2025 US Consumer Foods: Five trends to watch this year

Here are the top five topics, viewed from a US perspective:

1. Trade headwinds will drive strategic sourcing: The food and agriculture supply chain must adapt to reconfigured global trade flows and geopolitical tensions, with new tariffs and regulations likely to increase food inflation and require strategic sourcing adjustments to enhance resilience and ensure global food security.
2. The rise of grocery giants’ private label: Private label (PL) products will continue to gain market share in the US this year, driven by economic pressures, waning brand loyalty, and improved product quality. That will lead to increased investment and innovation from both retailers and suppliers.
3. In search of margins (cost cutting): US food companies will continue to struggle with profit growth due to high food inflation and upstream cost pressures. Retailers' cost-cutting measures and resistance to price increases will also impact suppliers, leading to potential M&A activity, consolidation, and reduced investment in R&D and innovation.
4. Health - Anti-obesity medications and new regulations: The rapid growth of anti-obesity medications (AOM) and the movement led by health secretary nominee Robert F. Kennedy Jr. to "Make America Healthy Again" could drive significant changes in the packaged food industry if he is given authority. In this event companies will be pushed to innovate with nutrient-dense, smaller portion products while responding to new dietary guidelines and consumer health trends.
5. Innovation on a budget: New product launches will remain subdued due to economic pressures and regulatory challenges, but incremental innovations in smaller formats, global flavors, and private label products will drive growth. We expect that significant investments in functional ingredients and industry consolidation will continue.