Consumer Power Is Shifting and Consumer Packaged Goods Companies Are Struggling

The much-whispered unraveling of Kraft Heinz underscores a broader sector-wide malaise: the steep, stubborn erosion of organic growth across consumer staples. Giants like PepsiCo, Unilever, Procter & Gamble, Colgate-Palmolive, and India’s Tata Consumer Products face similarly constraining headwinds.

Saturated demand is the culprit. Consumers are maxed out on toothpaste, detergent, packaged snacks, and syrupy fizz. As categories mature and volume plateaus, traditional growth levers feel obsolete. Intensified global competition tightens the vise—especially from nimble, cost-efficient regional brands that operate hyper-locally across developing markets.

Consumer behavior is bifurcating. Price-sensitive shoppers are gravitating toward store-label substitutes: affordable, dependable, brand-agnostic. Meanwhile, high-intent buyers seek premium offerings reflecting health priorities, sustainability values, or cultural identity. Together, these forces compress mid-tier incumbents from both ends.

To recapture relevance, legacy players are pivoting—acquiring smaller, health-forward, culturally attuned brands with traction. This isn’t experimentation. It’s survival. Growth now hinges on swift, intentional entry into wellness-led micro-markets.

PepsiCo’s acquisition of probiotic soda brand Poppi and Mexican-American snack label Siete Foods signals a clean-label, culturally conscious shift. Tata bolstered its portfolio with wholesome foods brand Soulfull, fusion brand Ching’s Secret, and Ayurvedic company Organic India. Unilever doubled down with Pukka Herbs, sustainable staple Seventh Generation, and offbeat grooming line Dr. Squatch—plus a stake in Esqa, Indonesia’s first vegan, Halal-certified cosmetics brand. Colgate and P&G followed, acquiring mission-driven favorites like Native, Hello Products, and Billie.

These investments reflect more than market strategy. They mark an ideological realignment. Today’s buyers demand clarity, simplicity, and purpose. With processed goods under scrutiny and marketing spin losing its shine, ethos has emerged as premium currency.

The staples sector isn’t merely evolving—it’s self-disrupting. In place of legacy inertia, a nimble, value-led strategy is taking root. The possible Kraft Heinz breakup embodies that shift.