Retailers and CPG brands may face challenges as President Donald Trump’s so-called “big, beautiful bill” takes effect, ushering in sweeping changes to the Supplemental Nutrition Assistance Program (SNAP).
The news: Kraft Heinz is planning to break itself up, The Wall Street Journal reported, a move that would allow it to focus on faster-growing segments without the burden of underperforming brands like Oscar Mayer and Maxwell House. Our take: Kraft Heinz’s unwinding is a warning sign to the growing number of food companies that see large-scale acquisitions as their ticket to success. While such deals can unlock efficiencies, they also risk creating bloated organizations that fail to keep up with the needs of consumers.
The news: Save A Lot introduced a new Hispanic-focused store format—its second—in partnership with Leevers Supermarket as it explores ways to build deeper connections with Hispanic consumers. The takeaway: The rationale for opening these stores is clear: Hispanic consumers wield increasing buying power and account for an outsize share of growth in categories like CPG, beauty, and food and beverage. By targeting these shoppers with formats and products best suited to their needs, grocers can win lasting loyalty.
The news: The wave of consolidation in the consumer packaged goods (CPG) sector is continuing with Italian candymaker Ferrero’s $3.1 billion acquisition of cereal manufacturer WK Kellogg. The deal will give the maker of Nutella and Ferrero Rocher a foothold in staple grocery categories, as well as deepen its North America presence—a particular area of focus for the company. Our take: With grocery spending strained and costs rising, most CPG companies are taking one of two tracks. Some, like Ferrero and PepsiCo, are making strategic acquisitions to broaden their portfolios and keep up with shifting trends. Others, like Conagra and General Mills, are shedding assets to reduce expenses and focus on the categories with the greatest growth potential.
The news: Ulta Beauty acquired upscale UK beauty retailer Space NK for an undisclosed amount, the company said, as it turns to new markets to offset slowing US growth. Our take: The US beauty market is becoming increasingly saturated as more retailers lean on the category to boost sluggish sales. While expanding to new markets comes with its own set of challenges, Ulta’s decision to rely on acquisitions and distribution partnerships will help smooth its path.
As Walmart celebrates its 63rd birthday this year, the retail giant continues to differentiate itself through data capabilities, technological innovation, and a willingness to experiment with new strategies.
The strategy: Starbucks is testing better-for-you products in a bid to win over more health-conscious consumers, per Bloomberg. Our take: Starbucks is making some necessary changes—but there’s still plenty of work to do. Consumers want brands that meet them where they are, and that means prioritizing ingredient transparency and wellness without sacrificing flavor or convenience. For Starbucks, that could mean cutting back on sugar in key drinks, expanding nutritional add-ins, and offering more customizable options. If executed well, this strategy could help Starbucks reassert its leadership in the premium coffee space.
The data point: Constellation Brands expects to take a $20 million hit this fiscal year due to the Trump administration’s aluminum tariffs, CFO Garth Hankinson said on the company’s earnings call. Our take: Constellation Brands is one of the few companies openly acknowledging the real-time impact of the administration’s policies. With both hardline deportation rhetoric and tariffs hitting at once, the company faces a dual challenge that could weigh heavily on its performance throughout the year.
The trend: Food manufacturers are pledging to remove artificial dyes from their products amid pressure from US Health Secretary Robert F. Kennedy Jr. and the Make America Healthy Again (MAHA) movement. Kraft Heinz said it would phase out artificial coloring in products sold in the US by 2027. General Mills quickly followed, announcing that it would eliminate artificial dyes across its full US portfolio by 2027, and remove them from all cereals and foods served in K-12 schools by next summer. Both Nestlé and Conagra are joining the party. Nestlé pledged to “fully eliminate [food, drug, and cosmetic dye] colors in its US food and beverage portfolio by mid-2026,” and Conagra will stop using such dyes in its frozen foods by year-end, and in all products by the end of 2027. Our take: For most companies, removing artificial dyes from their product lineups is a fairly easy lift, as many have already done so in Europe. It’s also increasingly a necessary move to prevent private labels from encroaching further on their turf, as more retailers launch “free from” lines and pledge to remove ingredients like aspartame and high-fructose corn syrup from their store brands.
The news: A majority of GLP-1 weight loss drug consumers are now staying on the medications for more than a year, per an annual Prime Therapeutics analysis. The Prime study includes 5,780 people via healthcare claims over three years; the mean age was 47 and 80% were women. The final word: Adherence rates longer than a year validates the idea that prescription weight loss GLP-1s, and newer drugs on the way, are here to stay as chronic disease treatments. It shifts typical weight loss marketing from cyclical—keep your New Year’s resolution or lose weight for your wedding—to medical and consistent.
The news:The Krispy Kreme–McDonald’s marriage is ending. The announcement comes less than two months after the companies said they were pausing a nationwide rollout—despite doughnuts being available in 2,400 McDonald’s locations—to reassess the profitability of the expansion. Our take: The breakup with McDonald’s comes at a tough time for Krispy Kreme—and for many other quick-service chains. The company has pulled its 2025 forecast, paused its dividend, and is now refocusing on what matters most: boosting cash flow, improving efficiency, and growing in a way that actually makes money in the US. The McDonald’s partnership gave Krispy Kreme more visibility, but not enough profit. With costs rising and margins getting tighter, the company is shifting its focus from rapid expansion to ensuring its business is built to last.
Housing hits more walls: Latest data show new signs of market weakening as builders pull back.
The trend: Casual dining chains that lean into value are luring cost-conscious consumers, even as broader economic uncertainty tempers discretionary spending. Our take: Consumers haven’t stopped dining out, but they’ve become more selective. They’re increasingly looking for value experiences that offer more for their money. That shift is pressuring some parts of the industry. Quick-service chains like McDonald’s and fine dining brands like Darden’s Ruth’s Chris and The Capital Grille are feeling the squeeze. But it’s providing an opportunity for casual dining chains that offer affordable indulgences. Their combination of sit-down service and budget-friendly pricing is hitting the mark.
E.l.f. SKIN is blending product marketing and comedy with “Sunhinged,” a comedy special that doubles as a PSA for sun protection.
Grocery delivery intermediaries like DoorDash and Uber are gaining ground, offering new ways to reach high-intent shoppers. Meanwhile, retailers like Walmart and Amazon continue to lead with strong delivery infrastructure and valuable customer data.
The news: Starbucks is rolling out “Green Dot Assist,” a generative AI (genAI) assistant built with Microsoft Azure and OpenAI, to 35 locations this month. The tool, which is accessed through iPads, aims to streamline operations, reduce service times, and improve accuracy for baristas while reducing reliance on manuals or intranet searches. Our take: Competitors and the industry will be keeping an eye on how Starbucks integrates AI assistants at scale. This is a potential blueprint for using AI not just for automation, but to enhance human touchpoints while increasing efficiency—provided all the moving parts work together.
The news: TikTok tweens and teens who make popular “Get ready with me” skincare routine videos may be harming their skin. The takeaway: Amid the closer social media scrutiny, skincare health brands should be clear about products that are not made for young skin. Social media teams need to be aware and proactive when interacting with tween and teen content creators.
The news: China’s coffee giants are making their way to the US in the hopes of unlocking a lucrative market to offset pressures back home. Our take: Luckin’s and Cotti’s US launches are a problem for Starbucks, which is already struggling to compete with the companies in China and having a hard time winning over customers at home. Unfortunately for Starbucks, many of the moves it’s making—streamlining its menu, enhancing the in-store experience, leaning into premiumization—run counter to consumers’ current desire for variety, convenience, and value. That has created an opening for chains like Dutch Bros (and now Luckin and Cotti), which are better positioned to capitalize on emerging trends in the coffee space and can undercut Starbucks on price.
The news: Starbucks is lowering prices in China for some drinks as the country’s relentless price wars force the struggling coffee chain to shift gears. Our take: Starbucks’ pricing actions are necessary to keep it competitive in a challenging market. But it is increasingly struggling to keep up with the likes of Luckin Coffee and Cotti, which are not only considerably cheaper but also better able to meet Chinese consumers’ rapidly shifting tastes. With conditions in the world’s second-largest economy unlikely to improve this year, Starbucks will have to find a way to become nimbler—and more affordable—to keep within striking distance of its rivals.
The trend: Consumer packaged goods brands are prioritizing profitability as macroeconomic headwinds reshape consumer behavior. For example, Kimberly-Clark is selling a majority stake in its international tissue business to Suzano and P&G is cutting roughly 15% of its global nonmanufacturing workforce. Our take: While short-term headwinds may be driving CPG companies’ actions, portfolio reassessment is a valuable exercise in any economic climate. Those that take the time to find efficiencies that enable them to emerge stronger and more agile will be better positioned for long-term success than companies simply focused on cutting costs.