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The CPG Guys
2025 Review and 2026 Predictions with NielsenIQ's Sherry Frey, Anna Mayo, Chris Costagli & Andrea Binder
00:57:24
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- [00:00]
A
Hey, it's PVSB with the CPG Guys. You know, we talk a lot about this on the show. For CPG marketers today, it's not just about reaching consumers. It's about connecting with them meaningfully at every touch point. Here's the reality. Shopping isn't just an event anymore. It's woven into daily life. And with consumers spending over 90 minutes streaming content, daily entertainment has become central to the shopping journey. Amazon ads unifies commerce, entertainment and open Internet to reach 86% of US households, turning trillions of consumer signals into powerful results both on and beyond Amazon. So visit advertising.Amazon.com to learn more.
- [00:52]
Hello and welcome to the CPG Guys Podcast. Set at the intersection of commerce and tech, your hosts, Sree Rajagopalan and Peter V S. Vaughn explore how brands and retailers engage consumers in a digitally driven world. And now, here are the CPG Guys. Hello and welcome to the CPG Guys Podcast. I'm your puckish co host, pvsb, who also moonlights his head of industry and customer engagement at Flywheel, the commerce acceleration division of Omnicom. My fellow co host, the CRO at Think Blue Consulting, the patriarch of the Raj family media empire, the man known as Sri, AKA Papa Raj. He's busy today following his daughters on their concert tours, so he can't be with us to our audience. Please make sure you're following us on your favorite podcast platform. That way, when new episodes are released, they will appear automatically in your listening stream. And if you are using Apple or Spotify, please leave us a rating to help make our podcast more findable by your industry contemporaries. Also, make sure you check out some of our other other favorite podcasts like the FMCG Guys with a European angle and the new she Commerce Podcast. From a female perspective. You can find links to them in the digital show notes of this episode. So as we approach the end of the year, we thought it would be appropriate to share some expert voices on what transpired in Omnichannel Commerce over the course of 2025 and what we might expect in 2026. Joining us today are four experts from Nielsen iQ, the world's leading consumer intelligence company, delivering the most complete understanding of consumer buying behavior and revealing new pathways to growth. They'll help us with a full view of the commerce landscape in key categories of beauty, health and wellness, food and beverage, and pet care. We hope you enjoy these conversations. So without further ado, let's get to our experts. I want to welcome to the podcast Sheri Frey. She is the vice president of Total wellness at Nielsen iq. Sherry, greetings. How you doing?
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B
Hey, good. Great to see you.
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A
It's good to see you, too. Hey, we've got a couple questions for you as we round out the year and look towards the next one. So thank you for joining us. Here is my first question.
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It seems that 2025 was a year where wellness was front and center focus. I know certainly it was for me. I started using prebiotic and probiotic gut health.
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Drink mixes. But I want to hear from the expert. Give us a summary of what 2025 looks like in the wellness space.
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B
Oh, absolutely. So, you know, one thing too. You know, at niq, we look at wellness in terms of how consumers are looking at it, which is their own personal health and wellness, the health of the planet and also the health of others and kind of social responsibility. So those are the pillars of how we look at it. And I think why that is important is we have continued to see, just like you said, wellness is top of mind for so many consumers. And we're really trying to figure out how do we deal with maybe chronic things and immediate things, as well as looking forward and trying to be much more preventative and proactive and live as long as we can, but not just living as long as we can, living well, living healthfully, thinking about things like our health span. So it is just been really a year where you've just seen so many things that have kind of continued to grow. So one thing you just mentioned, digestive health, you know, that has just continued to be an area where we've seen a huge consumer focus. And it's not just in probiotics or, you know, vitamins and supplements, but it's really across the store. And it's, by the way, not just for us. It's even in our pets and our and our animals. So digestive Health continues to be a big piece. We also really saw, Peter, you know, over the last few years, there's been this growth and kind of evolution of consumers thinking about, you know, how they define wellness and including their mental health and kind of everything from kind of brain cognition to how they're thinking about their work life balance. And that has continued to be an area of focus. Performance is, you know, really something that we've seen continue to grow. I mentioned, you know, longevity. This is, is an area that has really, you know, started to be increasingly important, by the way, not just for older consumers or, you know, those of us like the Gen Xers, but actually we're seeing a lot of that in younger consumers. As well. I will tell you the one thing that people are surprised at. This has been a year where, you know, there's been a lot of concern around the economy and kind of consumer confidence. We have continued to see better for products, better for food and beverage products outpaced, continue to really outpace total food and beverage. And so we know again, while consumers may feel a little bit stressed, they're not, you know, they're not sacrificing things around their health overall. We also, you know, we hit the ground running. If you think about this year and kind of the state and federal legislation that make America healthy again, make our children healthy again. Health has been on the forefront, not just of consumers minds, but also legislative officials. And you know, from, if you remember January, we saw the banning of red dye 3. And you know, we continue throughout this whole year we've just seen such a focus from consumers on ingredients, you know, paying more attention to what's in their food, both what's in and not in their food. And so we anticipate that, you know, we'll, we'll continue to grow. But that the one big piece about that, Peter, that we have been really surprised with was when Red Dye 3 was banned in January. We saw an immediate consumer reaction. And we've not historically seen consumers react so much to legislative things like that. They stopped consuming red dye 3. They stopped consuming red dye 40. Now I will tell you, we did actually see it come back, but the fact that we saw such an immediate reaction just says you've got a very, very empowered consumer who's paying a lot of attention. I will tell you the big question. We always have GLP1s continue to grow, continue to see shifts in consumer behavior. So, so the, you know, people that are on GLP1s, we have seen them, you know, change in terms of in many cases eating more healthfully, more protein, more produce, more things around hydration, more things around gut health. It has not tanked the food industry. We do see some shifts in terms of what people are buying, but that is just really continued to be a growth area, but really an area where we see an increase in health. You know, people that are on the glp, not only what are they eating, but also, you know, what, they start buying more health and beauty products. You know, it's a really fascinating kind of shift from a consumer standpoint. I probably can't not talk about protein. The protein showed up absolutely everywhere in the store. And we in general, you know, we're seeing more of this kind of protein whether it's in grocery, whether it's in the supplement aisle, it's definitely been having a moment. You know, consumers are paying more attention to how much protein they should be having, not just because of the GLP1s, but for many other reasons. And so that's been an area that's been interesting to watch. And the one that's kind of emerging is fiber. And, you know, again, playing into this, you know, the, the gut health and the digestive health that kind of is. Is one of the ones that. That we're starting to watch. So I would say the last piece is that wellness is everywhere. You know, probably more than ever, we saw wellness in new channels. So TikTok shop and seeing beauty retailers starting to carry more wellness products, it just really has been a space that has blurred all of the lines.
- [08:39]
A
Brilliant. And how is Nielsen IQ turning all this information into signals that consumer goods manufacturers can use to drive their strategy?
- [08:52]
B
So, you know, we are really watching everything at the most granular level. So to the point of we're watching ingredients, we're watching grams of protein per serving. So we're constantly watching what's happening across the entire store. And we're watching who are the consumers. Because in many instances, as you would expect, a lot of wellness trends do start with a set of early adopters, and some of those never actually progress. And as you know, trends are moving faster than they ever have before. And so what we're doing with our clients is we're really helping them keep their eye on these very new and emerging spaces and then really understand where are they in terms of the breakthrough, or is this something that's probably just going to wane and go away? And so we're constantly building everything up, though, from the most granular ingredient item, consumer level to really see what's driving the larger trends overall.
- [09:48]
A
That's great, Sheri, thanks for the 2025 recap. So let's, let's get out the crystal ball and let's look into 2026. What should we be expecting from the industry, from consumers? What trends will continue? What trends will emerge? What are your thoughts?
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B
Well, you know, I think one of the ones that is probably, you know, front and center for all of us right now is the increasing costs of healthcare. And we're all, you know, as we're kind of doing our, you know, annual renewals, and that's a big topic for. For many consumers. And I think one of the biggest pieces of this is you will see. And we're really seeing it already more and More consumers who are needing to be empowered with their health. And you know, we, we are kind of calling it this DIY of their health care, making some decisions, making some trade offs. As we looked into 2020 and we asked consumers, how are you going to spend more or less or the same on health care? It was either the same or more. There was nobody saying that this is, I'm going to spend less on healthcare, their health overall. And so we anticipate again, health and wellness is going to be at the forefront of the consumer's priorities. And what this will mean is you're going to see, you know, more and more increases, we believe, of people taking things like the GLP1 drugs. If you look at the addressable market for GLP1s, it is about half of American adults just looking at things like obesity and diabetes. And as you know, there's, you see some more approvals for other indications. We think that will be kind of a growing area again that will enables and empowers consumers to be paying attention to their health in new ways. We also are really thinking and looking closely, Peter, at what health tech is doing. So we know more and more consumers are wearing health tech oura rings, whoops, et cetera. And it does change their behavior. It really accelerates behavior. As we see, you know, probably have seen this yourself, more consumers who are not diabetics but wearing continuous glucose monitors. What's happening is a lot of the health tech is really, like I said, it's changing behavior because consumers are seeing the immediate reaction to their behavior and so they're participating. And as we think about what this is going to look like in the future, we know the tech is going to be much more predictive. And so you will see again this idea that as a consumer, I'm in charge, that will continue more and more. We'll see more of the diying. We'll also see more of the kind of tech empowered decision making when it comes to kind of the, you know, some of the broad strokes of what we anticipate we're going to see. You know, we really have seen a lot this past year in terms of this convergence, a lot of blurring. I would say 2026 is going to be a continuation of what we saw in 2025, which is blurring, blurring of the lines between food and supplementation. You know, that's been one of the most fascinating things that we've seen is ingredients that have historically been over in the vitamins and supplement space growing very dramatically in the food space. Some of those being really interesting ones that are tied to specific women's health conditions. But so that we know is an area that consumers are interested and we know that brands and retailers are really kind of looking across, like how do we play across the aisle and how do we innovate quicker based on what's already happening in the store? I mentioned this beauty and wellness, we definitely continue, anticipate, we'll continue to see this convergence of both wellness products being sold in beauty outlets. But even as you think about wellness from a consumer standpoint, the idea of my health inside, but also my health on the outside. And so really, again, that we believe will be a piece, we'll continue to see this idea of kind of shifting from health care to self care and again, consumers in charge. And then the last piece is, I would anticipate one of the fastest growing areas that we've been watching is TikTok shop and how much. Of course it started with health and beauty, but now it's healthful snacks, it's vitamins and supplements, it's over the counter. Well, not always over the counter, but personal care sorts of things. We just continue, we anticipate, we'll continue to see consumers buying wellness products in brand new places, which gives a lot of opportunity for the industry.
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A
With respect to your comment on devices having predictive capabilities, do you anticipate a fundamental shift in DIY from being more curative to more preventative in terms of.
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How people can take care of themselves? And do you anticipate, say at the CES show coming up this year, you're going to see more and more devices and more and more products kind of following this particular trend?
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B
Absolutely. If you think about our health tech, just in general, it's really in the past it started and it was much more about kind of monitoring one thing, right. Your steps or your calories. We're now in this moment with our tech where it's kind of, it's a bit of a companion sorts of products. Right. So we're seeing a little bit of, okay, I wear, you know, aura ring. I Peter, I have an aura ring. And I always joke that we're all in a cult because when we first time you meet someone with an aura ring, the first thing you say is, did you, did it change your drinking? Has it changed, you know, how you sleep? You know, we are really kind of participating with the health tech and there you're starting to see also curation. Right. Like there's in some cases the tech is helping us where retailers are nudging. Us in our baskets, you know, like, hey, here's a bit more of a healthful option for you to choose. And so there, there's, you know, elements of that that are, that are kind of happening or curated food, you know, food products in terms of, you know, meals being put together. For us, the future is really, it's going to be an ecosystem and you're seeing it today, right? It's not just what we're wearing in our bodies and the future of what's on our bodies, it'll be tattoos, it'll be in our mouths, it'll. Behind our ears, you won't even know I'm wearing. Health tech, but also our toilets, our refrigerators, right? Like, I mean, some of the fascinating tech things that you've just even seen launch this year and the types of things that we'll be measuring. So, you know, you saw some of that even last year at the CES where, you know, saliva for measuring hormonal health and, you know, just being able to, to make it easier for the consumer. So I won't be logging what I'm eating. It'll be, you know, I'm already, this is already existing, right? I'm taking a picture and it's telling me about the, the health. Your question, though, what does this mean? It definitely will mean that the. What is curated for us, and I think curated is the perfect word. What is curated for us will be much more aligned with our health priorities, but also predictive needs of what we need. And, and again, where. And not just ourselves, by the way, right? Our entire families and where we want to go with our longer health, health goals. That's really where this is all going. And I think if you think about it from our standpoint, it's not like we're going to the doctor once a year and they're saying, okay, you need to lose some weight and eat more salads.
- [17:14]
C
Right?
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B
And we kind of. We do and we don't. We can't remember if we. This is really where we're live, tracking our behavior. And so we're, we're able to really make those shifts on the fly. And I think you'll see a lot of, in many ways, it'll help a lot of improvements for people's health.
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A
It's fundamentally changing the way we even talk with our healthcare partners. My doctor now has a wealth of information about me from the devices that I use that is much more.
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Able to help me from a preventative side. And it's much more tailored to what I'm looking for. So I absolutely agree with you. Sheri, thank you for taking time out of your day to speak with us about where we've been from a health and wellness perspective in 2025 and what we should look for in 2026. I want to welcome to the podcast Anna Mayo. Anna is the vice president for the beauty vertical at Nielsen iq. Hi, Anna, how you doing?
- [18:12]
D
Hi, I'm great. How are you? Thanks for having me.
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A
We're excited. Well, as we look to close down 2025, we're excited to have you on. I've got a couple questions for you. Would love for you to start with a summary evaluation of the beauty space in 2025. What trends emerged? What changed? What really excited you about the beauty category in this calendar year?
- [18:40]
D
So, as I'm sure you know, beauty is fast moving, trend driven. When I was thinking back on the past year, I think we've lived, you know, five trend life cycles already. It's just there's always a new thing to talk about every single month. But, you know, as, as an overall theme that's really come out of the year is how essential beauty has become to consumers. So I'm sure as you've been talking to some of my colleagues who work across different verticals, we know that overall 2025 had been a year when people are making choices, right. They're deciding what to buy, what to forego. Overwhelmingly, beauty has been an area where they're continuing to purchase, right? So even as they're making choices in other areas of the store and cutting back, they are continuing to prioritize beauty. And, you know, there's a lot of reasons for this. It's a quick pick me up. It makes people feel better. There's also just such a breadth of new brands and innovation and new exciting things to try that give people really, you know, an excuse to indulge and to, to purchase something new. But when I, you know, what I've really been talking about a lot this year is the biggest change in evolution. And beauty is less about a product trend and it's, it's a little bit more macro, but it's a change in how people are shopping. So beauty has become so digital first. We are about to reach a place where more than 50% of sales are going to be happening online. So I believe we're the first CPG category in the US to get even close to that. And this is really driven by two main culprits. So it's Amazon and it's TikTok shop, right? Amazon is now the number one beauty retailer in the US they are shifting a lot of those everyday favorite purchases over to Amazon. Whereas maybe in the past you would make a special trip to Walmart or a special trip to Ulta. You know, it's just become this habit to, let's just order on Amazon. I know it's going to be a competitive price. It's going to arrive at my house in two days and it's going to be exactly what I'm looking for. TikTok shop is also playing a role here because they've been the first retailer who's really proven that you can bring impulse purchasing to an online space. And so that is all about discovery, where people are finding out about new brands. You know, 30 seconds or less, they're completing that whole marketing funnel from finding it out about something to actually completing the transaction. So there's a lot of, a lot of growth coming from those two retailers and our more traditional beauty retailers, who just a few years ago were the really big ones that we were looking to, you know, they are shifting to catch up. They're evolving, they're changing how they talk to their consumers. In light of this big push from online first retailers Amazon and TikTok shop. So those are kind of the shopping trends. But then when we look at what types of products are selling and what consumers are looking for, we're underneath this big indie revolution in beauty. So indie brands continue to steal market share. It has kind of never been easier with TikTok Shop and Amazon to launch a new brand to get to market really quickly, to leverage influencers, to educate people about your brand. And we're seeing indies just continue to grow and grow every year. We're also seeing this big merging between what beauty really means. It's kind of evolving and it's turning bigger than beauty. But think about beauty and wellness. So it's not just about looking good anymore, it's about feeling good as well. And products that can help support your mental and physical health. Those are kind of all merging together, creating a lot of opportunities for retailers to expand their sets and innovation opportunities for brands and as well more on the product side. So we are seeing in skin care specifically, bit of a simplification and kind of a streamlining, right? So people are paring down their routines a bit, going back to the basics. We are also seeing really impacting in skincare, the K beauty boom. So brands coming from Korea are already over $2 billion of sales in the U.S. they are activating on a lot of these trends that I've been talking about so simplification of routines, more affordable products as well as really leveraging TikTok shop to introduce their brands into the US fragrance continues to be our reigning number one growth category. If you remember the past two years we've seen like 30 to 40% growth for fragrance. It has moderated about 18% but still the fastest growing category in beauty. We've seen a lot of momentum towards lighter fragrances, towards things like mists and we're also seeing fragrance extending into other categories. So for the first time in many years, scented lotion is outselling unscented lotion. Scented body washes are booming again. Hair scents are coming on the market. So whatever you can put fragrance in that's, that's something that's appealing to consumers. And the cosmetic side, you know, we're still continuing to see it all be about lip cosmetics and different lip glosses and oils and liners. So it's a lipstick and index, very much alive and well. And then finally I'll end it. One last trend that we're seeing is the rise, the impact of aesthetic treatments. So we are seeing more and more people going to med spas and to dermatologists for things like Botox or laser treatments or microneedling. And that's actually changing how they're thinking about their skincare routines. So it is, is impacting their at home routine. They're thinking about post care routines. So I definitely encourage brands to think about, you know, it's always broader than your specific category.
- [24:28]
C
Right.
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D
There might be things happening in other parts of consumers lives that are going to impact their at home consumption.
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A
Let's look towards 2026. It seems from what you said in 2025 with all this growth, it's not a zero sum game. Amazon's growing, but guess what, Ulta's growing too. I was in a DG market in Nashville last week and, and there was an entire end cap devoted to E, L F beauty. So it seems that it's being quite pervasive in many different retail formats. What should we be looking at going into 2026 from your perspective?
- [25:01]
D
Yeah, I keep joking that I think we'll know beauty has peaked when it's in Home Depot. So if you ever see it there. I was at Staples this weekend and they had a pretty good assortment of beauty products in there. So you'll have to let me know if you see it. But yeah, so 2026, you know, I think it's, I think we always are a little cautious when we're Going into a new year, I mean, the beginning of 2025, I don't remember we were. If you remember, there was a lot of caution too when we were really worried about tariffs and supply chain. But you know, the consumer just kept consuming beauty. 2026, you know, again, it's kind of an interesting time we're in right now where high income consumers are feeling really good and they're spending and lower income consumers are not. So we were just looking at some of the data in beauty the other day. Low income consumers are actually declining in spend, but high income consumers are growing 18%. So you've really got this dynamic where the growth in this category is coming from a smaller and smaller group and.
- [26:08]
The stock market's a little all over the place. There's a lot of unease people are feeling. So to me is kind of the risk to think about, right? If, if things go south, are people going to continue spending? Is this going to be an indulgence that's affordable, right, compared to a new car or something, or will they be pulling back? Across the board, we're also starting to see prices increase. So we didn't see a lot of that in the beginning of 2025, but now as the tariff impacts are more fully absorbed, we are starting to see prices go up. So again, that'll be another lever that's kind of pushing on consumers and how high can things go before they really start making changes? AI is already hugely impactful on beauty. I think it's only going to increase. I mean, there are so many brands and so many products and so many ingredients and it's very confusing, right? Unless you're someone like me who thinks about this every day and knows what all these ingredients do. But you know, people really want to just type into ChatGPT, give me a skincare routine for my dry skin that's, you know, under $80 and have it spit back a routine. And so I think you're going to see a lot more of that. I've seen some estimates that, you know, up to 17% of beauty Google searches have shifted over to chat GPT. Now with this integration with Shopify, this is all going to be impactful in the coming years as well as how us in the, in the industry are working, right? Companies are changing how we work. We're all working in different ways as we learn. I think another big question I keep getting is are we going to continue to see a fragrance boom? You know, again, growth has moderated. We were down from, you know, 30, 40% growth the past two years down to 18% but it's still a top growing category. It's still recruiting new consumers. People are spending more, people are taking more trips. So you know, there's certainly a lot of potential for that to continue to grow. And as I said earlier, you know, definitely watching fragrance extend into other categories like body care and hair.
- [28:13]
Things like that. And then, you know, I think there's a lot of potential as we look around the store for which ingredients are trending, things like hydration, protein, creatine, GLP1 support, like looking for those types of claims to start making their way into into beauty in a bigger impact.
- [28:33]
A
So I hear you saying three trends in particular.
- [28:37]
Wellness beauty. I hear creator driven beauty with the rise of TikTok and I hear agentic beauty. That sound accurate to you?
- [28:48]
D
It's a great summary. I might steal that my next LinkedIn post.
- [28:52]
A
Anna, thanks for taking time out of your day to give us a summary of key thoughts from 2025 and where you think we should be looking for 2026. Apprec your insights.
- [29:02]
D
Thanks for having me.
- [29:03]
A
I'm now going to introduce Chris Castagli. He is the vice president of Thought leadership for Food and beverage insights@NIQ. Chris, welcome. How you doing? Thank you.
- [29:13]
E
I appreciate you for having me today.
- [29:16]
A
Yeah, Chris, we are, we're looking back at 2025 and looking forward towards 2026 and we have a conversation going with you and a number of your colleagues in niq. So without any further ado, let's, let's get right to it.
- [29:31]
E
Sure, that sounds great. You know, as I, as I think about 2025 and I look back to when we were first entering, you know, food price was really the number one thing that was on the shopper's mind. It was the number one concern. And what we saw from consumers very early in 2025 was this desire to be much more intentional about the purchases that they were making, the way that they were spending their money. When we look at where we are Today, November, around 85% are saying that they're seeing higher food and beverage prices at the shelf. And around 94% say that they're concerned about the way that food prices have continued to increase throughout the year. 57% extremely worried. So as we look back and we see how this has kind of played out with consumers being more intentional. We've seen this desire for sales, for deals, consumers looking for these more when they're at the store. We've also seen consumers cutting back, really pulling back on those Categories that are more nice to have but not necessarily deemed as essential to their shopping trips. We've seen around 50% of consumers buying more private label today than they have in the past. We're dining out less often. We're choosing to make more of our own meals at home. But interestingly, within that, we're seeing consumers being more intentional about the way they're using leftovers. They're being more intentional about the way that they're using fresh products. Really focusing on those before they spoil. We've already spent money on these items. Let's use them before they go bad. So we've seen this very financially constrained, very financially concerned shopper really emerge through 2025. And there's a group within the consumer set SNAP households which have really faced even more financial constraint. You know, when you think about what's happening with the SNAP benefit program overall in the media, you've heard about SNAP benefit reductions. So fewer dollars being provided to these households. There's been a lot of discussion around state level waivers that are excluding certain products from being used under the SNAP program or purchased under the SNAP program. And most recently, of course, there was the disruption to the November benefit payment which affected around 42 million Americans. So we've certainly seen SNAP and SNAP households really take center stage, especially recently. We know from the past when SNAP benefits the dollar amount is reduced, that has a ripple effect across the industry. It's not just SNAP eligible products that feel that effect. And we've seen that the waivers being launched or being deployed in certain states are causing a lot of confusion, not only for consumers, but also for manufacturers and retailers putting billions of dollars potentially at risk. And I think the November delay in SNAP benefit payment really showed the food insecurity crisis that we have here in the United States. Around 39% of SNAP households can only satisfy their basic needs for up to 7 days without benefits. 17% only up to 3 days. I recently published a piece on the impact of the SNAP benefit delays and I published on day 13. So that means that 39% of households on SNAP were having to make choices at that point. Which meals do I skip, who in the household eats versus who doesn't? Or what essentials am I going to maybe forego? Could be utilities, could be healthcare, because I need those dollars for food. So we've really seen this financial constraint affect consumers and it's disproportionately affecting some consumers who are even more at risk when it comes to their household finances. There's been a huge focus on ingredients the MAHA movement, Red Dye 3 officially banned from food and beverage starting in 2027. And what we saw throughout 2025 was that consumers actively pulled back. If you think about a category like candy, gum and mints, a lot of colorful products in that category, products in that category that contain red dye 3 saw their sales drop about 7% over the past year. And it wasn't driven by the fact that manufacturers were being proactive, changing the ingredients, changing the products that were on the shelf. It was really driven by the fact that consumers were choosing other products. They were choosing products free of that artificial color. When you actually look at candy, gum and mints that are free of artificial colors, overall their sales grew about 10% over the year. We've got discussion around seed oils, discussion around potentially other harmful artificial ingredients. And it's causing consumers to really think, think more critically about what they're purchasing, but also become more aware. 64% right now would tell you that they are all for banning artificial ingredients, not just the ones that have been talked about. What's interesting here is that we're seeing technology have a huge role. Technology is enabling shoppers to see behind the curtain. It could be a simple filter on a retailer's website, enabling the consumer to find only gluten free products or only high protein products for example, but it could be something more sophisticated, could be a third party scanning app that in real time reveals a product's report card to the consumer and gives them suggestions for higher scoring. Potentially better alternatives could be food health scores that are available on some retailers websites, or increasingly artificial intelligence which is taking on that role of the personal shopper, the personal assistant for consumers and helping with that decision making process. So we're seeing that technology is starting to change the rules. It's enabling shoppers to be more well informed if they choose to. And it's making it simpler for them to do that. The effort that they have to put in isn't as high. And that's important because we have a group of consumers, the GLP1 consumer that obviously made a lot of headlines over the past year. And these consumers have very specific needs from food and beverage. It's high protein, it's high fiber, it's digestive aid. But what we've seen is that this consumer group can drive disproportionate growth where a product, where product characteristic really matters to them. Think about something like probiotics. It aids with that digestive concern that a GLP1 consumer has. And you see 270 days into therapy, probiotic consumption grows almost 200%. So there are certainly opportunities with the GLP1 consumer, we have to understand what that shopper is looking for. Obviously I only touched on a few themes from 2025. There's a lot more that happened. We had tariffs that was a major focal point, impacted prices, drove a lot of that shopper concern over food price inflation. We saw egg prices skyrocketed and you know, as you look at categories now and some of the things that are prevalent in the media, Ground coffee over the last month increased 26.4% on a price per volume basis. Fresh beef prices are up nearly 17% over the past month. So as I think about where we are in 25 that the journey that we've gone on and where we're heading in 2026, the thing that jumps out at me is that affordability really is what's going to set the tone for what's coming in the new year.
- [36:54]
A
Wow, Chris, that was a comprehensive but concise assessment of 2025. It seems to me the, the great theme is that consumers are empowered more than ever primarily through technology to understand the products that they're buying. The challenges are making them alter their historical decision patterns and they are able and willing to do exactly that as the information that they are consuming is helping them manage their budget and manage their health goals to accommodate their ongoing lifestyle. So Chris, let's now turn and look at 2026. What's top of mind for you as you think about where the food and beverage is industry is going to go in the coming year?
- [37:46]
E
Sure. I think for, for 2026, you know, we see that rising food prices still remains that number one concern for shoppers. So I think we can expect to see that consumers are going to be equally price conscious in the new year. If you think about where consumer confidence is right now, we know that consumer confidence is low, whether it's inflation, job insecurity, the economy. Anybody who's looked at the stock market or their retirement savings recently is probably feeling the effect of that and the potential AI bubble that's out there. I think you've also got the concern about AI potentially leading to job insecurity replacing jobs that are held by people today. So I think in 2026 price consciousness is going to continue to be front mind for consumers, front of mind for consumers. It's going to be looking for those lower priced brands choosing private labels. We already know shoppers are leaning into those types of. And you know, when you think about private label, private label delivers for consumers the rise of private label has been a very deliberate and intentional journey. These are products that started off as very generic feeling items but today they're not. They feel premium. They've got high quality packaging, high quality ingredients and they're, they're really positioned perfectly right now to meet the need that a price conscious shopper has with something that really truly delivers value and not, not just low price value, true product value. So I think we're going to see more private label, I think we're going to see more focus on lower cost retailers, retailers that really drive that value equation for consumers. We're going to see deals searching. So I think we're really going to see a lot of focus there. Consumers trying to get as much value as they possibly can out of their purchases. I think the big focus, the big unlock for manufacturers in 2026 is going to be thinking about that value equation and in my opinion recalculating the value equation. As I think about value, value to me is a function of price and the justification for the price. It's all the things that your product delivers for the consumer in return for the consumer's dollars. It really doesn't matter whether you're an essential product or you're a luxury product. You're both bound to that same equation. It's the price and the justification for that price point. I think the mind hurdle to get over is that the idea of an essential product doesn't mean it's a cheap product and a cheap product doesn't mean that it's an essential product. An essential product means that it delivers value, it delivers justification that warrants the consumer spend. So as we see shoppers pull back, as we see shoppers be more price conscious and really seek those items that deliver value, it doesn't mean it has to be a cheap product. It has to be a product that delivers value. So as you think about that, it comes down to the benefits, the health and wellness benefits, the functional claims, the packaging, the what you deliver to the consumer in return for those dollars. I think that's the big unlock for manufacturers is as we talk to and engage a very price conscious shopper that's dealing with a lot of concern about their finances.
- [41:07]
I also think we're going to see a lot of disruption with the way that GLP1 usage is evolving. The price of those medications is coming down and what that means is that it's going to widen the access that that medication has to consumers. For those who aren't able to get GLP1s through their insurance, the price to purchase those medications out of pocket is going to become less expensive. That means more people are going to be on those medications. That's going to change what the basket looks like, what the trip to the grocery store, the retailer ultimately looks like. It's going to change the focus on characteristics that products have. It's going to be those high protein, those low sugar, those high fiber items. But there's a lot of opportunity within the product set to reach the GLP1 consumer. It's not just protein, it's not just fiber, it's not just low sugar. There's opportunities with meal services and solutions that make a meal for a GLP1 using consumer the right size and simpler for them to access. There's an emotional support component, there's skincare components. There's so many opportunities out there for, for the industry to talk about what the GLP1 shopper needs and really be prepared with a product that is going to meet a widening consumer base that are using these medications.
- [42:28]
I think we're going to see a lot of focus on ingredients. You know, with the Maha movement, we've already seen focus on things like pesticides and preservatives and artificial colors. But I think we're going to continue to see a focus on ingredients not only because the administration is focusing on it, but because more and more consumers are adopting technology. They're using those third party scanning apps. I see more and more people when I'm at the grocery store scanning products with their phones before they either put them back on the shelf or put them in their basket. So this focus on ingredients I think is certainly going to continue and it's really going to change the types of products that shoppers buy. I did some research earlier this year to understand the way that those third party scanning apps can affect trust that a shopper has with the brand. If you have clean ingredients, you're very transparent about that. You have a product that that's avoiding artificial, that is a pathway to driving trust with the shopper that's using technology to help them make choices. You have artificial ingredients, you have things that are undesirable to the consumer or things that the report card focuses on that you may be don't talk about a lot with the consumer. That is a way to break the trust with that shopper. So I think this focus on ingredients, the focus on transparency, clean labels and maintaining and building trust with consumers has to be front and center in 2026.
- [43:58]
I think the last big area is around the way that people shop we, we see more and more consumers are going online to purchase groceries, you know, and it's not just shelf stable type products. We see consumers going online to buy frozen products, refrigerated products. The sale of ice online for either home delivery or in store pickup grew 70 something percent over the past year. We're seeing consumers use online. But I think the inherent challenge there for a lot of manufacturers is this idea of impulse purchasing. It's a lot harder to get impulse purchasing online. Consumer search is exactly what they're looking for. They add it to the basket, they're not walking the store, they're not standing at the register waiting their turn, seeing the impulse items that are there. So this idea of connecting impulse for the consumer online is a lot harder. But you've got social media and the evolution of social media driven shopping changing that. Think about your social feed. Your social feed knows you better than you know yourself. It's serving up things that are interesting to you, that are relevant to you and it's increasingly serving up products that are interesting and relevant to you. In my opinion. I think we're seeing social media, social shopping is really evolving as the place where CPG impulse happens. And I think we're going to continue to see that in 2026 as more people try social media, more people try social shopping and see that it truly is connecting them with products that they didn't know about before, products that deliver an experience to them that they hadn't expected. I think there's a lot more obviously that's going to affect 2026 and really set the course. But these are some of the big things that I'm paying attention to as I think about the trends that are coming and what's going to impact the industry.
- [45:45]
A
Chris, thanks for taking time to take a look back at 2025 in the food and beverage sector and where you think 2026 is going to take us. Appreciate your insights.
- [45:58]
E
Absolutely. Thank you so much for having me.
- [45:59]
A
I'm very pleased to welcome Andrea Binder. She's vice president of Pet category Insights at niq. Andrea, how you doing?
- [46:07]
C
I'm doing good. Thank you for having me.
- [46:10]
A
We are delighted to have you. You know, at one point in my career I work for a pet products manufacturer. So this is a topic very near and dear to my heart and I can't wait to hear what you have to share with us. So, two questions. The first one is looking back, tell us some of the major activities, happenings and insights you drew out of observing the pet category in 2025.
- [46:32]
C
So I think similar to many of the other kind of CPG departments, 2025 was a softer year of growth for pet care in store sales have been tough. It's been a source of decline for the category again in the first part of 2025. But we are seeing online still grow double digits, although I will note a little bit slower than that in 24. And so I think a few things that have really driven this again, like all other CPG categories, 23 and even into early 24 was tough from an inflationary perspective, right? And it caused consumers not just to pull back, but, but to really change the way that they spend in those discretionary categories. Things like leashes, collars, bowls, you don't need to replace that like you do an empty bag of dog food, right? And so while that pullback has softened as the prices have flattened a bit, they have new ways of spending in these categories, right? And so we've seen Amazon and specifically third party Marketplace Amazon with these value offerings really start to capture a significant portion of those consumer dollars. So Amazon third party alone now captures 30% of pet supply sales in total. And at least half of pet supply shoppers have made one purchase on Amazon third party this year already. And so again, like, especially as we go into this holiday time, I only imagine that that trend is going to continue in the rest of the year, really kind of driving a lot of change for the category.
- [48:13]
We've also seen factors around pet population really drive differences this year that have have been tough on the category. The pandemic drove such ownership increases, right? Especially though as the world has changed, folks have gone back to work, economic uncertainty has caused so much caution. People aren't replacing their pets like they used to, right? Especially dogs. And so that population stall of dogs has caused food poundage decline and pet food drives so much of the sales for the category that as you see a pullback in dog food, it really drives the whole department down pretty significantly. But opposite of that, some good news, we are seeing a bit of growth around the cat population. They're often easier to care for, more accepted in various forms of housing, in kind of estimated to be about half the cost of ownership from a dog. And so even the traditional categories, cat food, cat treats, cat litter, are outperforming almost every other category in the space, right? Both in store and online.
- [49:20]
And then I don't think I could talk about 2025 without touching on fresh dog food in the pet space. And so fresh food has really started to drive a bit of the performance that we've seen here. And so thinking refrigerated and frozen form.
- [49:36]
And requiring that temp state so never shelf stable. Those formats because of their price have been able to offset some of the decline that we've seen. And so we did a survey a few months back and we found over half of dog owners are actually or have purchased at least once in the last 12 months. They're considering the format and it now makes up 7% of the sales for for total dog food. And so that premium offering has been able to offset over 80% of the declines that we've seen in the dry and wet spaces. And I just think that the expansion of that assortment and the kind of continued growth of that is a big driver to why petcare has been able to kind of maintain their positive growth this year.
- [50:25]
A
Thank you Andrea. That is very insightful. I the whole cat dog juxtaposition is very fascinating. You know, at the beginning of the pandemic most of the shelters got cleaned out of all the dogs because people were looking for companionship. And obviously that has changed. And and now we're back to the it seems like the cats are on the rise. As a friend of mine has a who's a cat owner, has a pillow in his apartment, it says cats have staff, dogs have owners and that's the way, that's the way it works. I can confidently say though that I have had zero impact upon the overall pet category economic dynamics given the fact that now my only pet is a pet rock.
- [51:07]
C
Maybe in 2026, maybe it's your year.
- [51:11]
A
Let's hope it is. Let's hope it is. All right, let's put 2025 in the rearview mirror. What are you thinking about as we go into 2026 relative to this particular category? What are dynamics and trends that you think could be emerging that manufacturers should be really considering for the coming year.
- [51:29]
C
We are expecting and kind of what I'm hearing in the industry is a bit of rebounding. Right. And so like 2025 was spot but hoping to kind of bring back see stronger year over year performance next year. And I think it's going to come from a few spaces. So I don't think the online space is slowing down. Right. I think consumer penetration on Amazon just continues to grow. We're seeing subscription service utilization also drive so much growth and as you look at it in the food space, it's outperforming the non subscription sales. Right. And then I think as pet parents start to adopt AI as a supporting member of their Pet care team, we're seeing it kind of in a diagnosis space. We're seeing it in recommendations for how to care for their pets. So many spaces. I just think it's going to continue to propel that online space forward. And so right now, where online sits at about 45% of the category, I think in 2026, we're going to get closer, if not all the way to a 50, 50 split between in store and online, which is a big spot for the department. And so I think things that manufacturers and even retailers need to think about is I talked about fresh food and how it's driven growth in 25. But what I see as the biggest issue is the cost barrier. Right. The fresh dog food is 3 to 5x the cost of dry dog food on a per pound basis. It stops so many consumers from even entering the space. And so the thing that I see is as manufacturers or even retailers start building assortment and driving consumers into this category is thinking about how to break down that cost barrier. How do they educate consumers on utilizing fresh as an additive to their pet's diet versus a replacement? Right. And so split that cost differential in half. Right. So they're purchasing their dry food and they're adding fresh to it. I think that's, you know, kind of. I've seen a couple of manufacturers lean into that education piece in the past few months, and I think that that's what they we've got to continue to do if we want to offset a lot of that decline we've seen in, in the dog food space. I also think pet supplements is another area that's going to be really crucial. Pet parents are continuing to look for proactive ways to care for their pets versus reactive ways. And often it comes in the same way they think about their own health. And so as we have seen supplements kind of ride such a wave for human health. It started in the pet industry, and I only see that propelling forward. I think the function varieties, the form varieties, they continue to expand. And in 2026, I only think we're going to see more of that effect.
- [54:19]
A
Andrea, it seems to me like companies like PepsiCo may be rushing to take their poppy prebiotic probiotic soda and start adapt adapting it for the pet world. Never have I seen in my lifetime the term fur baby present in so many conversations among my friends. I think that is a big trend we should be paying attention to.
- [54:42]
C
Oh yeah. I think just in some recent survey work we've done, it's like over 80% view their pet as an equal member of their household to the human members of their household.
- [54:55]
A
It's equal. I know a couple families where the maybe more pets are substantially higher in the in the pecking order than some of their children or significant others. So exactly. Listen, Andrea, thank you so much for taking time to share with us your thoughts on what happened in 2025 and where you think we're going in 2026. Very insightful. Appreciate your your commentary, of course, of course.
- [55:24]
C
Thanks for having me.
- [55:25]
A
What fabulous conversations. Let me now thank our audience for listening to this great episode. Do leave us a rating and review on Apple Podcasts, Spotify or your favorite listening platform. It informs us how we are doing as well as if we are having the right conversations. To all of you, thank you from SRI and me. You make this show happen to our sponsors. Whether this podcast, our parties and events, hosted dinners, having us on panels, speaking at national sales meetings. Thank you, thank you, thank you and a shout out to the 40,000 plus LinkedIn followers who turn to us for education and entertainment. We really do appreciate your trust. That's a wrap of this episode. We look forward to reconnecting with you on the next episode of the CPG Guys Podcast. Goodbye.
- [56:17]
Foreign.
- [56:22]
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