History is clear: Companies that move decisively in periods of disruption pull ahead.

The volatility reshaping the consumer products sector—from shifting consumer expectations and new platforms to portfolio disruption and the rise of AI—is real.

Anchored in these imperatives, six strategic questions can help CPGs sharpen their view of the future and make the bold choices required to spark the next era of growth.

Tattoos and love letters

1. Where can (or can’t) we reignite consumer love?

Insurgent brands have captured almost 40% of growth in US consumer packaged goods, despite accounting for less than 2% of total market share. Private brands’ market share now exceeds 35% in many European countries. In Asia-Pacific, local brands drive nearly 80% of growth. However, after years of cutting costs and deprioritizing innovation while raising prices, many large CPG portfolios are burdened with “zombie” brands and struggling to keep pace. At the core of their competitors’ success is the ability to deliver clearer value to consumers and retailers alike.

To reclaim relevance, CPGs need to reignite love for their brands. As Jen Zeszut, CEO of GOODLES, the insurgent reinventing mac and cheese, puts it, “We measure success in [consumers’] tattoos and love letters on our office walls.”

Most portfolios include three types of brands: heroes driving high consumer engagement, twilight brands that have lost relevance but can be revitalized, and zombies that won’t. In today’s low-growth environment, “maintain” isn’t a plan. Winning companies will make bold portfolio choices: They will intentionally skew resources toward their heroes. They will reinvest in twilight brands to create value through emotional connection, functional superiority, and even life-changing and social impact Elements of Value® like sustainability. And they will actively divest zombie brands.

Up to ...

20

of large CPGs’ revenue comes from zombie brands

30

could be from twilight brands

In 2025, JDE Peet’s, the world’s leading pure-play coffee company, recognized that a long tail (half of its portfolio) was contributing less than 5% of gross profit while brands like 130-year-old Jacobs had become sleeping giants. To reposition the portfolio for growth, JDE Peet’s committed to fewer global brand bets, and Jacobs became a key pillar at the center of its “Reignite the Amazing” turnaround strategy, which included updating the brand’s identity and amplifying the heritage tagline “Wunderbar.” In addition, the company created a joint innovation platform uniting Jacobs with nine local hero brands to accelerate innovation, ensuring it maintained its consumer relevance by tapping into emerging trends such as Dubai chocolate.

Better to best

2. What strengths will we turn into superpowers?

In our analysis, brands that invest in going from better to best in capabilities that create real competitive advantage can unlock 3 to 5 percentage points of sales growth while controlling or reducing costs. More than ever, playing to win means identifying the one or two areas that matter most in your category context and investing to build a defensible moat.

In categories driven by premiumization and new benefits, companies must sharpen their differentiated spikes in consumer engagement. La Roche-Posay and CeraVe have used their dermatological relationships to develop and promote innovative products through exclusive recommendations, while leveraging L’Oréal’s social strengths to amplify share of voice with “skinfluencers”—efforts that consistently earn the brands high visibility in consumer skincare prompts to large language models. Procter & Gamble has infused AI into end-to-end product development, bringing its Pantene Sunkiss Glow SPF hair product to market five times faster at lower cost and establishing itself as an early leader in the market.

By going from better to best where it matters most, brands can generate 3 to 5 percentage points of growth while improving costs.

In more affordability-driven categories, leaders will invest in best-in-class cost positions, which may require a cost advantage of 30% or more when competing against private brands. But cost alone isn’t sufficient. Bain & Company research shows that the most-loved private brands are investing in innovation and consumer relevance, unlocking outperformance on quality and taste, not just lower prices. Even in an affordability game, cost savings must be reinvested to stay relevant.

Retail reimagined

3. How can we collaborate with retailers to reimagine the industry’s future?

The digital era has tilted power toward retailers—moving from “triple net to triple threat”—as they own the data, expect half of future profits to come from “beyond trade” businesses like retail media, and aggressively expand private brands. CPGs must reimagine what could be possible in existing and new channels. Our analysis shows a revenue gap of about 15% opening over the next five years between CPGs that reimagine retail and those that don’t, driven by capturing emerging channel growth, defending trade economics, and differentiating against private label.

In existing channels, it’s a chance to reinvent the aisles, re-earn power at the shelf, and multiply points of interruption. Coca-Cola’s AI-powered SKU recommendation engine, serving fragmented trade in emerging markets, delivers 4% to 6% revenue uplift per store. At the same time, leaders are developing test-and-learn capabilities to lean into newer channels, enabling higher levels of consumer engagement and broader reach. Alongside near-universal presence in existing channels, Coca-Cola continuously tests into emerging channels such as quick commerce and TikTok Shop to understand new customer segments before making bigger investments.

Across all channels and evolving consumer journeys, the critical question is where brands can seize true control points—moments or behaviors in the consumer journey that, once owned, are difficult for competitors to disrupt. For brands, this often means embedding themselves in routines or high-intent moments. A bartender recommendation during a memorable night out, amplified by digital discovery on a consumer’s phone, might create lasting emotional affinity. Or becoming the default choice in a quick commerce app might cement a brand in consumers’ meal preparation routines.

15

estimated revenue gap between CPGs that reimagine retail and those that don’t

Coca-Cola’s new capabilities show how brands can turn these fragmented moments into a more powerful control point: the growth operating model. With Fuelight360 as an enabling capability, as discussed at this year’s CAGNY Conference, the company is moving from static, periodic decisions on growth investment to an always-on, AI-powered model that picks up consumer signals across channels and dynamically shifts spend toward the moments most likely to shape demand.

While retail’s growing strength could be viewed as a threat, winners will collaborate and jointly shape control points—like pricing algorithms and AI-powered negotiation tools—rather than ceding joint power to tech firms.

New frontiers, new penetration curves

4. What’s our next frontier for increasing penetration?

There is ample room for growth, with global consumer spending continuing to rise at 3% above inflation. Yet incumbents are often underexposed to areas of greatest growth—high-velocity categories where consumer needs remain unmet or developing markets where new consumer segments are emerging.

Bold inorganic moves will be critical. Leaders are going beyond traditional scale M&A to access new pockets of growth, but the value captured will depend on matching each move with the right operating model. Acquiring insurgents, for example, can open the door to high-growth segments, but it requires scaling with intent. This means preserving the brand’s consumer connection, speed, and “magic” with thoughtful integration, while selectively adding the parent’s advantages, as Unilever has done with Liquid I.V. in its Beauty & Wellbeing portfolio.

Tapping into emerging markets for growth often demands a different model: local decision rights, local talent, and sharper adaptation to market realities. Yum China’s spin-off illustrates how greater local focus and accountability can unlock value for the parent and the local entity; meanwhile, locally listed subsidiaries in India have outperformed on total shareholder return (TSR) through advantages in speed, governance, and value creation.

Finally, recent megadeals such as Kimberly-Clark’s proposed combination with Kenvue seek to drive growth while unlocking parenting advantages and cost synergies, building scaled capabilities, and opening new profit pools. Value creation will depend on the companies’ ability to translate complementary strengths into faster innovation, deeper consumer relevance, and stronger volume growth.

Repeat M&A leaders significantly outperform, with frequent acquirers improving TSR by 6.9%, compared with a 5.4% average for all consumer products acquirers. M&A winners are clear on their parenting advantage and what that implies for volume growth, not just cost synergies. This informs their deal thesis and integration blueprint as well as their post-acquisition value-creation plan.

25

higher-than-average TSR for frequent acquirers

Scale insurgency

5. How will AI investments unlock our scale insurgency?

Over the last decade, scale and speed have been at odds in consumer products. Scale delivered cost-effective propositions but often at the expense of agility and consumer closeness. Unburdened by complexity, insurgents moved faster, got closer, and took share. Now, AI brings the potential to end this paradox.

Walmart has embedded AI throughout its value chain, end to end, unlocking value at each step while using digital to further scale its “beyond trade” businesses. Amazon aims to double its business without adding human labor. JPMorgan plans to create deep consumer intimacy through “AI concierges.” True scale insurgency—combining the reach of an incumbent with the speed of a challenger—is no longer just an aspiration. It’s achievable.

Yet many consumer goods companies are not yet capturing this value. Tech spending has doubled to roughly 4% of revenue for CPGs since 2020, without consistently delivering bottom-line results. The rising consumption of agentic tokens creates further risks for companies that aren’t diligent about linking agents with a clear business case and outcomes. Too many have pursued AI as a technology initiative rather than as a business transformation.

Companies that see outstanding returns start with the question “Where will AI unlock the most business value and drive real competitive advantage?” That means identifying domains where the tension between scale and intimacy is most acute and hyperfocusing investment on those value pools first. Early results from leading companies show big payoffs on business-driven AI investments: launching new ideas five times faster, ROI uplifts of 10% to 15% on commercial spend, and savings of 5% to 10% in cost of goods sold.

L’Oréal offers a powerful example, embedding AI across its value chain to deliver growth and agility. At the CAGNY Conference, it reported a €1.5 billion investment to build a scalable digital and AI backbone, including AI-powered marketing, omnichannel tools to integrate the customer journey, and personalization with AI beauty agents. It’s already achieving faster speed to market and 10% to 15% marketing productivity gains.

Over the next 10 years, more than $100 billion in US food and beverage profit pools across consumer products and retail is at stake—and companies that capitalize on technology will be best positioned to capture it.

Adaptability and resilience

6. How can we get better at thriving in uncertainty?

Consumer products leaders are navigating macroeconomic volatility, climate change, shifting trade policies, geopolitical disruption, and the industry forces we’ve mentioned. Yet fewer than 50% of CEOs in a recent Bain survey say their companies are ready to adapt.

Thriving in uncertainty means building the organizational muscle to sense when conditions are shifting and respond decisively. Where conviction is high, move with speed. Where it is lower, hedge and keep options open. The edge goes to companies that learn faster, continuously taking in signals, pressure-testing beliefs, and adjusting course.

Every company’s version will look different, shaped by its competitive starting point, its unique strengths, and the specific corners of the market where it has the right to win. But the imperative is the same: Get clear on where the world is headed, build the conviction to act on it, and design the business to adapt as conditions change.

Many of Bain’s leading minds in consumer products, representing hundreds of years of industry experience, contributed to the creation of this perspective. Thanks especially to John Blasberg, Guy Brusselmans, François Faelli, Ken Fraser, Audrey Hadida, Jeroen Hegge, Jorge Rujana, Eileen Shy, Martin Toner, Jean-Charles van den Branden, Richard Webster, and David Zehner.