The news: Procter & Gamble and McCormick face higher costs and uncertain demand in the year ahead.

• Both companies expect tariffs to take a sizable bite out of profits this year: P&G said that tariffs will cost it $400 million this fiscal year, while McCormick expects an incremental impact of $50 million in FY 2026.
• Both companies are passing those and other costs on to consumers, with mixed results. While McCormick reported a slight increase in Americas sales volumes for the fourth quarter ended November 30, 2025, P&G noted volume declines in categories such as grooming, health care, and baby and feminine care after applying price increases.

Zoom out: Despite the difficult consumer backdrop in the US—which P&G CFO Andre Schulten called “the most volatile we’ve seen in a long time”—both companies are confident in their ability to grow.

• In P&G’s case, the company expects to benefit from easier comps as it moves into the second half of its fiscal year. It is also optimistic that investments in innovation will accelerate US growth.
• Like P&G, McCormick is banking on new and improved products to drive sales and remain competitive. The company gained unit share in Q4 for the fourth consecutive quarter, which it credited to new products like its holiday finishing sugars and investments in marketing.

However, the two companies’ determination to push through higher prices could backfire. More than three-quarters of US adults cite stress from grocery costs, which is contributing to higher private label spending and pushing households to fully use shampoo and detergent before restocking.

• A significant share are pinching pennies wherever possible: 27% of US consumers report purchasing mostly store brands, 23% are buying low-cost ingredients, and 19% are buying less than they wanted, according to a December Deloitte survey.
• While McCormick and P&G contend that the quality of their products will keep consumers from buying cheaper alternatives, rising financial stressors—particularly on lower- and middle-income households—could force shoppers to trade down out of necessity.

Implications for CPG companies: The volatile environment is forcing CPGs to rethink their product and marketing strategies.

• P&G’s strategy of using innovation to premiumize its products has worked to a certain degree, enabling it to continue expanding net sales even as volumes have fallen. But as the company itself acknowledged, that tactic has largely run its course. Instead, P&G’s goal under new CEO Shailesh Jejurikar is to demonstrate its value proposition—without raising prices—to drive customer acquisition and restore volume growth.
• McCormick is increasing its brand marketing budget and exploring channels like social commerce to keep pace with shifts in how people discover products and to capitalize on booming interest in health and wellness.

To succeed in 2026, CPGs must invest in innovation, highlight their unique value propositions, and make sure they’re visible on channels like social media that play an outsize role in product discovery and consumption trends.