Food and beverage companies reckon with sinking sales

Billy Roberts

March 3, 2026

Key Points

• Consumers are resisting higher prices, as reflected in flat to dipping volume sales and muted growth expectations across major food and beverage companies.
• Even higher-income households are responding, liming their restaurant visits and leaning into private label products at the grocery store.
• Food and beverage companies are pivoting from expansion to defending share, boosting efficiency and innovating products for health-oriented and clean-label claims.

The world’s largest food and beverage companies are apprehensive about the year ahead, as the latest data shows consumers have been pulling back on their purchases:

• Coca-Cola experienced flat unit-case volume growth for both the fourth quarter of 2025 and FY25.
• General Mills expects slower FY26 volume recovery than anticipated.
• Molson Coors’ volumes fell 7.7% in FY25.
• Mondelez FY25 volume growth was -2.9%
• Utz Foods noted flat volumes in the fourth quarter of 2025 but should grow strongly in the next year on the heels of geographic expansion.

At the recent 2026 meeting of the Consumer Analysts Group of New York (CAGNY), discussion gravitated toward consumers’ behavioral changes and the impact on volume sales. Attendees included a dozen of the world’s largest food and beverage companies, two of the nation’s biggest foodservice distributors and four (though likely soon to be three) ingredient suppliers.

Volume sales are struggling for a variety of reasons, from limited growth in the snacking category to notable declines in alcoholic beverage segments to continued challenges for the carbonated soft drink category. Yet the principal factor remains the same: higher prices.

As such, even more concerning for many CAGNY presenters is the notably lean net sales growth expectations in FY26:

• Conagra (projecting -1% to +1%)
• General Mills (-1.5% to 2%)
• Kraft Heinz (-3.5% to -1.5%)
• Molson Coors (-1% to +1%)
• Mondelez (flat to +2%)

Cost-conscious consumers are impacting brand strategies

The industry continues to face a consumer base that will generally avoid increased pricing, either by shifting brands or seeking deals, according to Purdue University’s Center for Food Demand Analysis and Sustainability. Higher-income consumers, fairly confident in their financial status, should be propelling at least stability in restaurant traffic and grocery brands. However, that has not proven to be the case. Even consumers that should theoretically be able to afford it are limiting their dining out. Higher-income consumers are not trading down entirely, opting instead to visit favorite restaurants less often.

In the supermarket, their behavior is very similar to that of lower-income households: Higher-income consumers are increasingly turning to options seen as affordable, explaining much of the record sales levels in private label food and beverage (across all of consumer-packaged goods companies, for that matter). They may not necessarily opt for the absolute value end of the private label spectrum, but they are turning to the mid-range and premium store brands.

However, lower-income households, particularly in the sub-$50,000 per year range, are absolutely trading down into the value end of private label. They are also cutting down on restaurant usage considerably, as higher prices have increasingly put even a lot of fast-food out of consideration. Traffic at McDonald’s, Burger King, et al. is growing only due to their value menus, and same-store sales growth could be bleak over the next couple of quarters. Those chains already are supporting their franchisees to offset some of the value menu costs, but that cannot last forever.

The challenge for CPG food and beverage brands will be considerable, and judging by presentations and overall attitudes at CAGNY, they recognize the need to resonate with the consumer to warrant the extra spend on a brand. Yet the general sentiment was that the consumer base overall is not financially ready to entertain spending more even if the product benefits may warrant it.

The road ahead for food and beverage brands

This is going to be a very challenging year for a host of food and beverage brands. The economy is a huge part of the story, but brands also face the growing impact of GLP-1 usage. (Even presuming GLP-1 usage maxes out at 15% of consumers and people cycle off of the drugs, consumer spending will still dip as a direct result of GLP-1s and their impact on consumption patterns.) Another key factor is lower U.S. immigration growth, which several companies noted negatively impacted their forecasts as it means smaller growth in the overall consumer base.

That consumer base, however, continues to prioritize protein when eating healthier and to augment their diets amid usage of GLP-1 drugs. Hormel, General Mills, PepsiCo, Coca-Cola and Utz all featured protein claims prominently in new product innovation. Discussing its protein fortification capabilities, ingredient supplier Ingredion valued protein as a $28 billion claim in 2025 food and beverage launches (with fiber claims estimated at $10 billion). What may prove a bigger claim category than either protein or fiber, though? Clean-label food and beverages accounted for $145 billion in FY25 sales, according to Ingredion estimates.

Capital expenditure discussion focused on share buybacks and continued efforts to maintain free cash flow, while facility investment or merger and acquisition interest appears tame. The biggest news was the announcement that International Flavors & Fragrances Inc. (IFF) plans to divest its food ingredient business, part of company plans to "exit lower-margin commodities" and focus on core, high-growth areas. In the meantime, J.M. Smucker is reducing its Hostess product stock-keeping units (SKUs) by 25% and eliminating promotion activity from January until the end of the fiscal year for its sweet baked snack segment, all in an effort to evaluate return on investment. Kraft Heinz is trying to drive volume growth with a $600 million investment across product packaging and price, trying to replicate success the company has found in select markets. (In all likelihood, the move is intended to improve company results and position it better to un-pause the planned split). That focus on volume growth was a common refrain; actual investment plans were fairly limited, with the exception of artificial intelligence.

Agentic AI is clearly an area where companies are devoting considerable investment. PepsiCo, Kraft Heinz, Unilever, and even non-food/beverage companies like Clorox, Reckitt Benckiser and P&G indicated they are investing in agentic AI either to support their supply chain or more consumer-focused ambitions. Specific details were slim, but the concept of agentic AI certainly is top of mind and is undoubtedly going to require some companies to invest further on the hardware and software side, not to mention in determining how to maximize the ROI.