The news: Kraft Heinz and Disney announced a multiyear partnership that will increase the CPG brand’s visibility across Disney’s physical and digital properties and give it access to the entertainment company’s beloved characters.

• Under the deal, Kraft Heinz will be the exclusive provider of select condiments, macaroni and cheese, and cream cheese at Disney’s North American parks and resorts and aboard Disney Cruise Line.
• Kraft Heinz will also be able to incorporate Disney characters and stories into packaging and marketing for 10 of its brands, including Heinz, Philadelphia, and Kraft Mac & Cheese.
• The two companies will collaborate on content produced by Disney’s studios and streaming platforms and funded by Kraft Heinz.

What it means: The partnership shows the lengths that CPG brands are going to in order to stay relevant with consumers. Their urgency is understandable: Companies are contending with both increased competition from private labels and declining unit sales amid GLP-1 adoption and budget concerns. The Trump administration’s immigration crackdown is slowing population growth, presenting yet another challenge for food manufacturers by weakening a long-standing source of demand.

• Store brands currently account for roughly 1 in 4 grocery units sold, with higher penetration at retailers like Walmart (31%) and Costco (34%), per Private Label Manufacturers Association data cited by The Wall Street Journal.
• US grocery unit sales declined 1.8% YoY in June, marking the fifth consecutive month of volume declines, according to a report by Bain & Company and NielsenIQ.

The tough environment is forcing CPGs like Kraft Heinz to seek new ways to engage shoppers that don’t involve lowering prices or doubling down on value messaging. By integrating Kraft Heinz products into Disney parks and cruise ships, the company is aiming to benefit from association with "The Happiest Place on Earth." Access to Disney’s IP also allows Kraft Heinz to stand out in the grocery store aisle and appeal to younger consumers.

Implications for CPGs: Kraft Heinz is betting that increased cultural relevance and experiential activations will help bring shoppers back to its brands—and keep them there. The company hopes that establishing a more visible presence in Disney’s theme parks and cruise ships will make an emotional connection with consumers, which will drive repeat purchases when they return home.

Still, the move faces significant limits. Three in five shoppers have changed their grocery shopping habits recently due to economic conditions, according to a May poll by Social Science Research Solutions for CNN. And a similar proportion (62%) trust the quality of private label foods as much as name brands, per an Ibotta poll, underscoring the challenges national brands face in convincing shoppers of their value.