Strategies for CPGs to Compete in the Market

I have spent years in the highs and lows of the consumer goods industry but never seen a pricing climate quite like this. Manufacturers are getting squeezed from every direction-tariffs, skyrocketing raw material costs, and relentless supply chain disruptions. The old playbook of raising prices to cover costs? That’s dead. Why? Because consumers are feeling the pressure too. A 2024 Nielsen report makes it clear: today’s shoppers are scrutinizing every dollar they spend, and brands that aren’t strategic about pricing risk losing market share fast. Here’s what I’m seeing from top CPG brands that get it: 1️⃣ Walmart is investing heavily in AI-driven pricing models to keep costs competitive-e-commerce now makes up 18% of total revenue. 2️⃣ PepsiCo is doubling down on pack-size innovation, offering smaller, affordable options to maintain volume without excessive discounting. 3️⃣ Luxury brands are using price elasticity models, testing demand thresholds before rolling out increases-avoiding consumer pushback. 4️⃣ Supply chain resilience is non-negotiable. Companies are shifting manufacturing away from China, despite short-term cost spikes, to avoid future geopolitical risks. The smartest brands aren’t just reacting. They’re rethinking. They’re moving toward Revenue Growth Management (RGM) frameworks that help them: ✅ Optimize pricing and promotions (because blanket price hikes are a losing game) ✅ Focus on margin-smart growth, not just revenue ✅ Leverage data analytics to make smarter, faster pricing decisions Brands that don’t evolve risk eroding profitability or pricing themselves out of the market. CPG leaders who master strategic pricing, operational efficiency, and consumer-driven value creation will own the future of this industry. Are you adjusting your strategy, or just reacting to rising costs? Because in 2025, only the most adaptable brands will win. #CPG #FMCG #PricingStrategy #RevenueGrowth #ConsumerGoods

Are the giants losing ground? In 2024, 11 of the world’s largest CPG companies grew at half the pace of the overall market. While the global CPG industry delivered 7.6% organic growth, the top players averaged just 3.9%. 🔹 Strategically, this suggests a mismatch between current portfolios and the fastest-growing categories and segments, as well as underrepresentation in high-growth geographies like Asia. 🔹 Executionally, the share shift reflects: – Smaller and local brands winning on consumer connection and innovation speed – Private Labels gaining ground through affordability, now expanded across multiple price tiers—including premium The growth gap isn’t just numerical—it’s structural. To close it, CPG leaders must rethink where they play, what they offer, and how they deliver. #CPG #PortfolioStrategy #GrowthShift #PrivateLabel #ConsumerConnection #Innovation #GeographicExpansion #Sevendots

Only 9% of CPG companies grew new product sales last year. Nine percent. I see this pattern constantly. A founder comes in with a hero SKU that's working. Their instinct: new flavor, new size, new format of the same thing. The board wants innovation. The team wants to ship. So they do. Velocity on the core drops. The new SKU splits existing demand instead of creating new demand. The retailer sees the numbers. Shelf space gets cut in the next review. The brands in that 9% did something different. They found an occasion or need state that didn't have a product yet. The launch answered a question nobody was asking well — not a variation on one that already had twenty answers. Here's the pattern I see with the brands that actually grow: they didn't launch a new flavor. They launched a new occasion. The bifurcated consumer makes this harder. Upper-income households are still driving growth. Middle-income is fragile. Lower-income has pulled back. Your next launch has to know which consumer it's for and why that person would switch from what they're buying today. If your 2026 pipeline is mostly line extensions of your hero SKU — are you growing the brand, or diluting it? #CPG #ConsumerGoods #CPGCurator #RetailStrategy #EmergingBrands Compass Rose Ventures

Kate Farms made a risky strategy move that could have sunk the company, and there's a valuable lesson for startups and growth companies in it. Early on, Kate Farms' organic, plant-based nutrition shakes were sold only in health food stores. The problem? Crowded shelves and low margins. When Brett Matthews became CEO, he made a risky decision: He pulled the company out of retail entirely, even though it accounted for most of the company's revenue at the time. Instead, Brett and team focused on getting coverage through Medicare, Medicaid, and private insurance—a strategy few CPG brands ever attempt. This pivot put the company directly up against the industry giants. But, it allowed Kate Farms to deliver life-changing products to millions through a go-to-market strategy that focused on healthcare provider recommendations. Today, Kate Farms products: 🌱 Compete head-to-head with those industry "giants" 🌱 Are the preferred choice in multiple medical nutrition categories 🌱 Are the most recommended plant-based products by healthcare providers This acceptance and validation from the clinical market is now reopening consumer and retail channels in ways that weren't available before. One thing I've learned in my career working for successful consumer brands: 𝗜𝘁'𝘀 𝗼𝗳𝘁𝗲𝗻 𝗻𝗼𝘁 𝗲𝗻𝗼𝘂𝗴𝗵 𝘁𝗼 𝘀𝗶𝗺𝗽𝗹𝘆 𝗵𝗮𝘃𝗲 𝗮 𝗯𝗲𝘁𝘁𝗲𝗿 𝗽𝗿𝗼𝗱𝘂𝗰𝘁. 𝗜𝘁'𝘀 𝗲𝘀𝘀𝗲𝗻𝘁𝗶𝗮𝗹 𝘁𝗼 𝗶𝗻𝗻𝗼𝘃𝗮𝘁𝗲 𝘁𝗵𝗲 𝗴𝗼-𝘁𝗼-𝗺𝗮𝗿𝗸𝗲𝘁 𝘀𝘁𝗿𝗮𝘁𝗲𝗴𝘆 𝘁𝗼𝗼. How can companies do this? 1️⃣  𝗜𝗻𝗻𝗼𝘃𝗮𝘁𝗲 𝗯𝗲𝘆𝗼𝗻𝗱 𝘁𝗵𝗲 𝗽𝗿𝗼𝗱𝘂𝗰𝘁. A great product isn’t enough. In my experience, success for breakout consumer companies comes when product innovation meets go-to-market innovation. Think: Warby Parker selling prescription glasses online or Tesla skipping dealerships. 2️⃣  𝗖𝗿𝗲𝗮𝘁𝗲 𝘆𝗼𝘂𝗿 𝗼𝘄𝗻 𝗺𝗮𝗿𝗸𝗲𝘁. Often, game-changing products start with no clear market, but they create one as customers flock to them. Don't let an "expert" tell you there is no market for a novel product you know people will love. 3️⃣  𝗙𝗶𝗻𝗱 𝘁𝗵𝗲 𝗿𝗶𝗴𝗵𝘁 𝗽𝗲𝗼𝗽𝗹𝗲 𝘁𝗼 𝘀𝗰𝗮𝗹𝗲. Founders are great at making products, but it's often essential to bring in different expertise to profitably scale a business. Every company I've been a part of has nailed this transition. Fresh expertise can spot new opportunities and exploit them profitably. Trust your instincts. Challenge the norm. Rewrite the rules. There was no market for plant-based, medical foods until Kate Farms created one.

𝗧𝗵𝗲 𝗠𝗶𝗱𝗱𝗹𝗲 𝗶𝘀 𝗚𝗲𝘁𝘁𝗶𝗻𝗴 𝗦𝗾𝘂𝗲𝗲𝘇𝗲𝗱 🥨📉 Nestlé just gave us one of the cleanest reads on the U.S. consumer I've seen all year — and it's not about price hikes. It's about price-pack architecture. David Rennie (Nestlé's marketing & sales chief) put it perfectly: "𝘐𝘯 𝘵𝘰𝘶𝘨𝘩 𝘵𝘪𝘮𝘦𝘴, 𝘱𝘶𝘳𝘤𝘩𝘢𝘴𝘪𝘯𝘨 𝘱𝘰𝘭𝘢𝘳𝘪𝘻𝘦𝘴. 𝘛𝘩𝘦 𝘣𝘪𝘵 𝘪𝘯 𝘵𝘩𝘦 𝘮𝘪𝘥𝘥𝘭𝘦 𝘢𝘭𝘸𝘢𝘺𝘴 𝘨𝘦𝘵𝘴 𝘴𝘲𝘶𝘦𝘦𝘻𝘦𝘥." 𝗪𝗵𝗮𝘁'𝘀 𝗵𝗮𝗽𝗽𝗲𝗻𝗶𝗻𝗴: 🔹 Shoppers are barbelling — either trading down to smaller, cheaper portions for everyday treats, or trading UP to mega value packs where the per-unit economics work in their favor 🔹 Mid-sized formats — the historical bread and butter of CPG shelf strategy — are losing relevance fast 🔹 Jeff Hamilton (Nestlé Americas CEO) confirmed the strain on U.S. personal spending has gotten "even more pronounced" over the last six months 🔹 The company's playbook: prioritize volume ("real internal growth") over price increases, and let pack architecture — not the price tag — do the work of meeting shoppers where they are 𝗪𝗵𝘆 𝘁𝗵𝗶𝘀 𝗺𝗮𝘁𝘁𝗲𝗿𝘀 𝗳𝗼𝗿 𝗖𝗣𝗚 & 𝗿𝗲𝘁𝗮𝗶𝗹: This is a pack-architecture problem hiding as a pricing problem. If your assortment strategy — and your retail media targeting — still assumes a normal distribution of basket sizes, you're optimizing for a shopper who's disappearing. PepsiCo, The Campbell's Company, and Mondelēz International are already reacting with smaller SKUs. The brands that win the next 12 months will be the ones that use first-party and retail media data to identify which of their households are barbelling — and serve them the *right* pack size, not just the right price. #CPGGuys #Flywheel #CPG #ConsumerSpending #RetailMedia #Nestle Sri Rajagopalan The CPG Guys

If I were launching a CPG brand today, here's exactly how I'd do it... the scrappy way: Most founders start with an idea. I'd start at the store. Here's my step-by-step playbook 👇 1. Find the white space BEFORE the product idea. I'm doing full shelf audits to spot categories ripe for disruption, then I’m conducting category and competitor audits for that category. 2. Build the brand world first. I’d be able to answer: Who desperately needs this? Why NOW? This becomes your north star for every decision—from recipe to packaging to pricing. 3. Sample, sample, sample. I'd rather iterate 5 times based on real data than launch something that flops because I fell in love with my own idea. A great way to do this? Product & Prosper® Sampling Program, which reaches 400+ industry vets. 4. Amazon first (not retail). It’s the fastest path to real customer feedback and reviews. Plus, you can test ad spend without a broker breathing down your neck. 5. Prove DTC works with actual data. With real reviews, proven conversion rates, and understanding of CAC from Amazon, you’re prepped to launch DTC. 6. Independent retail via Faire. This builds what we call The Retail Resume®—Credibility, Capability, Cash—before you pitch the big guys. 7. Build industry street cred in parallel. Pitch to industry media, join founder communities like Startup CPG and Naturally Network, post on LinkedIn and engage with other CPG folks on the platform. Buyers notice brands that other people are talking about. Notice what's NOT in this playbook: ❌ Immediately hiring a broker ❌ Cold-emailing buyers ❌ Rushing to trade shows without validation The brands that succeed today build proof of concept before distribution. They validate with real customers before buyers. Each step becomes the foundation for the next—not a sprint to the finish line. I dive deeper into each of these steps in today's Product & Prosper Newsletter. Link in the comments 👇

It's not your imagination. The consumer's shopping cart is truly getting harder to win. Our latest Zappi study of 2,000 U.S. consumers shows what CPG brands are really up against: 📉 Brand loyalty is collapsing — private label share jumped 12 points in just months 💸 Price is now the #1 purchase driver (winning over taste and purpose) 🛒 93% of shoppers are cutting back, substituting, or going private label And one-in-five US consumers now uses a food bank. Let's all allow that to hit home for a second. This is the new reality. But most CPG brands are still playing by the old rules. They are not changing the way they operate and innovating fast enough. Meanwhile, investor pressure is mounting as profit margins keep declining. Here's what the data says to do: → Prove value to consumers in seconds, not paragraphs → Meet your shopper on their discovery channel, not yours → Rethink where you stand in a mixed-brand basket world → Use AI to make a major impact in one vital area: consumer insights AI isn't a future tool. It's the competitive lever available RIGHT NOW to help brands understand consumers faster, communicate value sharper, and compete smarter. The brands doing this are gaining ground. The ones sitting on their hands are losing shelf space. You don't have to take it from me, or from just Zappi data. In this report, we've included major findings, data, and key trends in CPG from McKinsey & Company, Boston Consulting Group (BCG), Deloitte, Bain & Company, Infosys and many other leading firms. This report captures the most important mega-trends that every CPG leader needs to know about. If you work in CPG, I urge you to read this CPG Mega-Trends report, so you can take action for your business. ♻️ Share it with others. Or download it directly below and pass it on. 👇 #CPG #FMCG #ConsumerInsights #BrandStrategy #AI #Retail #GroceryIndustry #CPGLeaders

The grass, and other channels, are not always greener! The final analysis will be about the product and margin. In CPG, I often hear retail-focused brands talk about the magic of DTC and not having to work with the large distributors with massive deductions. I also hear DTC and Amazon-focused brands complaining about perpetually increasing CAC (customer acquisition costs) and lower ROAS (return on ad spend). The truth is that there is no panacea—no "easy button" in either channel. CPG brands today play in the most competitive market ever in every channel. Here are the Vdriven "high-level" success formulas for Retail, DTC, and Amazon: For retail: - A product people will love—and want to buy again - Launched at the right time for both category and consumer demand - With packaging that: - grabs attention, - clearly communicates what it is, and - makes the “why should I buy this” instantly obvious - Priced for optimal performance at shelf, balancing margin and velocity - Supported by brilliant, strategic promotions that drive trial, not just discounts - And fueled by a community that shows up, asks for it, and pulls it off the shelf For DTC: - a product people will love—and want to buy again - for the right audience - on the right platform - with a website that 1) draws attention, 2) clearly explains the product, and 3) gives an emotional or functional reason to buy now - at a price that supports margin while remaining acquisition-friendly - while employing smart digital ad and content strategies to drive traffic and convert - and nurturing a community with the intent to repurchase and share For Amazon: - a product people will love—and want to buy again - in the right keywords & categories - with a listing that 1) captures attention in search, 2) makes it instantly clear what the product is, and 3) builds trust and urgency to buy - with hero images, A+ content, and reviews that convert - at a price that wins the algorithm while protecting your contribution margin - while leveraging smart Amazon-native promotional levers (like coupons, deals, Subscribe & Save) - and supported by external traffic and brand awareness to drive velocity and organic rank It's interesting to note that what is common among each channel is that the product must be worthy of being purchased again, and the margin is always critical. Nothing else will ever matter if we don't get those two right. Founders chasing retail often dream of “easy” DTC margins and owning the customer. Founders deep into the DTC dream of the “free foot traffic” at retail. But both thoughts overlook the actual work involved. DTC isn't just a website—it’s media buying, creative testing, and brutal CAC math. Retail isn't just getting on shelf—it’s sell-through, merchandising, and deductions. Choose your hard. Build a best-in-class team. Then work the playbook. I invite you to share your thoughts on channels. Have you found one much more effective than another?

🔍 What Makes Trade Marketing Work in Modern Trade vs. Traditional Trade? Retail in the CPG/FMCG world isn’t a one-size-fits-all game. The difference between winning in Modern Trade and Traditional Trade comes down to how well you tailor your trade marketing strategy to each environment. Having worked closely with both formats, here’s what consistently drives results on the ground: 🏬 Modern Trade: Data-Driven, Structured, and Visually Competitive Premium shelf space is a must Visibility is everything. Work with retailers to execute detailed planograms and secure eye-level placement. Scale matters National promotions and bundle offers help move volume fast—especially across organized retailers with wide footprints. POSM needs to impress Think digital screens, lightboxes, branded fixtures. The goal is stopping power, not just presence. Data tells the truth Use store-level sales data to adjust tactics, refine SKU assortments, and track what works. Marketing calendars must sync Collaborate with central buyers to align activations with peak footfall periods and seasonal pushes. 🏪 Traditional Trade: Relationship-First, Fast-Moving, and Grounded People buy from people Trust with store owners is your biggest asset. Visits, follow-ups, and shared wins build loyalty. Keep POSM simple and visible Posters, shelf talkers, and clear price cards get the message across in seconds. Trade incentives still move the needle Whether it’s free cases, discounts, or loyalty rewards, motivating the retailer works. Presence is performance Regular visits are critical to ensure planogram compliance, availability, and merchandising. Agility wins The best teams respond fast—whether to stockouts, competitor moves, or feedback from the shop floor. 📌 The takeaway? Modern Trade thrives on systems and data. Traditional Trade thrives on people and trust. Knowing the rules of each game helps your brand not just show up—but stand out. Curious how other FMCG professionals are adapting their trade marketing strategies? #TradeMarketing #ModernTrade #TraditionalTrade #RetailMarketing #SalesExecution #POSM #ShopperMarketing #CPG #FMCG #ChannelStrategy #MarketingStrategy #StoreExecution

I work with various eight- and nine-figure insurgent brands in CPG. As they grow larger, they hire 'classically' trained professionals. Invariably. The worst of the worst bad habits of BigCo managers? Defining the competitive set as folks next to me on the retail shelf. This is NOT how volume gets sourced for the highest growth rate brands disrupting the market. Ever. Not Chobani. Not Dr. Squatch Soap. Not Skinny Pop. The volume comes from consumers new (or returning) to the category. Ignoring the market leaders at the shelf with your positioning is the most intelligent decision you can make as a strategist and steward of your brand. Think bigger than the lazy leaders do. They are lost in narrow 'market share' thinking. Make 2025 the year that your mind escapes the trap of a 'shelf-based' strategy. PS - If DTC taught us nothing else, it taught us the power of selling in public with none of your competition nearby. You get to reach anyone predisposed to your thing. Powerful. #business #entrepreneurship #startups