Something is shifting in the aisles and boardrooms of the consumer packaged goods (CPG) industry. The old model — built on brand equity, predictable loyalty and steady margins — is beginning to fray. Growth has slowed to just single digits year-over-year, with many categories flat or declining. Against a backdrop of rising tariffs and price increases, from household essentials to everyday snacks, CPG is one of the most vulnerable sectors.
PwC’s inaugural CPG Executive Survey, based on responses from more than 200 global senior executives, reveals an industry reckoning with growth challenges rooted in external forces as well as internal inertia. The pressure to change isn’t coming from only consumers who are becoming more price-sensitive across all income tiers. It’s also rising from within — driven by outdated operating models, fragmented AI adoption and stakeholder misalignment. In today's environment, caution is a risk. Competitive advantage will go to those bold enough to act decisively — and fast.
Five shifts changing the CPG playbook
Need business transformation? Align strategy and structure
Nearly half of CPG executives (49%) say their current business structure won’t hold up for another decade — a number seven points higher than the cross-industry average of 42% in our Global CEO Survey. Flat growth, low margins and economic volatility are raising the stakes.
But awareness isn’t translating into action. Of those who believe their business model won’t be viable in 10 years, 29% aren’t planning to restructure a single function. Only a third expect to redesign four or more. In other words, leaders know change is needed but many haven’t committed to the urgency required.
One root issue? Misalignment between how businesses operate and how they report. Sixty percent of CPG leaders say their financial reporting doesn’t align with how the business is structured — obscuring visibility, stalling innovation and delaying decisions. In a sector with billions in untapped value, that disconnect has consequences. AI-native disrupters are moving with zero legacy drag. In this landscape, evolution won’t cut it. It takes a radical reset.
The pressure to change isn’t only coming from well-understood consumer shifts. It’s also rising from within — driven by outdated operating models, fragmented AI adoption and stakeholder misalignment.
Embrace AI as a growth engine
Nearly 60% of CPG executives say they’re prioritizing AI to improve costs — but largely just for tasks like forecasting and back-office process automation. Traditional levers like portfolio optimization and dealmaking follow closely behind. That proximity says a lot. Most established companies still view AI as another efficiency tool. They're centralizing AI, analytics and personalization to help drive competitive advantage with speed. They’re also using it to build smarter product pipelines, reshape consumer engagement and unlock new revenue models.
And while 93% of survey respondents say they expect the industry to become more tech-driven and collaborative, only 59% believe AI agents will play a significant role in owning the end consumer relationship within five years. That’s a critical gap, one that points to a misunderstanding or even denial about the speed of change. The rise of agentic AI is real, and many incumbents may be underestimating how quickly product design and marketing are being upended by AI-native challengers. To compete, CPG leaders should treat AI as a core component of their growth strategy.
Innovate with fewer, bolder bets
Most CPG companies face a difficult landscape, with nearly half of all executives surveyed citing external forces — consumer preferences, competitive pressure and economic uncertainty — as top barriers to growth. But companies projecting 5% or more revenue growth over the next five years are taking a more focused approach to innovation.
With SKU counts still high and shelf space saturated, many CPG companies are under pressure to simplify. The emphasis is shifting from launching more products to building smarter portfolios — with offerings that could expand into new categories if they align precisely with consumer needs. And that discipline will likely extend to deal strategy, too. In other industries, targeted acquisitions and alliances focused on differentiated capabilities have proven to be powerful complements to internal R&D.
Sustainability is here to stay
Talking about innovation, among companies forecasting higher-than-average growth, 34% plan to invest in sustainability, compared to just 20% of their slower-growing peers. Leaders are shifting from treating sustainability as a compliance exercise to using it as a core business strategy resulting in ROI and overall growth. And with rising consumer demand for transparency, more companies are building capabilities like performance management, smart packaging and behavior-based segmentation to drive both accountability and advantage.
Make DTC part of your future
Retail may remain the dominant channel for most CPG companies in the near term, but e-commerce is gaining ground and significance. Most executives clearly see DTC as essential to strategy. In fact, our survey respondents expect self-enabled DTC to grow as a share of revenue, seeing it rise from its current state of 10% to 15% by 2030, while retail and wholesale stagnate.
Why might this be the case? Because leaders know that owning the interaction means owning the insight. It enables CPGs to generate real-time data, shape experiences across the value chain. For marketers and tech leaders, it unlocks faster learning. For CFOs, it safeguards margins and boosts lifetime value.
And as DTC scales, it could open the door to convergence. Leading companies could use DTC not just to sell products but to potentially build cross-category ecosystems, in ways that can engage the whole consumer, beyond just a product.
Convergence is coming
As consumers increasingly connect their food choices to their health, lifestyle and values, and more people consider using GLP-1s, the boundaries between traditional product categories will likely blur. For CPGs, that means there's a real opportunity to serve people more holistically.
Create agents of change
Despite the attention on AI and digital transformation, the No. 1 challenge to organizational change isn’t cost or technology. According to nearly half of our survey respondents, it's misaligned stakeholder interests, followed by a lack of clear vision. Legacy structures and cultural inertia remain deeply embedded, and large-scale efforts to self-disrupt falter when even one function or region isn't fully on board.
This finding reframes the blocker as a human issue — not a technological one. For CEOs, it’s a call to redesign operating models and to align incentives and drive unified action.
The bottom line
For CPG companies, the future won’t be won by speed or scale alone. It will be shaped by those who self-disrupt. Our survey reveals a sector ready to evolve, and leaders willing to confront what isn’t working. But evolution won’t come from investment alone. It will require the courage to challenge old assumptions, trust new systems and lead decisively. This is not a time to wait for clarity. It’s the time to create it.
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Our next report uncovers where consumer goods are headed—and how to get ahead.
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