Price-led growth has reached its limits, while volume growth increasingly depends on deliberate penetration strategies.

Capital-intensive industrial assets remain essential but are no longer the primary source of competitive advantage or shareholders’ returns.

CEOs recognize the need to rethink business models. Yet legacy structures and investment footprints complicate the transition.

Sustained value creation will require combining penetration led growth with new business models that rebalance assets, insight, and adaptability.

Why CPG’s growth challenges are structural, not cyclical

The CPG growth model that delivered decades of shareholder value is no longer fit for today’s market. Price-led growth is reaching its limits, volume growth is stalling, and capital markets are signaling that traditional scale is no longer enough.

Large Consumer Packaged Goods (CPG) companies are facing a growing structural challenge. In an environment characterized by accelerating change, fragmented consumer demand, rising competitive intensity, and increasing channel complexity, many CPG leaders are finding it harder to sustain volume growth. This difficulty is now cascading through the value equation: margins are under pressure, price increases are losing effectiveness, and shareholder returns are increasingly disconnected from broader market performance.

This situation is not cyclical. It reflects a misalignment between how value is created in CPG today and how markets and consumers now reward value creation.

Over the last several years, even the best-performing CPG companies have delivered meaningfully lower returns than broader equity markets, a signal that scale, brands, and industrial excellence, while still essential, are no longer sufficient on their own to support long-term value creation.

In recent years, much of CPG growth has been sustained through pricing. This strategy has bought time, but not a solution to the underlying problem that has been simmering for a while.

Private labels, insurgent brands and local players continue to gain share across markets while an increasing number of consumers trade down or fragment their spend across brands, channels, and solutions. At the same time, promotional intensity and marketing efficiency have deteriorated, further eroding the effectiveness of traditional levers.

The implication is clear: price can no longer compensate for weak demand fundamentals.

In 2025 for the top 11 CPG companies volume growth has been negative. In 2024, roughly three-quarters of consumer products sales growth came from price increases.

Over the past 5 years, consumer staples (proxied by XLP) delivered ~8.0% annualized CAGR vs. ~15.0% annualized for the S&P 500 (SPY). In 2025 the top 11 CPG companies’ share price growth was on average at 0% vs. double digit growth of the relative stock exchange indexes.

This creates a new mandate: CPG must reinvent the consumer value equation, while still extracting medium-term value through disciplined penetration-driven volume growth.

CEOs recognize the need for a reset

This reality is now reflected at the highest level of corporate priorities. Recent global CEO surveys show that business model change ranks as the number one priority, ahead of price increases, marketing spend, headcount optimization, or M&A.

Price increases remain high on the agenda, but they are increasingly being viewed as tactical levers, not sustainable engines of value creation.

Similarly, an excessive focus on the premium categories or segments is leading to two consequences for global CPG players:

• Inevitable excess capacity in production plants as a lower number of consumers are being focused on, those who can afford to pay more

• Leaving the bulk of category volumes in the hands of regional/local players in the mid tier price segments

• Allowing smaller brands and private labels to first control the lower price segment and then start to ladder up.

For CPG in particular, this shift is significant. The industrial model that historically underpinned competitive advantage, capital-intensive assets, scale manufacturing, and fixed-cost leverage, is now acting, in many cases, as a constraint on adaptability.

Why industrial scale alone no longer drives CPG value creation

Manufacturing scale, operational excellence, and industrial know-how will remain critical components of any successful CPG model. However, they can no longer sit in isolation at the center of the value equation.

Three structural tensions are emerging:

• Capital intensity limits experimentation and speed

• Traditional category boundaries constrain innovation and relevance

• Indirect routes to market reduce access to consumer insight and learning velocity.

As a result, optimizing the existing system delivers diminishing returns.

Yet this does not mean CPG companies are “out of growth.”

The medium-term opportunity penetration-led volume growth

In the medium term, large CPG companies can still sustain value creation through volume growth, but the nature of that growth is changing. The most credible path forward is penetration-led volume growth, not indiscriminate expansion. This requires deliberate choices involving three dimensions:

Portfolio choices become critical.

Growth increasingly depends on focusing portfolios on consumer jobs to be done and occasions where penetration headroom still exists, on adjacent or redefined spaces where brands have permission to stretch, and on managing explicitly the difference between cash engines and growth engines, each with distinct roles, economics, and expectations.

Channel development is equally decisive.

Penetration today depends on structural advantage in the channels that are gaining relevance like discounters, e-commerce, quick commerce, specialized platforms, Away From Home and digital B2B ecosystems. As pointed out by Justing Sargent in our recently published article “The Collaboration Dividend” growth can come also from existing channels.

Geographic footprint must also be addressed more selectively.

Growth is increasingly uneven across markets, requiring targeted geographic bets, localized propositions, and tailored pack-price and route-to-market architecture rather than uniform global rollouts.

Penetration-led growth, therefore, is not primarily an execution challenge. It is a design problem, requiring a different way of thinking about where and how growth is created.

Disruptive innovation as the bridge between growth and new business models

This is where disruptive innovation becomes essential, provided it is understood in a broader and more holistic sense than traditional product innovation and it is fully consumer centric. At its core, penetration-led growth must be built around a consumer-first engine structured on three elements:

• Jobs & occasions (demand definition)

• Access & interfaces (demand access)

• Portfolio & economics (value capture).

Disruptive innovation, therefore, is not just about new products, but about designing and activating this system end-to-end.

In CPG, innovation has long been associated mainly with new products, formulations, or line extensions. While these remain important, they are no longer sufficient to unlock sustainable penetration growth or to support the emergence of new business models.

Disruptive innovation today operates at the system level. It reshapes how value is conceived, created, delivered, and captured, often without immediately challenging the core product itself. In doing so, it allows companies to explore new growth logics while continuing to leverage existing industrial and brand assets.

In practice, this broader form of innovation spans multiple, interconnected dimensions:

• Consumer innovation, redefining the consumer job to be done and reframing categories around outcomes, occasions, and routines rather than products

• Business model innovation, experimenting with new revenue logics, subscription mechanisms, service layers, and ecosystem participation

• Route-to-market innovation, redesigning channels, partnerships, and digital interfaces to accelerate reach, learning, and penetration

• Operational and capability innovation, embedding data, AI, and automation to increase adaptability and decision speed

• Organizational and governance innovation, enabling faster experimentation, cross-functional collaboration, and different risk profiles.

Crucially, this systemic view of innovation is what makes penetration-led growth sustainable.

By redefining occasions, simplifying access, improving relevance, or lowering adoption barriers, disruptive innovation expands demand rather than merely increasing intensity among existing buyers.

At the same time, it creates protected spaces where new ways of generating value can be developed and tested without destabilizing the core business.

Clearly some of these routes are harder than others and overall ROI can be different.

To manage disruptive innovation properly aligning the right resources and capabilities becomes crucial as well outlined by our Partner Mauro Piloni in his recent article “Unlocking Growth in the CPG Industry in a World of Uncertainty”.

Why business model innovation becomes unavoidable

Even with disciplined penetration-led growth, the limits of the traditional CPG model remain. This is why leading players are exploring new business models, not as experiments at the margin, but as ways to redefine how value is created.

Across the industry, five model directions are emerging:

• Direct-to-Consumer DTC 2.0, not as a volume channel but as a strategic control tower for data, insight, and innovation and to reduce dependency from large retailers.

• Ecosystem and platform models, where value is created across connected products, services, and partners. Think here at how wearables have been able to build a market as a health and data companion.

• Service-led and outcome-oriented propositions, shifting from selling items to delivering results and covering higher level consumer needs. This provides more rounded solutions to consumers.

• Circular and bioeconomy models, where sustainability becomes a core operating logic driven by regulation and economics. I.e. in many markets, refill models already exist at scale, for example, returnable glass bottle systems, and could be reinvented through electrified logistics and digital tracking.

• AI-enabled decision systems, i.e. across dynamic pricing, demand sensing and portfolio optimization.

These models rebalance the mix between tangible assets and intangible value, between scale and adaptability.

These five models are not alternatives. They are different expressions of three underlying transformation pillars being:

• Demand definition – How can I tackle new, or better addressing existing, jobs to be done and occasions through a mix of physical products and services?

• Demand access – How can I reinvent route-to-market leveraging new interfaces?

• Operating adaptability – How can I better leverage data and AI pairing it with new organization models?

The real challenge transitioning without breaking the base

While CEO ambition to redefine business models is clear, the path to get there remains uncertain. Capital investment and industrial footprint, once the primary drivers of value, now act as potential barriers to transformation.

The challenge is not to abandon the existing model, but to transition from it deliberately, funding the future while protecting the present.

This requires:

• Clear transition architectures, not isolated pilots

• New performance metrics beyond volume, margin, and share

• Explicit trade-offs between short-term optimization and long-term optionality

Across all emerging models, three enablers consistently determine success:

• Access to fresh, clean, harmonized internal and external information

• Experience-based, multidisciplinary, future-oriented human judgment

• A seamless combination of the two, where technology ampli es, not replaces, human insight

This is where many transformations fail: not for lack of data or technology, but for lack of meaningful synthesis and direction.

The Sevendots perspective

At Sevendots, we have been consistently advocating for some time that the CPG value equation must evolve, both to secure long-term shareholder returns and to better align with consumers’ rapidly evolving expectations. Not only have we been beating this drum, but we have been working with multiple companies to kick start and manage the required change.

What differentiates our work is not the identification of growth opportunities, but the ability to sequence penetration-led growth and business model evolution without breaking the industrial base.

More recently, we have been promoting our strong belief that large CPG companies can still grow volumes in the medium term, provided growth is driven by penetration rather than short-term intensity.

Supporting this, we have developed a clear and pragmatic penetration-growth framework that helps companies identify where real demand headroom still exists and how to unlock it through the right combination of portfolio choices, channel design, and geographic focus.

In practice, we work with leadership teams to:

• Identify penetration opportunities across consumer jobs, occasions, and adjacent need states

• Redesign portfolios to clearly differentiate between cash engines and growth engines

• Translate strategic intent into concrete channel and route-to-market choices that accelerate reach and learning

• Prioritize geographies where penetration-led growth is structurally achievable rather than assumed.

Beyond penetration, we are actively working with and alongside clients on the broader set of transformations required to redefine value creation in CPG. This includes sharing experience, co-designing solutions, and supporting execution across topics such as:

• Moving beyond traditional category definitions toward consumer- and solution-led growth spaces

• Rebalancing tangible and intangible elements of the value proposition

• Designing higher-level consumer solutions that aggregate products, services, and data

• Rethinking routes-to-market, including DTC, digital B2B, and ecosystem-based models

• Exploring open and collaborative ecosystems where cross-company partnerships improve efficiency and quality of the offer

• Leveraging disruptive innovation and AI-enabled capabilities to accelerate insight, adaptability, and decision-making.

Across these engagements, our focus is not on isolated pilots, but on helping organizations manage the transition from today’s industrial model towards more adaptive, insight-driven business models while protecting the economic engine that funds the journey.

Closing thought

In 2026, the question for CPG leaders is no longer whether they can protect margins in the short term.

It is whether they can reconcile penetration-led volume growth with a fundamental redefinition of how value is created.

Business model evolution is no longer optional. It is the condition for sustainable growth and long-term shareholder returns

For CPG leaders, the real risk is no longer disruption from the outside but clinging too long to a value equation that markets and consumers have already moved beyond.

Premium access for CPG leaders ready to go deeper.

Unlock expert frameworks, in-depth case studies, and practical diagnostic tools designed to help consumer goods businesses navigate complexity, uncover growth opportunities, and drive measurable results with confidence.

Sources:

• Sevendots Top 12 CPG Companies Monitor, 2026

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

• Navigating Effective Complexity: New Insight into Portfolio Management, Sevendots Growth Series, 2025

• Yahoo Finance, 2026

• The C Suite Outlook 2026, The Conference Board, 2026

• M. Piloni, Unlocking Growth in the CPG Industry in a World of Uncertainty, Sevendots, 2026

• Justin Sargent, The Collaboration Dividend: The secret sauce CPG leaders use to drive volume and profitability, Sevendots, 2026

The CPG landscape is undergoing a seismic shift. According to data from fiscal year 2024 presented at the CAGNY Conference in February 2025, less than 15% of growth from the world’s top brands is volume-driven. This is not just a post-COVID anomaly—it reflects a multi-year trend, noted in recent reports including Nielsen’s 2024 Annual Marketing Report and Euromonitor’s Global Inflation Tracker Q1 2023 , where top-line growth has increasingly relied on pricing and mix rather than genuine consumer expansion. For big brands, the message is clear: change must happen now.

This volume stagnation isn’t just a financial concern—it’s a strategic one. Without sustained volume growth, the long-term viability of innovation, investment, and brand equity erodes. This is not the first time CPG players have been warned. But years of economic and pandemic-related uncertainty gave companies permission to delay deep change. Those conditions no longer hold.

The Rise of Small Brands: Speed, Storytelling, and Relevance

Small brands have outpaced legacy players across numerous categories. Their winning formula combines:

• Agility: The ability to anticipate or quickly respond to evolving consumer trends.

• Engagement: Building meaningful relationships with consumers through relevance and values alignment.

• Societal purpose: A visible contribution to issues like sustainability, equity, and health.

• Omnichannel fluency: Effective use of eCommerce, direct-to-consumer (DTC) platforms, and social media to reach and retain audiences.

These qualities have allowed small brands to gain traction not only in premium niches but increasingly in mainstream, high-velocity categories—ranging from pet care and functional beverages to personal care and home cleaning.

What Big Brands Are Already Doing: Early Signs of Change

While the urgency is high, the good news is that many large CPG companies are acting. According to recent analysis by Sevendots based on 2024 financial reports, shareholder communications, and presentations from a group of the largest global multinational CPG companies, leading players are focusing their efforts in three strategic domains:

1. Portfolio Optimization

• Streamlining SKUs and removing clutter from assortments.

• Divesting low-growth or margin-dilutive brands.

• Prioritizing and entering functional, health-forward, or premium segments where demand is rising.

2. Geographic & Channel Expansion

• Reallocating resources to high-growth emerging markets (APAC, LATAM, Africa).

• Strengthening presence in away-from-home (AFH) channels.

• Embracing quick commerce, digital-first retail, and non-traditional retail partners.

3. Digital & Productivity Optimization

• Using AI for dynamic pricing, demand forecasting, and trade optimization.

• Enhancing marketing ROI through precision targeting and content optimization.

• Rewiring supply chains for agility and resilience.

These moves, while necessary, will only deliver impact if paired with a new model of growth leadership—centered on relevance, reinvention, and recommitment.

Big Brands Must Play to Their Strengths

On top of what large CPG companies are already working on, there are additional elements to consider in order to compete effectively with smaller brands:

1. Purpose & Sustainability at Scale

• Big brands have the infrastructure, partnerships, and budgets to deliver purpose at scale. From regenerative agriculture to sustainable packaging to ethical sourcing, their commitments must be bolder—and measurable.

2. Emotional Reconnection through Heritage and Human Truths

• Many iconic brands were built on enduring emotional propositions—joy, connection, empowerment, comfort. These should be rediscovered, reinterpreted, and re-expressed for new generations and touchpoints.

3. Innovation & Personalization

• It’s no longer enough to launch new SKUs. Breakthrough innovation is about platform thinking, consumer co-creation, and embedding personalization from formulation to packaging and messaging. Big brands have access to deep consumer data and testing capabilities—they must use them.

  

Efficient Product Introductions: The Execution

Breakthrough innovation means nothing without disciplined execution. Efficient Product Introductions have become mission-critical. This involves:

• Aligning brand, R&D, and commercial functions around a shared brief

• Involving retailers and trade partners early

• Integrating regulatory, category, and shopper insights

• Investing in launch readiness, supply visibility, and retail activation

This is where many CPG players still fall short. Too many innovations fail to scale, or are introduced without clarity, cannibalizing existing portfolios and eroding brand equity. This unlocks both speed to shelf and sustained presence.

Conclusion: Reclaiming Volume, Reclaiming Relevance

Volume-led growth isn’t dead. But it requires a different mindset—one that embraces reinvention over iteration, collaboration over control, and clarity over clutter. Big brands still have unmatched assets: reach, resources, trust. What they need now is resolve.

The time for cautious pilot projects and surface-level tweaks has passed. It’s time to act with boldness, purpose, and precision. The next decade of CPG leadership will belong to those who can scale not just efficiency, but relevance.

Premium access for CPG leaders ready to go deeper.

Unlock expert frameworks, in-depth case studies, and practical diagnostic tools designed to help consumer goods businesses navigate complexity, uncover growth opportunities, and drive measurable results with confidence.

Sources:

• Nielsen (2024). Annual Marketing Report: Earning Trust, Measuring Performance

• Euromonitor International (2023). Global Inflation Tracker Q1 2023

• Mintel’s Global New Product Database (GNPD) (2024)

The year marks the end of price-led complacency and companies must rapidly evolve to adapt.

5 key takeaways from 2025 performance

2025 has marked a systemic inflection point for large global CPG companies.

The narrative is no longer about inflation, temporary elasticity, or tactical adjustments. The data shows a widening divide in volume, in scale, and increasingly in financial performance.

Based on our review of 12 among the top global CPG players, five key takeaways stand out.

1. Volume remains negative across major CPG companies

Unlike 2024, when volume growth was modest but still positive (+0.3%), 2025 shows a negative volume trend across all four quarters.

As we already highlighted in our analysis of the Q2 2025 CPG Results, early signs of structural volume pressure were already visible.

It’s now even clearer that this is no longer cyclical softness. It is persistent.

Several forces are converging:

• Shifting consumer behavior and higher price elasticity

• Geopolitical instability and tariffs variability

• Commodity cost inflation

• Retail destocking in selected markets

• Limited disruptive innovation

Pricing has supported topline growth in recent years. But pricing alone does not expand physical scale. And in 2025, volume weakness became visible across most large players.

2. Large CPG companies underperform the market

The overall CPG market grew faster than the large multinational players analyzed.

The growth gap: 1.3 percentage points.

More importantly, the difference is primarily volume-driven.

While market volume remained positive, large CPG players on average experienced negative volume growth, building a 1.5 pp gap.

When leaders grow below market, scale erodes. And when scale erodes, share shifts.

Where is growth going?

• Private Labels, growing above the market across regions and strongest where historically underdeveloped

• Insurgent brands, faster overall (particularly in innovation) and more aligned with emerging consumer trends

• Local players, leveraging proximity, agility, and cultural relevance

Private Labels, in particular, follows a consistent path across regions. Europe represents the most advanced stage, with some markets exceeding 50% share, a potential preview of a long-term evolution elsewhere.

The competitive set has fundamentally changed.

3. Only a minority of global CPG leaders consistently grow volume

Out of the top CPG players analyzed, only four delivered volume growth in 2025.

The performance gap is striking, with a 3.4 pp divide between volume growers and volume non-growers.

Even more telling: the companies that grew volume in 2025 were largely the same that grew in 2024 (with only one exception). This suggests that volume growth is not random. It reflects structural choices.

• Clear portfolio prioritization.

• Geographic discipline.

• Channel expansion.

• Execution rigor.

Volume is becoming a discriminator of strategic coherence.

4. Lack of volume growth impacts margin and TSR

There is a growing volume-margin tension.

In 2024, companies were able to expand margins despite limited volume growth. Pricing and productivity offset weak physical expansion. In 2025, average negative volume growth had a negative impact on margins.

Without scale, operating leverage weakens.

The impact extends to capital markets.

Average share price performance across major players in 2025 was 0%.

But within that average:

• Volume growers: +8%

• Flat or negative volume players: –8%

Markets reward physical growth. Not pricing-led revenue.

The case of Mondelez illustrates the tension. Organic growth remained stable year-over-year (4.3% in both 2024 and 2025), but the mix shifted dramatically, greater volume loss offset by stronger pricing. At the same time, margins declined significantly Gross margin declined by almost 600 bps and operating margin by 300 bps, partly driven by cocoa inflation.

Volume and value are not independent.

Persistent volume erosion can create a vicious cycle.

5. Penetration-led strategies separate winners from laggards

If volume is the problem, penetration is the solution.

The correlation between volume and penetration is significantly stronger than between volume and frequency. This structural relationship is explored further in our Penetration Analysis Growth Series. Yet penetration remains underleveraged across many large CPG portfolios.

The average global household penetration of the top 50 brands is just above 20%. The upside remains substantial.

Few multinational players have more than a handful of brands in the global top 50. Unilever stands out with 12; a few have four or six brands, most others have only one or two.

Driving penetration requires disciplined choices:

Portfolio

Systematic review at category, brand, and SKU level.

Unilever provides a clear example, sharpening its focus on Beauty & Wellbeing and Personal Care, which today represent 51% of revenue and are planned to grow to two-thirds of the portfolio, divesting structurally declining segments, and explicitly adopting a volume-led execution model.

P&G’s 2025 volume challenges, with only one macro-category growing, reinforce the need for portfolio reassessment.

Portfolio assessment should be periodic and holistic.

In many organizations, reviews are driven either by centralized financial metrics or by BU-level consumer and market insights. Sustainable growth requires combining both, integrating financial performance, consumer demand, competitive and retailer dynamics, alongside broader external factors such as regulation, sourcing risk, and geopolitical volatility.

The Sevendots framework links portfolio decisions at category, brand, and SKU level to these integrated triggers, supporting more disciplined and strategic allocation choices.

Channels

Channel fragmentation is accelerating.

L’Oréal and Nestlé demonstrate strong momentum in e-commerce; Nestlé and others also leverage Away-From-Home. Danone reports faster growth outside mass retail.

Expanding distribution reach and strengthening execution across channels directly fuels penetration.

“In 2025, channels outside mass retail grew significantly faster than mass retail. We are reaching more people in more places at all stages of their lives.”

Geography

Geographic expansion remains underexploited.

The Coca-Cola Company Q4 2025 pivot, with volume accelerating ahead of value, reflects renewed focus on emerging markets where many beverage occasions remain unbranded.

“More from more markets” is not just rhetoric, it is a penetration strategy.

L’Oréal illustrates disciplined geographic alignment. In 2025, the company grew across all regions, with particularly strong performance in Latin America and SAPMENA-SSA, two of the most dynamic global CPG regions. By aligning its footprint with higher-growth markets, L’Oréal benefits directly from regional momentum, reinforcing geography as a foundational driver of penetration and scale.

Geographic prioritization should not be limited to evaluating the current size of a category in a market — a conservative approach often seen in large organizations. The real opportunity lies in identifying where a company can build category leadership and capture disproportionate growth. Expansion decisions should therefore be linked to the potential to shape demand, drive penetration, and establish a defensible position — not merely to participate in existing scale.

Innovation

True innovation remains under-leveraged. As discussed in our Consumer-Facing Innovation Growth Series, structured innovation discipline is directly linked to long-term shareholder return. Global new product intensity has declined. Yet companies that focus on structured, disciplined innovation consistently outperform in shareholder return.

Innovation must be differentiated between renovation and real disruptive expansion.

Innovation requires clarity. It should begin with a clear definition of its expected contribution and then follow differentiated paths. Renovation and proximity innovation aim to optimize and reinforce existing assets, while disruptive innovation demands dedicated scouting, scoping, and development logic. Treating these streams distinctly enables more disciplined resource allocation and more consistent long-term impact.

Strategic imperatives for 2026

The lessons from 2025 are clear:

1. Rebalance from price-led to volume-led growth

2. Elevate penetration to a board-level KPI

3. Prune portfolios aggressively

4. Double down on high-growth geographies

5. Expand distribution reach and strengthen execution across channels

6. Make innovation selective and transformational

2025 did not simply expose temporary weakness but it revealed a structural divide where volume now discriminates winners from laggards.

The performance indicates that scale underpins margins and that physical growth drives valuation. For large CPG leaders, the question is no longer whether volume matters, but whether strategy is aligned to deliver it.

How Sevendots supports penetration-led growth

Translating these imperatives into execution requires structure and discipline.

At Sevendots, we work with leadership teams to design and implement penetration-led growth strategies grounded in data and strategic clarity. Our work spans large multinational CPG leaders and medium players across categories and geographies.

Our framework for penetration planning and optimization allows companies to:

• Map and assess current assets across categories, brands, and SKUs

• Conduct deep portfolio diagnostics combining financial performance, consumer dynamics, and external market variables

• Identify where penetration potential is structurally underleveraged

• Define clear choices on where to focus, expand, simplify, or exit

• Align channel and geographic expansion with portfolio priorities

• Redefine innovation ambition and ensure resources are allocated to initiatives that expand scale, not just sustain mix.

Penetration does not increase by chance.

Premium access for CPG leaders ready to go deeper.

Unlock expert frameworks, in-depth case studies, and practical diagnostic tools designed to help consumer goods businesses navigate complexity, uncover growth opportunities, and drive measurable results with confidence.

Sources:

• Companies quarterly and FY financial reports, 2025, 2026

• Companies earnings calls, public statements and conferences, 2025, 2026

• Companies CAGNY presentations, 2026

• Yahoo Finance, 2026

• Sevendots, Portfolio Management Growth series, 2024

• Sevendots, Consumer Facing Innovation Growth Series, 2023

• Sevendots, Private Labels, The Elephant in The Room, 2026

• Sevendots, Private Labels Growth: What CPG Brand Owners Need to Know, 2024

• NIQ, PL Analysis, 2025

• Kantar, Penetration Analysis, 2024, 2025

• BCG, Innovation Wake Up Call for CPG Businesses, 2023

Organic Growth is Slowing. Volume Pressure is Rising.

In 2025, so far the average volume growth of the world’s largest CPG companies The headline is clear: organic sales growth is decelerating. The average organic growth rate across the 11 companies fell from 3.9% in FY 2024 to 1.5% in Q1 2025. But more critically, the volume trend has turned negative – from +0.5% in 2024 to -1.0% in the first quarter of this year. Six of the 11 companies posted flat or declining volumes.

Q1 2025 shows a further deterioration of growth, especially in terms of volume

Companies largely point to external consumer and market dynamics as the root cause:

• Inflation fatigue, especially in North and Latin America with consumers downtrading, delaying purchases, and reducing pantry loading.

• Input cost inflation – particularly in cocoa, dairy, and packaging – forcing pricing actions that are impacting elasticity.

These qualities have allowed small brands to gain traction not only in premium niches but increasingly in mainstream, high-velocity categories—ranging from pet care and functional beverages to personal care and home cleaning.

Category and Geographic Structure Matter

Divergences in performance underline the strategic impact of portfolio structure and market exposure.

Take the reported performance of The Coca-Cola Company vs. PepsiCo. Coca-Cola is reaping the benefits from a focused beverage portfolio and prior rationalization efforts. Its shift toward higher price-per-liter products, such as functional beverages, supported +5% value growth coupled with +1% volume growth. Its broader international exposure, especially in emerging markets, helped offset U.S. softness.

In contrast, PepsiCo’s dual portfolio (45% beverages and 55% food) is more exposed to complex sourcing and formulation costs. The food side of the business, including snacks, carries higher COGS and is more susceptible to input inflation and tariff pressures. A stronger reliance on the U.S. market further dampened volume, which declined by -1.3%.

Food-centric companies more broadly – Mondelēz, Kraft Heinz, General Mills, and PepsiCo – are disproportionately affected by rising commodity costs and volume softness. For instance, Mondelēz’s strong +6.6% value growth was more than offset by a -3.5% volume decline, largely driven by price adjustments attributed to cocoa cost inflation.

Balanced Growth is a Differentiator

Two companies stood out in delivering a better balance between value and volume.

Unilever posted +3.0% growth, with volume contributing +1.3%. It appears to benefit from strong presence in AMEA markets, where consumer spending remains more dynamic and well-calibrated pricing strategies in emerging markets. Also, Unilever is claiming an effective in-market execution, especially in Personal Care and Wellbeing.

Danone also delivered a well-balanced performance, with +2.4% value and +1.9% volume growth, supported by a clear focus on functional health-oriented products and strong operational execution.

Time to Reconfirm – or Rethink – Strategic Priorities

As growth becomes harder to secure, large CPG companies need to reinforce or review key decisions:

• Intensify focus on strategic portfolio management, reassessing performance and potential at category, brand, and SKU level and driving true innovation. Companies proactively working on their portfolios seem to benefit a better growth.

• Make deliberate geographic choices, with sharper market prioritization and related resources investments. Companies with a broader geographical scope seem to better sustain their organic and volume growth.

• Expand route-to-market models, including better coverage of new retail formats. Companies developing presence in new channels tend to better preserve their top line growth.

At the same time, productivity and operational efficiency remain essential levers for protecting margins and funding reinvestment. The companies that will outperform in the next quarters are those that can align portfolio choices, geographic coverage, and executional excellence to the evolving consumer landscape.

Contact Sevendots today to discover more about CPG industry transformation?

Premium access for CPG leaders ready to go deeper.

Unlock expert frameworks, in-depth case studies, and practical diagnostic tools designed to help consumer goods businesses navigate complexity, uncover growth opportunities, and drive measurable results with confidence.

Sources:

• Nielsen (2024). Annual Marketing Report: Earning Trust, Measuring Performance

• Euromonitor International (2023). Global Inflation Tracker Q1 2023

• Mintel’s Global New Product Database (GNPD) (2024)