Talk to almost any commercial leader in consumer goods right now and you will notice the same quiet pattern in their reporting. Revenues are holding up. Margins are holding up, just about. But somewhere in the volume line, something has broken.
By late 2024, US and EU prices sat more than 20% above their 2020 levels. Volumes, however, are flat or declining across most developed-market categories. Revenue is being sustained almost entirely by what was already on the shelf, sold at a higher price, to slightly fewer households. That is not growth. It is managed decline dressed up in a quarterly report.
This is the volume reckoning. And it is forcing the kind of rethink that the industry has not had to do since the rise of the discounters in the early 2000s.
1. Why Volume Growth Has Vanished
The stagnation is not a temporary dip. It is the result of several structural forces hitting the same line item at once, and each one is doing real damage on its own.
Inflation fatigue and the K-curve
Consumers in developed markets have hit their limit on absorbing price increases, but they have not all hit it in the same way. We are seeing a clear K-curve in demand. Premium brands continue to grow among wealthier households who feel insulated from the price environment, while the mass market trades down hard into private labels, discounters, and value formats. The middle of the market is being hollowed out from both ends, which is exactly the segment most legacy CPG portfolios were built to dominate.
Pricing-led crowding out
During the high-inflation years, pricing was the easy lever. Pull it, revenue holds, the quarter looks fine. The problem is that the success of that lever quietly reduced the urgency to invest in genuine innovation. Boards that were comfortably making the numbers had less appetite to fund expensive, risky breakthrough work. Three or four years of that compounds into an innovation pipeline that is mostly empty.
The innovation illusion
Roughly 65% of new product launches in the sector are now line extensions or packaging refreshes rather than genuine innovations. A new flavour of an existing range is not a growth driver, it is a maintenance activity. In most cases these launches cannibalise the existing portfolio rather than create incremental demand, which makes the volume problem look worse, not better, on the data.
Structural shifts: GLP-1 and the health agenda
This is the one most boards have not fully priced in yet. Rising use of GLP-1 medications is fundamentally altering consumption in high-volume categories. Users report cutting processed food intake by up to 70% and spending around 31% less on groceries overall. That hits snacks, soft drinks, and confectionery directly, but the spillover effect on adjacent categories is significant. If even a meaningful single-digit percentage of your shopper base is on these medications, your category volume forecast for 2027 needs revising.
Volume is not a victim of one shock. It is the casualty of four structural forces moving in the same direction at the same time, and that is why the standard playbook can no longer rescue it.
2. Why the Old Playbook Cannot Fix This
The instinctive response in most boardrooms is more of the same, but harder. Push another round of price increases through. Push harder on cost. Push harder on premium mix.
None of those moves restart volume. Premiumisation deepens the K-curve problem rather than solving it. Cost reduction protects margin in the short term but starves the brand and innovation investment that volume recovery actually requires. And further price increases simply accelerate the trade-down that is already eroding share to private label.
The pivot that the leading players are now making, and that the followers will need to make within the next twelve to eighteen months, is from defending margin with price to driving volume through three coordinated moves: portfolio rationalisation, genuine innovation, and disciplined geographic and channel expansion.
3. The Pivot: Three Moves That Actually Restart Volume
Radical portfolio and SKU rationalisation
Most CPG portfolios are quietly bloated. In the typical FMCG business, around 25% of SKUs account for less than 5% of sales. That long tail is a drag on volume in ways that are not obvious until you cut it. It absorbs working capital, it dilutes shelf negotiating leverage, it complicates forecasting, and it pulls marketing investment away from the products that genuinely have the right to win. Reducing SKU complexity has been shown to lift sales growth by two to five percentage points, simply by concentrating resources on power brands. The hard part is not the analysis. It is having the discipline to delist a SKU when a key account has asked for it to stay.
Genuine innovation, not packaging refreshes
Real innovation in 2026 looks different from real innovation a decade ago. The brands creating new demand are moving past the old "better for you" framing into products with measurable physiological benefits, high protein, added fibre, formulations that work alongside the GLP-1 trend rather than against it. Sustainability is moving in a similar direction, away from compliance-led claims and into formats like genuinely biodegradable or refillable packaging that change how consumers behave with the product. These are the launches that drive incremental volume. Line extensions are not.
Geographic and channel expansion
While developed markets are flat, emerging markets such as India and Southeast Asia delivered roughly 3% volume growth in 2024 and have continued through 2025 and into 2026. Many of the global players are still under-indexed in discounters and club formats, the channels where their trade-down shoppers are now actually buying. These are not new insights, but the gap between knowing and acting is unusually large in this part of the industry. The companies that close it first will pick up share that does not come back.
4. RGM as the Decision Engine
Underneath the three moves above sits the capability that makes them work in coordination rather than in isolation: Revenue Growth Management. RGM in 2026 is not a pricing department. It is the central decision engine for volume recovery, unifying pricing, promotions, assortment, and trade investment into a single data-driven view of where growth is actually coming from.
The version of RGM that matters now is heavily AI-enabled. Machine learning models can do things in coordination that no human team can do at scale, and the reported impact on the bottom line is meaningful enough that this has stopped being a future-state conversation and become a current-quarter one.
Where AI is doing the most useful work
Three applications stand out in our work with clients. Trade Promotion Optimisation is the most mature: AI models can now distinguish between promotional mechanics that drive genuine incremental volume and those that simply subsidise demand that would have happened anyway. The same model can compare a Buy-One-Get-One mechanic against a 20% discount on the same SKU, in the same retailer, at the same season, and tell you which one made you money. Most companies still cannot answer that question with confidence.
Dynamic Price-Pack Architecture is where the most counter-intuitive wins are sitting. AI is increasingly able to identify the precise price thresholds at which a shopper switches brands. One global beverage brand, when its ingredient costs rose, used this analysis to downsize a bottle from 500ml to 420ml in order to hold the critical $1.99 shelf price point. Volumes were protected, the price-sensitivity threshold was respected, and the margin pressure was absorbed inside the pack rather than on the shelf-edge label. That is the kind of move that traditional planning cycles cannot produce.
Cannibalisation detection is the third area, and it tends to surprise commercial leaders the first time they see the output. AI agents continuously scan the promotional calendar across the portfolio to flag where one brand's discount is silently stealing volume from another of your own brands. Rescheduling those events to protect total portfolio growth, rather than individual brand KPIs, regularly recovers volume that was being lost without anyone realising.
The numbers
The reported impact of AI-driven RGM, drawn from published industry benchmarks across 2024 to 2026, is consistent enough across deployments that it is worth taking seriously as a planning baseline:
- Promotional ROI: +15% to +43% increase
- Gross Margin: +2% to +5% uplift
- Forecast Accuracy: 20% to 30% improvement
- Decision Speed: up to 80% reduction in analysis time
- Stockouts: around 40% reduction
- Inventory Levels: around 35% reduction
None of these numbers should be treated as guaranteed. They are ranges, drawn from companies that did the implementation work properly, with clean data and senior commercial sponsorship. The point is that even at the lower end, the economics make a serious case for moving.
5. The 60-Day Sprint: A Practical Way In
One of the more useful things to have emerged from the recent wave of RGM transformations is a phased deployment approach that proves value in roughly sixty days, without requiring a multi-million pound transformation programme upfront. The shape of it is broadly:
- Days 1 to 30 — Data harmonisation: sync ERP, CRM, and retailer point-of-sale data into a single source of truth. This is the part most companies want to skip and cannot afford to. The quality of every subsequent decision depends on it.
- Days 31 to 60 — Smart-promo pilot: run a controlled pilot of AI-driven promotion design in one high-volume category, measuring lift and ROI against historical benchmarks. The point is not to transform the business in two months. It is to prove the value, build internal believers, and earn the right to scale.
The companies that have done this well treat the sixty days as a learning exercise, not a vendor selection. The deliverable is not a tool. It is a set of decisions about how the commercial organisation actually wants to run.
6. What This Means for UK&I Manufacturers
For the UK&I mid-market manufacturers we work with, in the £50m to £1bn revenue band, the volume reckoning lands a little differently than it does for the global giants, but the implications are no less serious.
UK&I shoppers have run further down the trade-down path than most other developed markets. Private label penetration in UK grocery is among the highest in the world, the discounters have continued to take share through 2024 and 2025, and the cost-of-living pressure has not eased in the way some forecasts predicted. For a mid-market manufacturer, this means the volume problem is often more acute than it is for a global incumbent with emerging-market growth available to flatter the group numbers. There is nowhere to hide.
The diagnostic questions that matter are blunt:
- Where is our volume actually coming from this year, by SKU and by retailer, and how much of it is genuinely incremental versus pulled forward by promotion?
- How much of our long-tail SKU portfolio is absorbing working capital and shelf negotiation leverage without earning its place?
- If a meaningful slice of our shopper base is on GLP-1 medications by 2028, what does our category volume look like, and have we modelled it?
- Are we genuinely measuring promotional ROI on incremental lift, or are we still measuring it on volume sold during the period?
In our experience, mid-market UK&I businesses that act on these questions early, before the volume erosion becomes visible in the headline numbers, recover ground much faster than those that wait for the trend to force their hand. The companies pulling ahead are not necessarily the ones with the most sophisticated AI tools. They are the ones with the discipline to ask the uncomfortable questions and act on the answers.
Let's Talk
The volume reckoning is not going to resolve itself. Boards that continue to manage on price and cost alone will keep producing revenue lines that look reassuring on the page and balance sheets that quietly weaken underneath. Boards that pivot now, into portfolio discipline, real innovation, and AI-driven RGM, will be the ones with growth stories to tell in 2027 and 2028.
At Chase Retail & Consumer Goods we work with UK&I consumer goods leadership teams to translate exactly this kind of structural pivot into specific, sequenced commercial actions: from RGM diagnostics, to SKU rationalisation, to trade promotion optimisation, to AI-enabled forecasting and integrated planning. Every business has its own pressure points, its own legacy constraints, and its own unfair advantages to build on.
I am open to discussing further with you your specific and unique requirements. If you would like a confidential, no-obligation conversation about where the volume is genuinely sitting in your business, and what a sixty-day sprint could realistically deliver, please reach out directly via LinkedIn or at Chase Retail & Consumer Goods.