The end of price-led growth

As of February 2026, the era defined by aggressive, inflation-linked price increases, which sustained top-line growth from 2022 through 2024, seem to have ended. Manufacturers and retailers across Europe and the United States have confronted a fundamental "pricing ceiling," a point at which further increases result in abrupt volume loss and the erosion of brand equity. In this post-inflationary landscape, consumer behavior is no longer characterized by a temporary reaction to high prices but by a permanent shift toward intentionality, where every purchase must "earn its place" in the basket. Consequently, consumer goods suppliers are pivoting toward a broader approach to Revenue Growth Management. This evolution prioritizes transactions, volumetric expansion, refined price pack architecture (PPA), a more realistic approach to promotional effectiveness, and the modernization of trade terms.

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The blog post continues after this infographic on 10 revenue management levers to shift from price-led to transaction-led growth.

The End of Pricing as a Sole Growth Engine

The transition into early 2026 marks a return to the "volume imperative." Throughout 2025, it became increasingly evident that the "pricing playbook" was exhausted. While value sales growth across the global FMCG landscape remained positive at approximately 3.5%, the underlying volume growth stagnated at a meagre 0.9%, signalling a disconnect between revenue figures and actual market penetration. Consumers in developed markets, having faced years of eroding disposable income, have reached a state of "inflation fatigue," leading to a widespread numbing toward traditional value claims. The result is a highly polarized market where household budgets remain tight, and the risk of consumers "trading out" of categories altogether is as prevalent as the trend of trading down to private labels.

Real Internal Growth (RIG)Leading firms now recognize that the primary driver of shareholder value in 2026 is Real Internal Growth (RIG), a metric that isolates volume and mix from the distorting effects of pricing and exchange rates. For instance, Nestlé has explicitly prioritized "RIG-led growth," investing in "high-return opportunities" such as cold coffee and pet care to reverse the volume declines seen during the height of the inflationary cycle. This shift requires a departure from blunt, broad-based price moves toward selective, elasticity-informed strategies that account for the widening value bifurcation between affluent consumers and those in the low-to-middle-income brackets.

Economic Indicator	2024 Actual	2025 Estimated	2026 Forecast
Global FMCG Value Growth (%)	4.1	3.5	3.2
Global FMCG Volume Growth (%)	0.8	0.9	1.2
Consumer Price Sensitivity Index	High	Elevated	Extreme
Private Label Market Share (EU)	38%	39%	40%+

The table above illustrates the gradual stabilization of value growth and the critical necessity for volume recovery to sustain the industry's health. As price growth cools - from 4.1% in 2024 to an expected 2.0% in 2026 - the emphasis moves toward capturing "trips and baskets" through sharper assortments and consumer-first innovation.

Reimagining Price Pack Architecture: From Shrinkflation to Right-Sizing

Price Pack Architecture has emerged as arguably the most critical lever in the 2026 RGM toolkit. The industry has moved decisively away from "silent downsizing," a practice that became a PR liability and a regulatory target in 2024 and 2025. In its place is a more transparent and intentional strategy known as "right-sizing," where pack sizes are tailored to specific consumer shopping missions, from entry-level accessibility to bulk-value stock-up.

The Regulatory Landscape and the French Anti-Shrinkflation Mandate

One of the most significant drivers of this transparency is the implementation of stringent labeling laws in Europe. France, through the DGCCRF (Directorate-General for Competition, Consumer Affairs and Fraud Prevention), has led the charge by mandating that supermarkets with a sales area over 400 square meters must explicitly inform consumers when a product’s quantity has decreased while its price has remained the same or increased. This "shrinkflation" warning must be displayed in a visible and legible manner, often using the same font size as the price indication, under the threat of fines up to €15,000 for legal entities. This regulatory pressure has effectively forced manufacturers to abandon deceptive downsizing and instead embrace "strategic PPA" that provides clear value-per-use or value-per-portion communication to the consumer.

Channel-Specific Architectures and Portfolio Clarity

In 2026, the channel landscape has further polarized between hard discount and "traditional" supermarkets and e-commerce formats, requiring manufacturers to develop channel-specific price pack architectures. For instance, PepsiCo has implemented "sharper everyday value" pricing, which includes targeted affordable price tiers for mainstream brands in high-frequency channels, while simultaneously developing exclusive larger formats for supermarket channels to anchor value perception. This granularity ensures that a brand remains accessible at a 2euro entry point for the "daily snack" mission while offering a 10 euro "family pack" that provides a 20% lower cost-per-gram for the "pantry stock-up" mission.

Furthermore, the "Smart Value" architect mindset has led brands to utilize portfolio discipline as a way to defend their position against private label growth. In the Nordic markets and across the wider EU, private label share has reached nearly 40%. Brands that are winning in 2026 are those that have "clearly defined the role of every pack," using entry packs to protect shelf price access and premium, differentiated SKUs to drive incremental margin.

PPA Strategy	Target Mission	Consumer Benefit	Manufacturer Objective
Entry-Level / Trial Pack	Accessibility	Low absolute price point	Penetration / Trial
Standard / Core Pack	Everyday Use	Trusted quality/price balance	Volume / Share
Bulk / Club Format	Value-at-Scale	Lowest cost-per-unit	Loyalty / Stock-up
Premium / Speciality	Indulgence/Benefit	Superior performance/health	Margin Expansion

This structured approach to PPA allows companies to navigate "channel polarization" without cannibalizing their own core segments.

Promotional Effectiveness: More Precision and Elasticity-Driven

The reinvention begins with a deceptively simple question that few companies can answer rigorously: where did the incremental volume actually come from? This is the "source of business" problem - and solving it separates genuine revenue growth management from expensive guesswork. For every promoted unit sold, the analysis must decompose volume into its true sources: Did the buyer switch from a competitor brand (competitive conquest - genuinely incremental)? Did they switch from another SKU within the same portfolio (cannibalization - zero-sum or possibly negative in margin)? Did they switch stores or would they have bought at another store (Retail switching - zero-sum, negative in margin)? Did they simply accelerate a purchase they would have made anyway at full price (stockpiling - margin-destructive)? Or were they a lapsed or new buyer entering the category (category expansion - the holy grail)?

This Source of Business® logic - identifying not just how much incremental volume a promotion generates, but where that volume originated - represents the analytical leap that the industry must make. Traditional Trade Promotion Management (TPM) systems were built as accounting tools: they tracked spend, reconciled deductions, and reported gross sales lifts. The shift now underway is from managing promotions as a bookkeeping function to promotional optimization as an analytical discipline - moving from gross promotional effects to net effects, with rigorous accounting for the side effects that destroy value: cannibalization, stockpiling, and subsidization of purchases that would have happened without the promotion.

This granularity connects directly to the PPA revolution described in the previous section. Occasion-based packaging is emerging as the new promotional mechanic - a way to stimulate volume and recruit new buyers without subsidizing existing demand. Rather than discounting a 500g box by 20%, the 2026 approach introduces a smaller "grab & go" format at a higher per-unit margin that serves a distinct consumption occasion. The consumer perceives value (an affordable absolute price point), the manufacturer captures better margin per gram, and - critically - the purchase is genuinely incremental because it serves an occasion that the 500g box never captured. Coca-Cola's $1.29 mini can and PepsiCo's expanded small-count multipack range exemplify this logic: instead of promoting the existing architecture, they changed the architecture itself.

The organizational consequence is equally significant. Companies that have built Source of Business® capabilities report fundamentally different conversations with retailers. Instead of negotiating promotional calendars based on "last year plus 5%," they can demonstrate which promotions drive genuine category growth (expanding the pie) versus those that merely redistribute existing demand (shifting slices).

Kearney's 2025 practitioner survey confirms that trade terms and promotional optimization deliver the single greatest P&L impact of any RGM lever. The Promotion Optimization Institute's 2025 Report echoes this finding - but with the critical caveat that the optimization must account for cannibalization, stockpiling, and substitution effects, or it is merely TPM with a better interface.

Trade Terms and Joint Business Planning

In 2026, the relationship between FMCG manufacturers and retailers is undergoing a fundamental transformation. The years of "price negotiation standoffs" (exemplified by high-profile disputes like Kraft Heinz vs. Tesco) have given way to more collaborative, data-driven Joint Business Planning (JBP) models. Retailers, facing their own margin pressures, are now evaluating category growth rather than just individual unit economics.

Performance-Based Trade Terms and JBP 2.0

Modern trade terms are increasingly tied to "performance-based incentives." Manufacturers are moving away from simple volume rebates and toward agreements that reward shelf-readiness, on-shelf availability, and category-building activities. Leading organizations are using "data and digital tools for end-to-end execution," sharing consumer insights and category trends to co-develop product, pricing, and planogram strategies.

One notable innovation in 2026 negotiations is the use of "failure rebates" or conditional commitments. In these scenarios, a supplier may agree to compensate a retailer if a proposed price increase or new pack introduction fails to meet agreed-upon volume thresholds.¹⁹ This de-risks the retailer's decision and shifts the conversation from "cost inflation" to "mutual value creation," where the manufacturer provides a data-backed rationale for why a change will expand the total category value.

JBP Component	Traditional Model (2020)	Collaborative Model (2026)
Primary Goal	Wholesale volume / Net price	Category growth / Shopper value
Data Usage	Siloed, historical sales	Unified, real-time shopper insights
Promotions	Static calendar, high-low	Dynamic, AI-optimized precision
Relationship	Adversarial / Transactional	Partnership / Co-creation

This transition to "JBP 2.0" allows brands to serve as "category captains" who leverage their deep understanding of consumer missions to help retailers optimize their entire shelf, not just the brand's own SKUs.

Regional Nuances: Europe vs. The United States

While the move toward multi-lever RGM is global, regional differences remain pronounced. In the United States, household consumption has stabilized as softer inflation boosts real purchasing power, supporting a steady increase in FMCG demand through late 2026. However, in Europe, particularly in the Nordic regions, consumers are becoming more "intentional" and "wiser" with their wallets, prioritizing "Eco Logical" behavior - where sustainability must deliver tangible evidence and realistic pricing rather than abstract claims.

The "Smart Value" Engine in the Nordics

In Sweden, Finland, and Denmark, brands that have outperformed the market have behaved like "value architects" rather than discounters. They utilize their portfolio and price architecture to signal "smart value" while protecting brand equity through "willingness-to-pay" research. These brands have successfully "owned specific Category Entry Points" (e.g., "Kids’ Lunchbox," "Weekday Quick Dinner") to justify a price premium over private labels, which have grown to a 33% share of monthly food spend in the region.

The UK and "EDLP" Fatigue

In the UK, the continued rise of Everyday Low Price (EDLP) models at Aldi and Lidl has put immense pressure on traditional manufacturers' promotional budgets. This has led to "price war fatigue," prompting UK brands like Clipper Teas and Ella’s Kitchen to pivot toward "flavor innovation" and "sustainable packaging" as escape routes from margin-eroding price competition.

Beyond Pricing: 5 Cases in Volume-Led Growth

In this final chapter, we examine five leading FMCG organizations that have collectively pivoted away from inflationary pricing. By leveraging portfolio simplification, AI-driven efficiency, and volume-led growth, these industry leaders are reclaiming market share and protecting margins within an increasingly polarized retail landscape.

1. PepsiCo: The "Strategic Reset" and Portfolio Simplification

In response to engagement with activist investor Elliott Investment Management, PepsiCo unveiled a comprehensive strategic reset in late 2025 and early 2026, moving away from the aggressive price hikes of previous years.

• RGM Levers Used:

  • Price Pack Architecture (PPA) & Portfolio Management: PepsiCo initiated a massive rationalization of its U.S. portfolio, cutting approximately 20% of its SKUs to reduce operational complexity and focus on high-velocity core brands like Frito-Lay.

  • Sharper Everyday Value: The company implemented "sharper everyday value" pricing, specifically targeting affordable price tiers by brand and channel to stimulate purchase frequency among mainstream consumers.

  • Structural Cost Reduction: To fund price relief, PepsiCo closed three manufacturing plants and streamlined several production lines to improve productivity.

• Market Reaction: Investors reacted positively to the "price investment" and cost-cutting measures; as of early February 2026, PepsiCo shares have delivered a 13% total return since the initiative was announced.

• Impact: In Q4 2025, PepsiCo reported revenue of $29.3 billion, a 5.6% increase that beat analyst expectations. Core operating margins increased by 140 basis points to 13.9%, proving that simplification could protect profitability while lowering price barriers.

2. Nestlé: The "RIG-Led Growth" Mandate

Nestlé’s new CEO, Laurent Freixe, has prioritized Real Internal Growth (RIG)—a metric isolating volume and mix from pricing effects—as the company’s primary objective for 2026.

• RGM Levers Used:

  • Innovation Strategy: Nestlé focused on "six big bets," including Nescafé Espresso Concentrate and Maggi air fryer ranges, designed to capture new consumption occasions rather than just pricing existing ones.

  • Portfolio Pruning: The company reorganized its water and premium beverages into a standalone unit and accelerated the divestment of underperforming business cells (18 specific "cells" were targeted for improvement or exit).

  • Efficiency Reinvestment: The "Fuel for Growth" program was expanded to target CHF 3.0 billion in annual savings by 2027, with the savings funneled directly into marketing and advertising (reaching 8.6% of sales).

• Market Reaction: Analysts have noted the reversal of several quarters of stagnant volume, viewing the strategy as a necessary "turnaround story".

• Impact: Organic growth accelerated to 4.3% in Q3 2025, with RIG turning positive at 0.6%. In segments where Nestlé increased investment to accelerate category growth, sales grew four times faster than the group average.

3. Mondelez International: AI-Driven "AIDA" Platform

Mondelez has set an industry benchmark by investing over $40 million in its proprietary Generative AI platform, "AIDA," to revolutionize promotional effectiveness and marketing costs.

• RGM Levers Used:

  • Promotional & Content Precision: AIDA allows Mondelez to generate hyper-localized digital ads and animated social content (for brands like Milka and Chips Ahoy) that adapt visuals based on audience context in real-time.

  • Digital Shelf Optimization: The platform enhances product pages on Amazon and Walmart for brands like Oreo, optimizing descriptors and visuals to drive higher conversion rates at the point of sale.

• Market Reaction: The move is seen as a "performance driver" rather than just a cost-cutting tool, as it enables the company to react to cultural trends in hours rather than weeks.

• Impact: Mondelez estimates AIDA will reduce the cost of producing marketing content by 30% to 50%. These savings are being reallocated into media reach and product innovation to defend market share against private labels.

4. Unilever: Power Brand Focus and Portfolio Demerger

Under CEO Fernando Fernandez, Unilever has executed a "Growth Action Plan" that emphasizes its 30 "Power Brands," which now account for 78% of group turnover.

• RGM Levers Used:

  • Active Mix Management: Unilever is divesting non-core assets, most notably the demerger of its Ice Cream business (including Magnum and Ben & Jerry’s), to create a simpler organization with a structurally higher margin profile.

  • Trade Strategy (Unmissable Superiority): The company shifted from gross savings to "net productivity," reinvesting €800 million in brand superiority and "unmissable" retail execution.

  • Agile Marketing: The rollout of "Sketch Pro" AI studios across 21 markets by 2026 enables agile, social-first campaign deployment that drives higher digital channel performance.

• Market Reaction: Developed markets showed strong performance, particularly in North America, where volume-led organic growth reached 5.5%.

• Impact: Underlying sales growth reached 3.9%, with volume growth contributing 1.5%. Power Brands outperformed the group with 4.4% growth, significantly improving the company's competitive positioning in the US and Europe.

5. Coca-Cola: Digital RGM and Packaging Innovation

Coca-Cola has moved toward a "digital-first" model, increasing its digital media spend to approximately 65% and creating a new Chief Digital Officer role in January 2026.

• RGM Levers Used:

  • Price Pack Architecture (PPA): To manage consumer affordability, Coca-Cola expanded the use of 7.5-ounce mini-cans as single-serve options in convenience stores, which command a higher margin per ounce while remaining at an accessible absolute price point.

  • Integrated Execution: The company placed 14 million cold drink equipment units globally to capture high-margin impulse purchases outside traditional beverage aisles.

  • AI-Driven Flavor Preference: Using data from "Freestyle" machines and smart vending, Coca-Cola tracks real-time consumer flavor preferences to inform localized assortment and new product launches (e.g., Orange Cream).

• Market Reaction: While recent revenue slightly missed expectations due to unfavorable product mix, analysts remain positive on the "4-5% organic revenue growth" guidance for 2026, which remains above industry peers.

• Impact: Unit case volume grew 1% in Q4 2025, led by the U.S. and Japan. Comparable EPS rose 6% to $0.58, demonstrating that margin protection through PPA and digital execution can offset volume stagnation in specific regions.

And there you have it, five companies, five strategies, and one unmistakable conclusion: the age of just raising prices is over. The future belongs to those who can orchestrate pricing, packaging, promotions, and partnerships into a coherent, data-driven system.  

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