Talk to anyone in food and drink right now and you hear the same numbers. Volumes down 15 per cent. Down 20. Down 30 in some categories. Input costs still climbing, consumers trading down the retailer ladder, and shoppers buying into premium less often than they did a year ago.
The instinct in a market like this is to sit tight. Protect the core range, push volume on what you have, and wait for demand to come back.
Chris Moxon, our Group Sales Director, thinks that instinct is about to get expensive.
The question retailers are about to ask
Our read on the second half of the year is blunt. Retailers and QSRs are watching demand soften across their categories, and they are going to start putting the question to the companies that supply them: where is the innovation?
“Everybody is in the same position. The only way out of this is to innovate your way out. Whether that is product innovation or smart category innovation, it is the only way to stay relevant and grow your volume.”
Chris Moxon, Group Sales Director
The companies that arrive with answers before the question lands will set the agenda. The ones that wait to be asked will spend the next year on the back foot, defending range reviews instead of leading them.
Why waiting is a two-year decision
Here is the maths that matters. Even when innovation moves quickly, it takes three to six months from starting the work to getting a product in front of a retailer. Sit on your hands for another six to twelve months and you are looking at a two-year cycle before anything new hits a shelf.
Two years is a long time to bet on market conditions improving. Costs across feed, energy and ingredients show little sign of easing, and when prices rise at the fixture, consumers do what they always do. They trade out of premium into the tier below, or they trade down the retailer ladder altogether. It is why value operators tend to win when times are hard.
You cannot control any of that. What you can control is whether you have something new and relevant to sell into it.
The market is moving, even if volumes are not
Flat demand does not mean a static market. Underneath the headline numbers, consumer behaviour is shifting fast, and every shift is an opening for the companies paying attention. We love this part of the job, because this is where the opportunities live.
The ultra-processed correction.
The vegan category has fallen sharply, with some reports putting the decline near 20 per cent, as consumers turn away from soy and pea protein formulations. People are going back to cooking with vegetables and buying ingredients they recognise. Produce is feeling the benefit.
Flexitarian, done properly.
The interesting work is in blends. Think 50-50 meat and vegetable mince that gives consumers the meat they want and the veg they feel good about, at a price that holds up. Best of both, built for how people actually eat now.
Sensory sells.
Crunchier, spicier, more textured. Great taste is the entry ticket, but the products flying right now deliver an experience that makes people want to eat them again. Look at what Frank’s RedHot and McDonald’s have done together.
Collaboration is driving premium.
Gymkhana’s range with Waitrose shows how a strong restaurant name and a retailer can grow the premium end of a category together, even in a downturn. Co-branding, platforms and alliances are all live routes to growth.
Meanwhile, premium own label ranges face their own challenge. Consumers still believe in quality tiers, but they are buying into them less often. Solving that frequency problem is an innovation job, not a pricing job.
“It is not always a race to the bottom on price. It is about how you innovate to keep your volume and your value high. The first companies to do that will be the ones that win.”
Chris Moxon, Group Sales Director
Where to start
If you came to us tomorrow and said help me take the fight to a retailer, here is how the first sprint would run.
1. Interrogate the portfolio. Line up performance against 2025. Find where you are under-indexing and be honest about it. If steak held up but three other cuts fell away, that is your starting point.
2. Understand the switch-out. Targeted qualitative research with the consumers who left. Is it price? Is it the product? Is it a flexitarian shift, or GLP-1 changing appetites? You cannot fix what you have not diagnosed.
3. Build the burning platforms. Turn the diagnosis into innovation platforms you can take to the retailer. We know what your customers are telling us, here are the issues, here are our fixes, and here are the products. That is a conversation retailers want to have.
What it costs, straight
Because you are going to ask, and because we would rather tell you. A focused programme like the one above typically looks like this: around £10,000 to £12,000 for four online qualitative groups, a couple of thousand for data mining, and roughly £25,000 for the innovation sprint itself.
In other words, an investment of £25,000 to £40,000 depending on scope is the first spade in the ground. Set against the cost of a delisting, or another year of declining volume, it is designed to pay for itself several times over.
Take the fight to them
There is genuine uncertainty in the market and nobody should pretend otherwise. But the choice in front of food and drink companies is not between risk and safety. It is between innovating now, while there is still time to shape the conversation, or explaining to a retailer in twelve months why the range looks exactly the same.
We start with your challenge, not our methods. If your challenge is where is the growth coming from, let’s talk.