How CPG Leaders Can Revive Growth: Insights from McKinsey’s 2026 Report

McKinsey’s 2026 State of Food & Beverage Report

McKinsey released an April 2026 report titled State of Food & Beverage: Choices for CPG Leaders to Revitalize Growth , based on surveys of 15,169 consumers across ten global markets. The study highlights that traditional growth models are breaking down, consumer selectivity is rising, sales are stagnating, and investor confidence is slipping.

Historical Growth Patterns

From 2002 to 2012, the CPG sector enjoyed a 9% average annual revenue growth and a stable 22% return on investment. After the 2010s, demographic dividends weakened, consumer attention fragmented, and private‑label and disruptive brands emerged, causing growth to decelerate sharply.

Recent Performance Challenges

Since 2023, the total shareholder return of the world’s largest CPG companies fell about 7%, while the S&P 500 rose 9%. Current sales growth is below 1%, margins remain under pre‑pandemic levels, and efficiency gains have plateaued.

Why Consumers Are Leaving Traditional Brands

Two core forces drive the shift:

Affordability pressure : Global food prices rose over 31% versus a 26% CPI increase; 61% of low‑income consumers now rank price as the most important factor.

Health, functionality, and flavor demand : 57% of shoppers place health among their top three purchase criteria, seeking fresh produce, high‑protein, and nutrient‑dense foods while avoiding artificial additives and high‑sugar products. The rise of GLP‑1 weight‑loss drugs further reduces spending on chips, sweets, and soft drinks.

Four Consumer Spending Shifts That Erode CPG Wallet Share

Shift to private‑label brands : 28% of consumers (34% in the U.S.) now buy more store brands, which are about 30% cheaper yet perceived as comparable or superior in quality and value.

Paying more for “better” : Disruptor brands leveraging functional differentiation (e.g., high‑protein, low‑sugar snacks) capture 13% of U.S. sales but contribute 35% of category growth projected for 2025.

Paying for convenience : Food‑away‑from‑home (restaurants, delivery) grew from 48% in the late 1990s to roughly 58% by 2025, with consumers willing to spend more despite inflation.

Cooking at home : Consumers in Latin America and Asia‑Pacific are cooking more often; U.S. shoppers buy more spices, oils, and sauces, driven by health, enjoyment, and cost‑saving motives.

Two Strategic Agendas for CPG Leaders

Agenda 1: Reshape Portfolio Through M&A and Divestitures

Overall industry growth hovers around 2%, while health, functional, and premium sub‑categories grow >200 basis points. Companies should increase exposure to high‑growth areas and exit low‑efficiency businesses. Examples include Keurig Dr Pepper’s partnership and equity investment in energy drinks and gut‑health, culminating in the acquisition of Ghost, and PepsiCo’s focus on India as a “key anchor market” with a five‑year revenue‑doubling plan.

Agenda 2: Elevate Core Excellence, Brand Relevance, and Productivity

Product wins : Rebuild product superiority across function, form, taste, and flavor. Ferrara’s revival of the Nerds brand with Gummy Clusters generated nearly $5 billion in sales, driving more than four‑fold brand growth.

Refill the funnel : Use sampling, experiential marketing, social rituals, and Generative AI to attract new consumers. Guinness’s “Splitting the G” pouring ritual doubled social‑media shares.

Leverage AI for funding ambition : AI‑driven productivity can save 200‑300 basis points in costs, which can be reinvested. Companies are applying AI to marketing, procurement, supply‑chain, and innovation—Mondelez’s machine‑learning formulation engine has supported over 70 new product launches.

Conclusion

Boards must focus on portfolio reshaping, while the entire organization should boost product strength, acquisition power, and AI‑enabled productivity. Systematically reinvesting the savings creates a virtuous cycle that restores sales, profit, and investor confidence. Chinese CPG firms can apply the same insights—prioritizing health, value, convenience, and digital tools—to capture the next wave of growth.