The next era of M&A-driven industry reconfiguration
Consumer spending appears to be holding up, even amid persistent economic uncertainty and fluctuating sentiment. But the way people spend, and what they’re willing to spend on, is shifting fast. Brand loyalty is eroding. Digital influence is rising. Agentic commerce is no longer experimental. So, for companies in consumer packaged goods (CPG) and retail, deals are no longer just about scale—they're about survival, speed, and reinvention.
Rather than pulling back entirely, consumers are making more value-driven, intentional choices. This behavioral change and demand shifts across categories are, at least in part, a result of social trends and digital ecosystems. Add inflation, evolving tariff policy, and the higher cost of capital, and dealmakers are navigating a complex, less predictable landscape. While premium and wellness categories show signs of growth, discretionary and mid-tier segments face sustained margin pressure.
That makes the year ahead a critical moment for business leaders to reevaluate their portfolios, doubling down on category strengths, accelerating innovation, and potentially exiting lines where competitive edge has faded. This isn’t a wait-and-see market. In 2026, the winners won’t be those who buy the most, but those who buy what’s next. The boldest dealmakers will use M&A not just to expand, but to disrupt their own business models and to acquire capabilities that help fill gaps—pivoting faster, shaping demand, and staying relevant in a consumer landscape that won’t stop moving.
For both corporate acquirers and private equity (PE) players, precision is this year’s playbook.
What defined dealmaking in late 2025
Big bets over broad reach: Deal volume is down slightly, but values are rising, as buyers pursue fewer, bolder bets in brand-rich or operationally innovative targets. An early wave of megadeals—such as Ferrero/Kellogg, KDP/JDEP, Kraft/Heinz, and Kimberly Clark/Kenvue—reflected a structural response to fragmented consumer behaviors, margin pressure, and the need for bolder portfolio focus.
Portfolio precision: Corporate owners are divesting underperformers and concentrating capital on assets with emerging, resilient demand and margin potential.
Category carve-outs: Global companies like Unilever, Keurig Dr Pepper, and Estee Lauder are spinning off business units and reassessing their brands to better focus on growth areas.
PE recalibration: Sponsors remain active, but the playbook has shifted. Growth-stage assets with clear value creation levers are winning out over scale-only targets, but select sponsors found scale opportunity early in the year with Walgreens and Skechers.
Cross-border interest: International buyers, especially from Asia, continue to seek US brands for their pricing power, premium equity, and proven platforms.
Capability convergence: Investors are acquiring businesses that support product development—like manufacturers, ingredient suppliers, and packaging companies—to tap into fast-growing categories. Bolder companies should go further, considering innovation capability acquisitions as a moat for future industry shifts.
What’s next: Precision investing, cultural fluency
The CPG sector is in the middle of a reckoning. Legacy business models are cracking under pressure. As we explored in From shelves to systems: Why the future of consumer goods will be unrecognizable, this isn’t a cyclical disruption—it’s a seismic shift.
Agentic commerce has arrived, not as a test case but as a new shopping channel, reshaping how consumers discover, decide, and buy. Lower- and middle-income consumers are squeezed and shopping smarter. Younger generations are redefining what brand loyalty means. The core assumptions behind many CPG and retail playbooks that once drove predictable growth—brand equity, mass reach, and channel control—no longer hold.
Disruption is converging on multiple fronts—with headwinds from the Make America Healthy Again (MAHA) movement, wellness trends (especially the increase in use of GLP-1s), and macroeconomic pressure—all converging to force a reevaluation of legacy value propositions. Consumer authority is shifting from the shelf to the signal.
Cultural fluency is becoming a competitive differentiator. Buyers who can anticipate consumers’ emerging behaviors—and move at the speed of culture—will outperform.
In this environment, companies have to do deals to survive. Portfolio reshaping is no longer a strategy lever. It’s an operating imperative. For many incumbents, M&A is the fastest way to exit low-growth categories, acquire future-fit capabilities, and reclaim relevance.
Corporate buyers and private equity firms alike are hunting for assets that help them pivot, not just grow. That means acquiring smaller, challenger brands in categories in adjacent or converging industries like food as medicine, culturally fluent brands, and digital-native operators that can scale at social-to-shelf speed. Meanwhile, sellers are under pressure to clean up portfolios, spin off distractions, and reallocate capital where they can win.
For some public companies, however, this structural change is harder to achieve under the scrutiny of quarterly reporting. In contrast, private buyers, and carve-outs led by sponsor-backed management, can move more decisively to reshape cost structures, streamline operations, and reallocate capital without the near-term pressures of public markets. This dynamic is making spin-offs and take-privates more attractive paths to long-term reinvention.
Agentic commerce is also creating a new diligence mandate. Acquisition targets in this space aren’t traditional. They're platforms and experiences that monetize moments of intent, not shelf space. Financials still matter, but so does brand velocity, cultural relevance, and community alignment. Buyers that overlook these dynamics risk missing the real engines of growth.
Brands that own privileged insights, and can integrate them through AI-driven personalization, are commanding premium valuations. These AI-native players offer acquirers a double benefit: immediate consumer insight and long-term infrastructure for automation, targeting, and signal amplification.
Key developments to watch across categories and capital
CPG: Expect a wave of megadeals and spin-offs as CPG companies race to survive category erosion and recapture growth. Scale alone won’t be enough. Buyers will need to make bold, structural bets that deliver not just synergy, but speed. Winning companies will be those that can tell a compelling standalone story, execute cleanly, and reinvent underperforming assets through operational transformation and cultural relevance.
Retail: The K-shaped consumer economy is widening. High-income shoppers continue to spend, while lower- and middle-income segments are stretching budgets and redefining value. Agentic commerce is accelerating this divergence, creating both margin risk and new demand pockets. Retailers that align portfolios with both premium intent and value-driven missions will lead, especially those with flexible, loyalty-first models and the infrastructure to deliver at moment-of-intent speed.
Private equity: As IPO markets reopen, exits will pick up, but the biggest plays will happen in the middle. Mid-market sponsors are best positioned to scale smaller brands that move fast, know their audience, and operate natively in digital and cultural channels. Expect increased sponsor interest in carve-outs and take-privates where they can accelerate reinvention without public market pressure—and create infrastructure for long-term value creation.
“We’re in the early innings of an M&A-driven industry reconfiguration that happens every ten years or so. Expect more big moves as companies respond to complex multi-generational consumer demands.”
Mike Ross,US Consumer Deals LeaderThe bottom line
This isn’t a wait-and-see market. In 2026, deals that reshape, not just resize, portfolios will separate the CPG leaders from the legacy players. The bold won’t just chase scale. They’ll buy speed, signals, and tech-enabled advantage.