Q1 2026 may mark the beginning of a fundamental shift in how growth is created.

The winners are making deliberate choices around portfolio, geography and penetration, not simply lowering prices.

The question is no longer whether volume matters, but how to build it sustainably.

The beginning of a strategic reset

For the first time in almost two years, something meaningful is happening in the CPG industry.

After a relatively flat 2024 and four consecutive quarters of declining volume throughout 2025, the largest global CPG companies are finally showing a noticeable recovery. Across the eleven companies analyzed (excluding L’Oréal, which does not disclose volume data), average volume growth exceeded 1% in Q1 2026 while average organic growth remained at a healthy 3.1%, suggesting that companies are beginning to replace pricing-driven growth with healthier, volume-led expansion.

On the surface, this may look like simply a stronger quarter. In reality, it could represent the beginning of a much deeper strategic shift.

More importantly, it may signal that the industry’s largest players have finally acknowledged a fundamental truth: pricing alone cannot sustain long-term growth, whether this shift is internally driven or triggered by financial market pressures.

Inflation changed the industry’s definition of growth

The inflationary years fundamentally reshaped how many CPG companies approached growth.

Between 2022 and 2025, pricing became an extraordinarily powerful lever. Companies successfully offset unprecedented increases in raw materials, logistics and labor costs by implementing multiple rounds of price increases, often delivering record organic growth while protecting margins.

Financially, the strategy worked. Culturally, however, it also changed the way many organizations thought about success. Revenue growth has increasingly become the headline KPI. Value market share became the preferred measure of commercial progress. Quarterly discussions naturally focused on pricing execution, revenue management and margin protection. Meanwhile, two of the industry’s most fundamental measures, volume and penetration, gradually lost strategic prominence.

Inflation, in many respects, gave the industry the illusion of almost unlimited top-line growth through pricing. That illusion lasted until consumer behavior began to change. As affordability deteriorated and household budgets tightened, consumers became increasingly price sensitive. Purchase frequency declined across multiple categories. Consumers traded down to private labels, smaller local brands and alternative channels. In many cases they simply eliminated purchasing occasions altogether.

The consequences became increasingly visible during 2025, when most of the large multinational experienced persistent volume declines despite still reporting positive revenue growth. The industry’s growth engine had become increasingly dependent on pricing while its underlying consumer base was slowly weakening.

Q1 2026 suggests companies have recognized the problem

The most encouraging aspect of Q1 is not the return of volume itself but it is the number of companies now actively pursuing it.

Only a year ago, just four of the largest CPG companies consistently reported positive volume performance. In Q1 2026, eight out of the twelve companies analyzed delivered positive volume growth, with AB InBev, P&G and Colgate-Palmolive joining companies such as The Coca-Cola Company, Unilever, Danone and Nestlé.

This reflects an industry gradually rediscovering that volume is not simply another KPI but it is the physical manifestation of penetration. Every additional unit sold represents another purchasing act, another household recruited, another consumption occasion captured, another opportunity to reinforce brand relevance.

Ultimately, volume remains the strongest indicator that a company is genuinely expanding its consumer franchise rather than simply extracting more value from existing buyers.

Volume cannot be promoted into existence

One of the recurring lessons emerging from the Q1 results is that companies are not growing volume through promotions alone but they are making deliberate strategic choices.

Three themes consistently emerge.

First, portfolio focus.

Successful companies are becoming increasingly selective about the categories, brands and pack formats they invest behind.

Rather than attempting to maximise breadth, they are concentrating resources where consumer demand, differentiation and scalability are strongest.

Second, geographic prioritization.

Growth is increasingly concentrated in markets where demographics, affordability and category development remain favourable. Rather than treating every geography equally, leading companies are allocating disproportionate investment behind higher-potential regions.

Third, cultural relevance.

Brands that create stronger emotional connections with consumers increasingly generate more purchasing occasions, improving both penetration and consumption frequency.

Perhaps no company illustrates this better than The Coca-Cola Company.

Coca-Cola shows what the new growth playbook looks like

Among all companies analyzed, Coca-Cola provides perhaps the clearest evidence of how the industry’s growth model is evolving.

Only two years ago the company represented one of the strongest examples of pricing-led expansion. Its extensive portfolio rationalization and disciplined revenue growth management significantly improved price-per-liter across the business, allowing Coca-Cola to become one of the industry’s strongest top-line performers.

The 2025 results perfectly illustrated this strategy. Organic growth reached an exceptional 12%, yet approximately 93% of that growth came from value while only 7% came from volume.

Many companies would have continued following that formula, instead, Coca-Cola recognized its limitations surprisingly early.

Q1 2026 tells a completely different story. Organic growth remained outstanding at around 10%, but this time approximately 80% of the growth came from volume rather than pricing.

The interesting question is not what changed but how it changed.

Portfolio architecture became a penetration tool

Rather than using portfolio management primarily to optimize margins, Coca-Cola increasingly used it to recruit consumers.

The company expanded its pack-price architecture with locally relevant formats capable of addressing different purchasing occasions, affordability needs and retail environments.

Mini cans launched through the convenience channel in the United States provide perhaps the best example. Rather than simply offering a smaller package, they lowered the entry price, expanded affordability, increased impulse purchasing and opened new consumption occasions.

Elsewhere, Coca-Cola introduced locally relevant pack formats, bundled offers, lightweight bottles and country-specific innovations, all designed around one objective: increasing consumer recruitment while maintaining pricing discipline.

The recent launch of Coca-Cola Black follows the same philosophy.

By removing sugar and caffeine while adopting a premium black identity, the company is attempting to create entirely new evening consumption occasions rather than merely competing within existing ones.

Cultural relevance creates consumption occasions

Equally interesting is Coca-Cola’s renewed emphasis on cultural relevance.

Rather than treating marketing as communication alone, the company increasingly uses local culture to create reasons to consume.

Campaigns linked to Ramadan, Chinese New Year, Carnival, March Madness and numerous local celebrations transform the brand into part of culturally meaningful experiences.

One particularly elegant example combines both portfolio architecture and cultural relevance.

The limited-edition mini-can collection celebrating individual U.S. states simultaneously leverages an affordable format while creating collectability, conversation and emotional engagement.

The result is not simply higher awareness, but it is more purchasing occasions and ultimately, more penetration.

Balanced geographical execution

Coca-Cola’s geographical performance reinforces the same lesson. As a Global business the company covers a high number of geographies but with a mix of different brands from the big blockbuster to some more local jewels.

Unlike many competitors, volume growth was broad-based across all four major operating regions, with particularly strong momentum in North America.

This is particularly significant. North America remains one of the most challenging consumer environments globally, characterized by slowing consumption, increasing price sensitivity and intense competitive pressure.

If Coca-Cola can successfully build volume in North America, it demonstrates that penetration growth remains achievable even under difficult market conditions.

Other CPG leaders are reaching similar conclusions

Although each company follows its own strategy, remarkably similar patterns emerge across the quarter.

Unilever continues demonstrating the value of disciplined focus. Its strategic decisions to separate Ice Cream and progressively simplify its Foods portfolio are creating a more concentrated business centered on higher-growth, higher-margin categories. At the same time, increased investment behind Power Brands and the company’s strong exposure to emerging markets continue to support balanced value and volume growth. Emerging markets are currently delivering almost six times the growth of developed markets, highlighting the importance of deliberate geographic prioritization.

ABInBev perhaps provides the most symbolic turnaround. After eleven consecutive quarters of declining volume, the brewer finally returned to positive volume growth. The recovery appears closely linked to deliberate portfolio choices: stronger investment behind megabrands together with rapid expansion of no-alcohol beer and beyond-beer platforms, both substantially outperforming the core business and capturing entirely new consumer occasions.

Nestlé illustrates another important lesson. Rebuilding volume is an organizational transformation.

Following several years during which pricing became the dominant growth driver, the company progressively lost purchasing occasions across parts of its portfolio as competitors, local brands and private labels expanded their presence.

Re-establishing Real Internal Growth (RIG) as one of the company’s principal strategic metrics went through multiple leadership transitions and several years of changing internal culture and perspective. The encouraging improvement now visible demonstrates that rebuilding penetration demands persistence, organizational alignment and long-term commitment rather than short-term commercial programs.

The beginning of a different growth philosophy

Q1 2026 should not be interpreted as the end of the industry’s volume challenge. One quarter does not reverse several years of structural change.

What it does suggest, however, is that the industry’s largest companies are beginning to rethink the very foundations of growth.

For almost three years, inflation allowed pricing to substitute for penetration. The strategy generated attractive financial performance but gradually weakened consumer recruitment, purchasing frequency and ultimately long-term resilience.

The companies showing the strongest momentum today appear to have recognized that sustainable growth cannot be built on pricing alone. They are making difficult portfolio decisions, prioritizing geographies with the greatest long-term potential, redesigning pack-price architecture and investing in cultural relevance.

Above all, they are placing penetration back at the center of their growth strategies. Because volume does not increase simply because companies decide to sell more products.

Volume grows when companies deliberately create more reasons, more occasions and more opportunities for consumers to choose their brands.

That may ultimately prove to be the most important lesson emerging from Q1 2026.

Turning penetration into a growth strategy

Recognizing that penetration matters is relatively easy. Building a business around it is considerably harder.

Penetration is not the result of one initiative or one successful innovation. It is the outcome of a series of deliberate strategic decisions that determine whether a brand recruits more consumers, creates new purchasing occasions and expands its relevance over time.

This is why, at Sevendots, we developed our Penetration Decision Framework.

The framework helps companies identify where the biggest penetration opportunities lie and, more importantly, which decisions need to be made to unlock them. It provides a structured path to prioritize growth opportunities and align the organization around the choices that matter most across four dimensions:

• Portfolio: Which categories, brands, innovations and pack-price architecture can recruit more consumers and occasions?

• Geographies: Where should investments be concentrated to maximize long-term penetration?

• Channels: Which channels and shopping missions offer the greatest opportunity to expand reach?

• Consumer relevance: How can brands become more meaningful by better addressing evolving needs and local cultural contexts?

The result is not simply a list of growth initiatives, but a clear roadmap that links strategic choices to penetration, volume and ultimately long-term value creation.

The encouraging Q1 2026 results suggest that many leading CPG companies have already started this journey. Those that sustain their momentum will likely be the ones that embed penetration into every major commercial decision—not simply as another KPI, but as the organizing principle behind portfolio, innovation, channel and geographic strategy.

At Sevendots, helping companies make those decisions is at the core of what we do.

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<sup>Sources:
1. Sevendots Top CPG companies ongoing monitoring, 2026
2. Companies financial reports, 2026
3. Companies earnings calls and press releases, 2026</sup>

The Context

In today’s world, attention is more fragmented than ever, and brands are constantly searching for new ways to grow without losing their ethos. Traditional campaigns may refresh awareness, but partnerships, when done with intention, can become one of the most effective ways to expand reach, attract new audiences, and strengthen equity by borrowing complementary strengths.

When designed strategically, partnerships can serve three very different purposes: they can help a brand reach new audiences, deepen engagement among existing ones, or combine complementary strengths that elevate both sides. For partnerships to work, it all depends on a single condition: clarity of purpose. When that clarity is missing, collaborations risk confusing consumers or weakening the brand’s identity. When it is present, partnerships can become a disciplined and creative engine for growth.

Although most of the examples in this article come from categories outside CPG, the underlying principles apply directly to it. In fact, CPG often lags other industries in partnership innovation, relying mostly on limited-edition flavors or tactical collaborations. The opportunity ahead is to borrow with pride from more advanced categories such as fashion, technology, sports, and payments, and translate those learnings into long-term platforms rather than momentary activations. The benefit for CPG brands is clear: the same three paths can unlock penetration, deeper loyalty, and renewed meaning when applied with discipline and imagination.

Among the three paths, the third is often the most transformative. It is where two brands combine different strengths to create something neither could achieve alone. New product lines, new categories, and even new business models emerge when brands complement each other naturally. These equity-building partnerships show how rational trust and emotional meaning can coexist—and why the best collaborations are rarely about reach, but about reinvention.

Path #1: Expanding to new audiences

Growth in mature categories almost always comes from attracting new buyers.

Partnerships can accelerate this process by letting a brand borrow credibility from a trusted name that already connects with the desired audience. Consumers transfer trust from one brand to another, making trial both faster and more natural.

Some brands typically struggle with younger groups, so it is common to see partnerships trying to gain some of the point-of-market-entry consumers. Although not everyone does it right, here are a couple of examples that were very successful.

The collaboration between Crocs and the anime franchise Naruto is a clear example. Crocs, long associated with comfort and utility, entered the world of fandom and self-expression through limited-edition character designs and collectible “Jibbitz.” Each release sold out within hours. The brand saw a surge in online searches and social mentions, and overall revenue grew by thirty-three percent in 2023, partly driven by these collaborations. Crocs, which in the past could not win among some generations, has lately been able to remain true to its playful and customizable personality while opening the door to a younger, culture-driven community.

An example within CPG can be found in Oreo’s collaborations with artists such as Post Malone and Selena Gomez. The Oreo versions were created by the artist, and the name of the artist were bigger than the Oreo logo in the package. Net, these partnerships were very successful attracting new buyers to the franchise while also creating a spike in relevance among younger fans.

A more unexpected case comes from Louis Vuitton and Supreme. What began as a provocative meeting of luxury and streetwear quickly became a cultural phenomenon. The joint collection sold out instantly and contributed to a seventeen percent sales increase for LVMH’s Fashion and Leather Goods division that year. For Louis Vuitton, the partnership brought credibility among younger consumers who valued creativity over tradition. For Supreme, it provided entry into the world of luxury. What might have seemed like opposite worlds revealed themselves as two expressions of craftsmanship and confidence.

Expansion succeeds when the new audience sees the partnership as additive, not opportunistic.

Path #2: Maximizing within the same audience

When two brands share a tribe, partnership turns presence into belonging.

Some partnerships focus less on new audiences and more on deepening the brand’s role in the lives of those it already serves. When two brands share a similar consumer base, they can work together to create richer experiences that increase frequency, loyalty, and cultural relevance.

The collaboration between Nike and Spotify illustrates this perfectly. Nike’s mission to inspire movement and Spotify’s ability to power that movement made them natural allies. By integrating playlists and training challenges, they turned workouts into multisensory rituals. The partnership led to higher engagement across both platforms and increased completion rates for Nike Training Club sessions. It was not about attracting new users; it was about becoming indispensable to existing ones.

A broader version of this synergy is the long-term alliance between GoPro and Red Bull. Both brands speak to adventure seekers but from different angles: GoPro provides the camera, Red Bull provides the stage. Together they built a global ecosystem of extreme-sports content that redefined how adrenaline is filmed and shared. GoPro’s revenues surpassed 1.6 billion USD at the height of the collaboration, while Red Bull’s sales grew past six billion cans annually. Rather than chasing new audiences, they deepened ownership of a cultural territory.

Path #3: Complementing equities and leveraging strengths

When one brand’s strength fills another’s gap, both become stronger.

The third path to growth involves the most interesting route: combining different types of strength between brands that partner to complement one another. Some brands bring rational credibility; others bring emotion and cultural energy. When the two come together, they can elevate each other’s meaning and create entirely new forms of relevance.

The collaboration between IKEA and LEGO demonstrates this beautifully. Their BYGGLEK collection of boxes—part storage and part play surface—sold out upon launch and later became a permanent product line. IKEA contributed practicality and design discipline, while LEGO added imagination and family warmth. The result was an idea that felt inevitable: organization and play, united in everyday life.

Another illustration is the partnership between Microsoft and the NBA. By applying Microsoft Copilot technology, the league offered fans data-rich, personalized viewing experiences that brought analytics to life. Microsoft gained emotional connection with younger, sports-focused audiences, while the NBA enhanced its reputation for innovation. Engagement in the NBA app increased by double digits in 2023, and Microsoft’s image evolved from corporate and functional to human and culturally fluent. This was not about co-branding logos; it was about blending intelligence with emotion.

A striking recent example of complementary equities is Y-3, the enduring partnership between Adidas and Japanese designer Yohji Yamamoto. Originally launched in 2002 as an experiment in fusing sportswear and avant-garde design, Y-3 has evolved into a full expression of fashion performance. What began as an aesthetic collaboration is now reshaping an entire category. In the 2024 and 2025 ATP seasons, most Adidas-sponsored tennis players, including several top-ranked men and women, have taken the court wearing Y-3 instead of the traditional Adidas line. This shift signals more than a design preference; it marks the arrival of a new era where performance and style coexist seamlessly. Y-3 gives Adidas a new visual and emotional language, one that elevates tennis from functional gear to fashion expression, while Yohji Yamamoto gains global reach and cultural relevance in a sport long defined by convention. This partnership shows how innovation and artistry merge to create not just a new product line but a new category where sport becomes an act of style.

Perhaps the most systemic example comes from the world of payment networks, where collaboration is not a novelty but a defining feature of the business model. Brands like Visa and Mastercard are experts in co-branding since their logos rarely appear alone. Whether it is a credit card issued by a bank, a digital wallet using their payment rails, or a major sports or music sponsorship such as the FIFA World Cup or the Grammy Awards, these partnerships demonstrate how functional trust and emotional connection can coexist.

The network provides the infrastructure that guarantees security and reliability, while the partner brand—whether a bank, an app, or an event—adds personality, aspiration, or local relevance. Together they create value that is both rational and emotional. It is a constant reminder that in payments, credibility is built on the invisible, but connection is built on the emotional layer of partnership.

Growth without distortion

No matter which route, a brand partnership takes, expanding to a new audience, maximizing within an audience, or complementing equities, the goal is always to stretch intelligently without losing clarity. The strongest partnerships feel like natural evolutions, not forced experiments. They build on the brand’s existing truth while opening it to new expressions and audiences.

Growth achieved in this way is both creative and disciplined. It respects the brand’s essence while allowing it to evolve alongside culture. In a marketplace that rewards novelty but values authenticity, the brands that master this balance will continue to grow confidently, clearly, and without distortion.

In the end, great partnerships are not only a way to grow faster; they are a way to grow truer to what the brand can become.

At Sevendots, we help brands identify which of the three paths best unlock their next wave of growth and design partnerships that stretch the brand with clarity rather than compromise.

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Sources:

• Crocs x Naruto: https://www.highsnobiety.com/p/naruto-crocs-collab-2024/

• LVMH x Supreme: https://ww.fashionnetwork.com/news/Lvmh-scores-15-rise-in-total-revenues-in-first-half-of-2017,854385.html

• GoPro x RedBull: https://www.reuters.com/article/technology/red-bull-deal-gives-gopro-wings-idUSKCN0YF2IZ/

• IKEA x Lego: https://www.ikea.com/us/en/files/pdf/35/cf/35cf8a5c/bygglek_press_release.pdf

• Microsoft x NBA: https://www.microsoft.com/en/customers/story/859765-nba-media-entertainment-azure

• Adidas x Y-3: https://news.adidas.com/racket-sports/y-3-reimagines-tennis-style-with-disruptive-new-performance-collection-and-striking-campaign-featuri/s/8050b2e2-b331-48bb-9625-d005fa57810e

• Mastercard x Grammy Awards: https://www.grammy.com/news/2024-grammys-brands-partners

The real opportunity is not where the category is big but where it is small.

Penetration growth will come mainly from creating new buyers, not fighting for the existing ones.

Slowing volume growth, untapped penetration opportunities

Large multinational CPG companies are facing a structural challenge: volume growth is slowing, a pattern observed in our ongoing analysis of the top global industry players.

In many cases, the issue is not brand strength. Nor is it portfolio breadth. The real constraint is penetration.

Across markets, most global brands still reach only a fraction of potential buyers. If volume equals penetration × frequency, and frequency growth is structurally limited, then penetration remains the most powerful lever for sustainable expansion as confirmed also in our recent study on the topic. In today’s environment, growth is no longer primarily about winning share — it is about expanding the pool of buyers.

Traditionally, companies have relied on three pillars to grow penetration:

1. Portfolio strategy

2. Channel development

3. Geographic expansion

It is the third pillar, geographic expansion, that now deserves a fundamental rethink.

The traditional model: enter where the category is already sizeable

For decades, geographic expansion followed a relatively straightforward logic:

The bet was simple:

Large market + strong brand + heavy SOV = assured share gains.

This model worked. Many global icons scaled precisely this way. A brand like Oreo expanded globally through a highly standardized model, often achieving modest share in each geography, but creating massive scale through breadth of presence.

Oreo benefits from the consolidation of moderate market share across 200 countries

Besides US and China, Oreo generally has a single digit market share in the cookie category across a very high number of geographies.

The underlying assumption was that market maturity reduced risk. If the category is big, consumers already understand it. You just need to win them over.

But that equation is becoming less reliable.

Why the ROI of the traditional model is declining

Two structural shifts are changing the economics of expansion:

1. Media fragmentation makes effective SOV more complex and/or expensive.

Reaching dominance is harder when attention is scattered across platforms and formats.

2. Meaningful differentiation is increasingly difficult to sustain.

Insurgent brands and growing private labels fragment the offer. Innovation cycles are faster. Competitive imitation is quicker. Distinctiveness decays more rapidly.

As a result, the classic formula, enter big markets, outspend, out-differentiate, is delivering lower ROI than it did 10 or 20 years ago. Growth is increasingly competed for, rather than created.

This doesn’t mean the model is obsolete, but it does mean it is no longer sufficient.

The alternative: expand where the category is still underdeveloped

There is an alternative path, one less explored by large multinationals, that shifts the game from competing for existing demand to actively creating new demand.

Instead of entering where the category is already strong, companies can target geographies where the category is still underdeveloped.

In this model, the objective shifts:

From stealing share – To building the category

The strategic focus changes accordingly. Rather than investing primarily in brand differentiation, the emphasis moves to:

• Category education

• Usage expansion

• Cultural embedding of the need state

• Prioritizing lower cost targeted engagement channels, including influencers

• Removing barriers to entry

In short: grow penetration by growing the market itself. This approach is based on a simple premise: those who build the category are best positioned to capture its growth.

Higher risk but potentially higher return

This alternative model carries higher initial risk as category demand is uncertain and must be developed. Infrastructure may be weaker, requiring additional investment to enable category development. Overall, the short-term ROI is lower, and the payback periods are longer.

However, the upside can be structurally stronger. When a company helps build the category the competitive intensity is initially lower and private label pressure is limited. At the same time brand leadership can become structurally embedded as loyalty and mental availability can be established earlier.

While the traditional approach may still generate more attractive short-term returns, its efficiency is declining.

The “category building” approach, though slower, can generate disproportionate long-term value, especially for companies able to deploy scale, patience, and system-level capabilities.

In other words, the model trades short-term certainty for long-term structural advantage.

Penetration is the strategy — Geography is the lever

From a penetration perspective, the question becomes:

• Are you competing for buyers in mature demand pools?

• Or are you creating pools of new buyers altogether?

Geographic expansion is no longer just a market selection exercise. It is a strategic choice between:

• Share competition in developed categories - which is getting close to being a costly zero sum game

• Addressing new demands in underdeveloped ones – driven by sociodemographic development or by establishing new occasions and behaviors.

For CPG companies seeking sustainable volume growth, the second path may increasingly represent the next true penetration frontier.

From strategy to execution: how to identify where to play

Translating this into action requires a different way of assessing geographic potential.

The traditional mechanisms remain in place and don’t go away: identifying and then moving into geographies where penetration levels, and resulting market size and trends, are already attractive, checking the commercial conditions for doing business and assessing the retail and media landscape to successfully break in.

However, an additional and increasingly valuable lens takes into consideration category expansion potential and associated levers where current penetration levels are relatively low.

For example, consider the following:

In East Asia, roughly 90% of people do not use deodorants. This is partly due to genetic factors that reduce body odor. However, consumption is not purely functional, it is also cultural.

As norms evolve, new usage behaviors could emerge. Companies that proactively shape these behaviors may unlock significant long-term penetration growth.

In Brazil 23% of individuals are heavy snackers (eating three or more snacks daily) while 51% are light users and about one quarter of the population does not engage in regular snacking at all. With the right offer, occasional/light buyers could represent a significant growth opportunity, given the lower barriers to consumption. This represents both a frequency opportunity and a penetration play across new consumption occasions.

Essentially, the model to assess penetration and volume growth potential becomes:

Categories are structurally composed of three groups: regular buyers, occasional buyers, and potential buyers among non-users. The job to be done for each group is different:

• Regular buyers – attract them through meaningful differentiation, mental and physical availability

• Irregular buyers - raise frequency unlocking new motivations and occasions

• Potential buyers – enter their consideration set by tapping into unmet needs or redefining the category equity.

The size of each group varies significantly by category and geography and defines the true growth opportunity.

This perspective is increasingly shared by leading industry players. A recent statement by Ramon Laguarta, CEO of PepsiCo, speaking during the Q4 2025 earnings call further supports the idea of looking beyond current category buyers:

“We’re thinking about growth in two main dimensions. One is making sure that our core brands continue to grow. Then we’re innovating in the periphery of the category where we’re seeing growth: there are consumers out there that are looking for us to give them excuses to come into the category.

These are mainly younger households. We’re thinking about innovation from a category-building point of view, bringing more consumers into the category, and obviously, driving frequency of the category.”

To tap into the two potential pools:

• Digital media and marketing innovation is much less risky, faster, and less expensive than new product development

• New product development is more likely to disrupt and bring new users into the category but high risk, high investment, and takes 24-36 months.

A resulting growth program should consider two dimensions:

• Short-term ROI/Growth - Optimize/innovate creative, content, and messaging to drive increased usage with lighter users

• Long-term ROI/Growth - Identify and build ideas for disruptive innovation that will bring in new users.

How to get started on this new path

Sevendots has developed an original approach with AI-powered Penetration Accelerator™ to profile and tap into both category light users/irregular buyers and category non-users/non-rejectors,

• Qualifying the different segments

• Identifying ways of engaging them

• Quantifying the incremental volumes at play.

Below there is a classic example of high penetration but structurally constrained volume.

Unlocking your next penetration frontier

In closing, if your brand or portfolio growth has slowed and global penetration has flat-lined or even declined recently, our team at Sevendots can help you think through a new growth strategy unlocking new sources of penetration by uncovering and prioritizing innovative geographic expansion opportunities for the next decade and beyond.

We help you driving penetration by identifying where to compete, where to create demand, and how to do it.

Our senior multidisciplinary team combines strategic rigor with hands-on execution to identify and activate high-potential geographic expansion opportunities based on optimized penetration.

Contact us to explore how you can unlock new sources of penetration and drive sustainable growth through smarter geographic expansion.

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Sources:

• Sevendots Top 11 and Top 35 CPG companies Monitoring, 2026

• Sevendots, Penetration Under Pressure: Evolving the Core Driver of Brand Growth, Growth Series, 2025

• East Asia deodorant: NBC News, June 2024

• Brazil snacking: Statista 2025,

• Italy candy market data: CAOBISCO, BVA Doxa, CREA/EFSA

• PepsiCo Earnings call, February 2026

This is not only visible in company results, but even more clearly when comparing large CPG players to the broader market.

Volume: the missing engine of value creation

In 2025, so far the average volume growth of the world’s largest CPG companies remains negative. Among the top 11 global players, volume is down on average by –0.6%, while across the broader group of the top 34 companies the decline deepens to around –1%.

By contrast, NIQ data shows that the overall CPG market is still growing in volume by +0.9% globally, highlighting a persistent and structural gap between market dynamics and the performance of the largest manufacturers.

This gap is not cyclical. It reflects a progressive loss of penetration and relevance of large brands versus local players, insurgent brands and, most importantly, Private Labels. After a period of stagnation, Private Labels has started to grow again in many geographies, benefiting from affordability, sharper value propositions and faster adaptation to local needs. In parallel, a number of retailers whose business model is not reliant on major branded products – Aldi & Lidl for example – have been gaining ground with consumers.

The crucial role for penetration

If volume is the outcome, penetration is the mechanism. Sustained volume growth can only be achieved by reaching more households, expanding usage occasions and scaling brand assets across geographies, channels and categories.

This requires deliberate trade-offs. Scaling a brand is not about doing more everywhere, but about making clear choices on:

• where a brand has the right to win,

• which channels genuinely expand reach rather than dilute focus,

• and which categories allow the brand to stretch its territory without losing meaning.

At Sevendots, we have developed a Penetration Growth Framework precisely to address this challenge. It helps brands understand how penetration drivers evolve at different stages of brand development, and how to arbitrate between focus and expansion, scale and relevance, short-term gains and long-term value creation.

Geography matters: a tale of diverging consumers

NIQ data, based on comparing Year End June 2025 with 2024 on 54 markets, shows stark contrasts across regions.

CPG volumes in North America have been flat in 2025 but volume growth rates in LatAm and MEA have continued to be particularly dynamic

Total CPG Volume Growth per Geographic Region Year Ending June 2025 vs 2024

Source: NIQ, Total CPG across global 54 markets, 2025

North America volumes are essentially flat at –0.3%, confirming a deep structural challenge. Affordability is becoming a dominant decision factor for a growing share of consumers.

As Susan Morris, CEO of Albertsons, recently stated: “In Q3 shoppers traded down to smaller packages and private labels, used more coupons and stuck to lists.”

This behavior directly penalizes brands that rely on premiumization and pricing rather than penetration and accessibility.

Latin America, on the contrary, stands out with +3.1% volume growth, the strongest performance globally. Importantly, large CPG multinationals tend to be relatively strong in this region in terms of revenue incidence, meaning they are well placed to benefit from this dynamic. Notably, LatAm combines strong volume growth with strong price growth, showing that affordability does not automatically mean margin dilution when propositions are well calibrated.

Middle East & Africa also show solid momentum on both volume and value, while Europe and Asia-Pacific sit in between, with more heterogeneous patterns.

Categories tell an equally polarized story

Looking across categories, volume performance reflects both consumer shifts and pricing elasticity.

Global volume growth has been particularly challenging for Alcoholic Drinks and Snacks, more positive for Health & Beauty, Beverages and Food

Total CPG Volume Growth per Category Year Ending June 2025 vs 2024

Source: NIQ, Total CPG across global 54 markets, 2025

Alcoholic Drinks are among the most impacted, with volumes down –1.5%. This decline is structural, driven by changing consumption habits, particularly among younger consumers who drink less and drink differently. Large players are reacting by reshaping portfolios around premium-and-less-occasions strategies, while accelerating investments in non-alcoholic beer, fermented drinks and adjacent soft drink categories.

Snacks & Confectionery volumes are down –0.8%, heavily affected by cocoa cost inflation. Over the past years, companies have passed these costs on to consumers through pricing, boosting value growth but eroding volume and frequency. Big manufacturers need to rethink their over-reliance on cocoa trying to rebalance their portfolios from chocolate-based products to other recipes still able to sustain a good price per kg.

Health & Beauty clearly stands out, with +2.1% volume growth, reflecting rising consumer attention to wellbeing, personal care and preventive health. This is one of the few categories where large CPG companies are, in some cases, keeping pace with the market. Unilever, for example, delivered +1.9% volume growth in Beauty & Wellbeing in Q3 2025, almost fully aligned with the segment’s underlying growth.

Value grows, but often at the expense of volume

Across categories, NIQ data shows that value growth averages 2.6%, roughly 2.5 times volume growth.

Value growth for the different categories is 2.5x volume development

Total CPG Value and Volume Growth per Category Year Ending June 2025 vs. 2024

Source: NIQ, Total CPG across global 54 markets, 2025

Health & Beauty is again the most balanced category, with value and volume contributing equally to its 4.2% overall growth. At the opposite end, Snacks & Confectionery and Health Care show the strongest imbalance, with pricing increases compensating, and arguably impacting, volume decline. Alcoholic Drinks sit in the middle, where value barely offsets volume losses, resulting in a marginal +0.2% overall growth.

Geographically, Latin America and MEA are the only regions where value and volume grow in tandem, reinforcing the idea that penetration, affordability and relevance can coexist with healthy value creation.

LatAm and MEA show the strongest dynamic both in value and volume growth

Total CPG Value and Volume per Geographic Region Growth Year Ending June 2025 vs. 2024

Source: NIQ, Total CPG across global 54 markets, 2025

The strategic implication: scale needs to be earned again

The evidence is consistent and increasingly hard to ignore: volume is the key engine of sustained value generation in the CPG industry, and penetration is the primary lever through which volume can be rebuilt and defended. Price and mix can support growth for a time but without expanding or at least maintaining reach, scale advantages erode, brand relevance weakens and long-term value creation is structurally compromised.

Re-anchoring growth strategies on volume requires large CPG companies to fundamentally rethink how and where they compete. This means aligning strategic priorities more closely with category and geographic dynamics, rather than applying uniform global playbooks.

Different categories are being shaped by very different consumer needs, from wellbeing and functionality to indulgence, moderation and affordability, and growth strategies must reflect these realities as well as reconsidering category boundaries to answer consumers’ higher level needs.

Similarly, geographic performance is diverging sharply, with regions such as Latin America MEA, and parts of APAC offering structurally stronger volume opportunities than mature markets under acute affordability pressure.

At the core of this realignment sits a deeper understanding of evolving consumer needs, expectations and behaviors. Consumers are not simply trading down; they are redefining value, reassessing occasions and becoming more selective about where brands truly add meaning. Penetration growth therefore depends on brands’ ability to remain relevant, accessible and credible across different consumer segments, channels and usage moments.

Finally, volume-led strategies cannot be disconnected from sourcing, supply chain and broader value-chain realities. Input cost volatility, constrained commodities, geopolitical disruptions and sustainability requirements are no longer just external factors: they directly shape what can be offered, at what price, and at what scale.

In a market that is still growing in volume, losing volume shouldn’t be seen as inevitable. But restoring it requires making penetration a deliberate strategic priority and aligning categories, geographies, consumers and value-chain choices around that objective.

At Sevendots, we help CPG companies put volume back at the center of sustainable value creation.

We support leadership teams in making deliberate portfolio, category and geographic choices that strengthen penetration and scale brand assets over time. Our work combines deep industry expertise with robust analytical and penetration-focused frameworks, enabling companies to align growth strategies with evolving consumer needs, channel dynamics and value-chain constraints.

Contact Sevendots to explore how we can support you in building volume-led growth strategies and restoring long-term value creation.

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Sources:

• NIQ, Total CPG across 54 global markets – Volume and Value Growth by Region and Category, Year Ending June 2025

• 2025 Companies Quarterly Financial Reports

• Albertsons’ Q3 2025 Earnings Call

• Sevendots Growth Series on Penetration, 2025

• Sevendots 2024 Top 11 CPG Companies Analysis, 2025

• Sevendots Quarterly Top 11 CPG Companies Analysis, 2025

• Sevendots Quarterly Top 35 CPG Companies Analysis, 2025