencils offer an affordable and safe option. As a result, they found a gap in the market and created something to satisfy it.

Using market research, TatBrow uncovered a gap in the highly competitive beauty market and were able to create products to fill that gap (and succeeded as a result!) 

How Nestlé uses AI to test product concepts and packaging

Nestlé is another great example of how a conglomerate with countless household-name brands and legendary products can unify all its data and use it to bring even better products to its consumers. 

The company applies AI in trend identification and predictive analytics for new product development. It personalizes marketing based on consumer behavior across regions with the help of AI. For example, Nestlé uses an internal AI tool to test different product concepts and packaging before market release. This helps the company launch products faster and increase its profits.

CPG consumer insights beyond data

We don’t need to tell you how important data is for CPG consumer insights and market research. But to get the most out of your data, you need to unify it and make it accessible for your team.

Modern AI solutions are among the best ways to maximize:

• Predictive analytics
• Sentiment analysis
• Consumer segmentation
• Trend identification
• Real-time insights
• Federated search 

If you’re tired of the guesswork, digging through endless documents to find information, and asking colleagues to share files, AI-powered consumer insight software is the way to go. 

Capacity’s AI solution for research and knowledge access allows you to:

• Unify data across multiple business units
• Access information through quick prompts
• Get the most out of consumer insights 

Organize and start leveraging your data today!

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