Brace for Impact: 3 Industry Trends That Demand Your Attention

In the second part of our ABP (Annual Business Planning) series, we spotlight three critical trends set to reshape the playing field for mid-to-large consumer goods suppliers in the year ahead. Let’s start with one of the most impactful shifts: retail consolidation and the rise of buying groups.

Trend 1 Retail Consolidation and forming of buying Groups

Grocery retail has always been a margin game. But in 2024, it’s getting brutal. According to McKinsey, the average EBITDA margin of European grocers has dropped to 6.2%, with EBIT now hovering at just 2.8%[1]. The reasons? A potent cocktail of[2]:

• Inflation retailers couldn’t pass on to consumers due to competition

• Volume stagnation, as grocery loses share to foodservice (Deliveroo, ...)

• Escalating investments in sustainability, digitalisation, and e-commerce

Smaller players are getting squeezed. And the result? A new wave of M&A that’s changing the retail map. Carrefour snapped up Louis Delhaize’s Cora and Match in France. Colruyt and Delhaize divided up the rest in Belgium. Casino offloaded stores to Intermarché, Auchan, and Carrefour. Consolidation is here, and it’s accelerating. For suppliers, this is more than a headline, it’s a resource allocation problem. Fewer players, more power. You can’t keep managing your customers the same way.

To claw back margin, retailers are forming cross-border buying alliances—joining forces with counterparts in other markets to gain leverage. Most major grocers in Belgium, the Netherlands, France, and Germany are now part of one (Eurelec, Everest, Vasco) or have built their own international purchasing teams (Eureca, Aldi, Lidl) (Exhibit 1). This shift has caught many suppliers off guard. While retailers are playing a coordinated, pan-European game, suppliers are still stuck in local silos, riddled with pricing inconsistencies that make them easy targets for cherry-picking. Worse: we anticipate retailers switching alliances every few years to ensure they’re squeezing every cent. This creates volatility and strategic risk for suppliers who haven’t yet adapted.

Now is the time to move. Here’s what top-performing suppliers are already doing:

• Audit pricing across markets and retailers: Define comparable products. Know your inconsistencies. Look at both price and profit pools.

• Build a pan-European pricing strategy: assign a strategic role to each customer to reduce risk and ensure total EU pricing targets are met. Define clear pricing corridors for innovations to protect value and maintain consistency.

• Rewire your governance: reporting lines, escalation paths, and decision rights must evolve.

• Scenario-plan for group-switching dynamics and explore how to defend price differences credibly.

And don’t overlook retail media. With profitability under pressure, it’s one of the fastest-growing income streams for retailers, already scaling double digits and expected to double by 2028[3] (Exhibit 1). If it’s not a core part of your planning yet, it will be. But the real challenge is this: how do you shift budget from traditional media without losing effectiveness? How do you make the most of retailer first-party data without drowning in dashboards?

Exhibit 1: Projected Retail Media Ad Spend by IAB Europe

Trend 2: Inflation Isn’t Done with You Yet

After years of record-breaking inflation, you’d hope for smoother sailing. But that’s not what 2026 is shaping up to be. Yes, overall inflation has cooled. But for some manufacturers, volatility is far from over. Commodity price spikes are now more selective and harder to predict—driven by climate disruption, geopolitical instability, and rising demand. Coffee and cocoa are grabbing headlines (Exhibit 2), but less obvious inputs like acrylics used in diaper production are under pressure too.

Exhibit 2: Average prices for Cocoa worldwide

Add to that the Trump-era tariff politics 2.0, and the pressure on manufacturers only intensifies. Tariffs, effectively taxes, could significantly impact COGS. But that’s only half the story, consumer confidence and consumption might decrease[4], and shoppers might trade down from their usual A-brands. For highly globalized companies like Coca-Cola, which exports US-produced syrup worldwide, the impact could be outsized[5]. Local players? They might just find themselves with an edge.

Now layer this on top of Trend 1 “retail consolidation and buying groups” and you’ve got a recipe for another brutal negotiation season.

When inflation is high, discussions often become purely transactional. Joint business plans are sidelined. Margin takes centre stage. Here’s what you can do differently:

• Get creative. Price hikes aren’t your only lever. Look into operational efficiencies—supply chain, logistics, admin. Remove mutual complexity.

• Reassess your mix. Revenue Growth Management (RGM) can help steer volume toward less affected parts of the portfolio.

• Play the long game. In a world of uncertainty, absorbing short-term cost spikes in exchange for stronger long-term partnerships could be a winning move. If you’re willing to co-own the risk, retailers may be more open to co-owning the upside. It could also be an opportunity to segment retailers and reduce gaps.

• Design flexibility into pricing. Mechanisms like conditional price increases (with transparent rollback clauses) can reduce conflict and keep negotiations collaborative.

One thing’s for sure: Trump isn’t done making noise—and neither is inflation. The question is whether your planning process is flexible enough to stay ahead of it.

Trend 3: Rise of Small Brands

Walk through your local supermarket and you’ll see it: shelves filled with brands you’ve never heard of. Smaller, agile, and often laser-focused on specific consumer needs, these brands are rapidly gaining traction and they’re not slowing down. Powered by younger generations (hello Millennials and Gen Z)[6] and trends like sustainability, personalization, and health-conscious living, these niche brands are punching well above their weight[7]. In fact, 70% of consumers say they’re willing to pay more for tailored, innovative offerings[8]. This is where small brands shine and where big CPGs often stumble. Retailers love them too. Why?

• They help differentiate assortments and improve margin mix.

• They reduce reliance on large multinational suppliers.

• They allow for more agility and local relevance.

But for large FMCG players, this trend is a growing headache. Shelf space is shrinking, and consumer loyalty is shifting. Big companies still try to play in this space, often through niche launches under existing power brands, like Dove Powered by Plants. Most struggle to gain traction. That’s why we’re seeing a strategic pivot: acquisition. The recent $2B buyout of Poppi by PepsiCo says it all.

Use this planning cycle to clarify your edge. If you're a large CPG player, map your strategic advantages: distribution power, data, executional muscle and make them work harder. But don’t just rely on scale, learn from startups how to obsess over the customer. If you're a startup or challenger brand, sharpen your point of difference, and build the partnerships and capabilities that will help you scale sustainably without losing what made you special in the first place. Because in a market where everyone’s fighting for relevance, those who win are the ones who know exactly what they bring to the table and how to make it count.

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Curious how this could apply to your business? Let’s talk about how to turn planning into a competitive edge. You can reach us through our website or by sending a mail to jonas.geleyn@falcon-consulting.be

Let’s make this year your most focused yet.

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SOURCES

[1] The State of Grocery Retail Europe 2025, EuroCommerce & McKinsey & Company, 2025

[2] The State of Grocery Retail Europe 2025, EuroCommerce & McKinsey & Company, 2025

[3] The Retail Media Revolution: 2024 State of Play and Outlook in Europe, IAB Europe, https://iabeurope.eu/the-retail-media-revolution-2024-state-of-play-and-outlook-in-europe/, 2024

[4] Tariffs: Europe’s worst economic nightmare just came true, ING, https://think.ing.com/articles/europes-worst-economic-nightmare-has-just-really-come-true/, 2th of April 2025

[5] How Tariffs Could Affect International Brands Like Coca-Cola: A Competitive Challenge for Global Soft Drinks, ISN Magazine, https://internationalsupermarketnews.com/archives/19206, 2025

[6] Finding Harmony on the Shelf, Nielsen,  https://nielseniq.com/global/en/insights/report/2025/finding-harmony-on-the-shelf/, 27th of March 2025

[7] Three drivers of small CPG brand growth, Kantar, https://kriq.kantarretailiq.com/en/p-iq/insights/blogs/three-drivers-of-small-cpg-brand-growth, 24th of March 2023

[8] The State of Grocery Retail Europe 2025, McKinsey & Company, 8th of April 2025