State of Consumer Products Report: reclaiming relevance

Reclaiming Relevance: State of Consumer Products Report

Something’s not quite right with big consumer product companies.

For decades, the formula was simple: scale, familiarity, and control. But in 2025? That formula is cracking. Brands that once led global markets are slipping quietly into irrelevance.

Consumers are switching brands faster than ever. Retailers are rewriting the rules. And investors are wondering whether the “formula” is even safe anymore.

So, what happened?

In this article, we’ll explore the latest EY State of Consumer Products Report (May 2025), which uncovers how the industry’s leaders are rewriting the rules and how you can too.

Let’s get into it.

‍

So, What’s Happening to Big Brands?

Scale has always been the ultimate competitive edge in consumer products. Big companies owned shelf space, pricing power, and distribution. But today, those same firms are experiencing what EY calls the Negative Drift. This is a slow erosion of confidence, innovation, and consumer trust.

Here are a few things that might be causing this drift:

• Private labels are increasing, offering comparable quality at a better value
• Challenger brands are faster and more agile, often getting to market before big players can respond
• Retailers are seizing power, becoming brand creators and category architects themselves
• Investors are losing faith, as returns fall below treasury yields and S&P 500 benchmarks

This simply means that in a world where consumers buy less and expect more, just being “big” isn’t enough anymore.

‍

Why Playing It Safe Is What’s Killing Big Brands

When things become complex, it’s natural to fall back on what used to work, and that’s exactly what many consumer product leaders are doing.

They’re expanding their product lines, cutting costs, and clinging to control. The EY report calls this mindset the Defensive Scale.

But here’s the problem: these defensive moves (portfolio stretching, shrinkflation, and internal automation) only offer short-term protection. They rarely create new consumer value, and often accelerate decline by: 

• Diluting brand focus 
• Eroding consumer trust 
• Alienating retailers 
• Undermining investor confidence

These strategies aren’t a retreat, but a rebuild.

‍

The Better Path: Disruptive Optimism

While some brands are retreating, others are moving ahead with a mindset EY calls Disruptive Optimism, which is simply a belief backed by bold, focused action.

This shift isn’t just about hoping things improve; it’s about rebuilding relevance every single day.

The key moves involved in this process include:

• Simplifying portfolios to double down on what matters
• Accelerating innovation using AI, data, and faster test-and-learn cycles
• Investing in long-term brand equity, not just short-term margin tricks
• Collaborating with retailers, rather than trying to overpower them

These steps, including making smart bets on emerging markets and high-growth consumer segments, all contribute to rebuilding relevance.

‍

What Consumers Want

Consumers still care about brands, but only if they deliver real value.

Gone are the days when a familiar logo was enough to win loyalty. Today’s consumers are more selective, more informed, and way less forgiving. They want:

• Better quality (83% say this matters most)
• Sharper value (78% want more for their money)
• Real innovation (67% expect brands to offer something new, not just another flavor or pack size)

But the problem is that most brands aren’t delivering. Instead of innovating meaningfully, they’re:

• Shrinking pack sizes while keeping prices high (yes, people notice)
• Recycling the same tired products with “new” labels
• Overpromising and under-delivering

They forget that consumers are smart. They know when something’s been “improved” just to cut costs, and they’re quick to switch to a competitor brand that’s doing it better. So if your brand wants to stay in their carts, you have to earn your place with real value, fresh thinking, and a reason to believe.

‍

5 Strategic Shifts to Reclaim Relevance

Here are five smart shifts that forward-thinking brands are making to reclaim relevance and build momentum:

1. Streamline the Portfolio 

Many companies are still managing bloated portfolios built for scale, not relevance. The result is internal complexity, diluted brand equity, and inefficient resource allocation.

To regain focus, leading companies are:

• Divesting low-margin or stagnant brands
• Prioritizing high-growth, high-margin categories
• Concentrating investment in fewer, stronger offerings that can lead their categories

This approach is about clarity. A focused portfolio enables faster decision-making, stronger brand identity, and more effective marketing. 

2. Make Innovation 

Consumers expect innovation to bring value, not just a new flavor or package. Yet many brands still focus on minor tweaks that feel like cost-saving exercises rather than meaningful improvements.

To stay relevant, Consumer product leaders must:

• Align innovation with clear consumer needs: health, convenience, sustainability, and identity
• Use AI and advanced analytics to shorten development cycles and make better R&D decisions
• Build internal systems to test, iterate, and scale successful ideas faster

True innovation today is less about volume and more about velocity and relevance. Companies that deliver visible improvements, not just new Stock Keeping Units (SKUs), are earning consumer trust and retailer support.

3. Rebuild Consumer Trust 

Brand loyalty is weakening. Consumers are switching more often, especially when price increases outpace perceived improvements. 

To regain consumer confidence, brands need to:

• Communicate why their products are worth the price
• Deliver quality improvements that are easy to see and understand
• Stop relying on constant promotions to drive demand

Consumers are still willing to pay for quality, but only if the benefits are clear and consistent. A strong, differentiated value proposition is critical to standing out and commanding loyalty.

4. Stop Fighting Retailers 

Retailers now have more influence than ever. They’re building their brands, controlling shelf space, and investing heavily in data and media networks. 

Successful brands are:

• Engaging in joint business planning and category growth strategies
• Co-developing products, promotions, and digital campaigns
• Leveraging retail media platforms to reach shoppers more effectively

Brands that show up with insights, execution capabilities, and shared goals are more likely to retain shelf space and deepen relationships.

5. Show Investors a Real Plan (Not Just Hype)

Investors no longer view consumer product companies as inherently stable. Margin erosion, slow growth, and inconsistent execution have challenged the sector’s historical appeal.

To restore confidence, CP companies must:

• Deliver consistent, earnings-led growth, not just M&A-driven gains
• Allocate capital toward initiatives with long-term impact
• Provide transparency around how innovation, portfolio decisions, and operational shifts will deliver ROI

Right now, the brands that strike the right balance between innovation and financial control are the ones seeing higher total shareholder returns, even in turbulent conditions.

‍

Final Thought: Relevance Is Earned 

Consumer expectations are rising, retailers are setting the terms, and investors are paying close attention to how companies adapt.

The brands that embrace these five changes are proving that size doesn’t guarantee survival, but focus, innovation, and clear value creation can still drive long-term relevance and growth.