Contrary to some headlines, CPG isn’t dead. But the rules of growth are changing.
Consumers are feeling the pressure of inflation and becoming more selective about where they spend. At the same time, categories including wellness, protein, and functional foods continue to benefit from shifting consumer priorities.
The result? Capital is still flowing into CPG, but investors are becoming more selective about where they place it.
CPG deal value more than doubled year-over-year in Q1 2026, even as deal volume declined. Bigger checks are going to fewer companies.
So, what does that mean for founders?
Consumers Are Redefining Value
Inflation and pressure on household budgets are forcing consumers to make more deliberate tradeoffs. They aren’t necessarily walking away from CPG; they’re becoming more intentional about what earns a place in their basket.
That puts pressure on brands to deliver more than a compelling story.
How GLP-1s Are Changing Consumption
The rise of GLP-1 medications is also changing the conversation around food and wellness. Demand is shifting toward products that are protein-rich, nutrient-dense, and portion-conscious.
For brands, this creates opportunity but also raises the bar. Consumers increasingly want to understand not just what a product promises, but why it is worth buying.
Why “Healthy” Is Evolving
Clean labels, recognizable ingredients and minimal processing are increasingly important to consumers, retailers and regulators.
But “better for you” alone isn’t a strategy.
The Palmer Perspective
For CPG brands, the next phase of growth isn’t about selling more. It’s about building a business that earns the right to grow.
That means having a clear consumer benefit, a compelling value proposition, and a reason for customers to come back.
It also means focusing on the fundamentals: pricing, SKU productivity, margins and inventory.
Growth for growth’s sake is no longer the goal. Profitable, durable growth is.
A great consumer story still has to translate into great business economics. The brands best positioned to attract capital will be those that can link consumer demand to healthy margins and predictable cash flow.
The opportunity in CPG remains significant. But the companies that win won’t necessarily be the ones growing the fastest.
They’ll be the ones that understand why they’re growing and can prove that growth creates value.
Jennifer Palmer, JPC
