Article

The FMCG industry enters 2026 under growing structural pressure. Over the past decade, assortment breadth in grocery retail has expanded significantly, increasing choice complexity while physical shelf space has remained finite. At the same time, retailers have intensified assortment optimisation, raising delisting pressure and performance thresholds for every listed SKU. Growth no longer happens through unlimited shelf expansion, but through higher rotation, faster churn, and tougher economic justification per facing.

This dynamic is particularly pronounced in mature markets such as Germany, where innovation intensity has slowed and retailers have become increasingly selective about what earns the right to stay on shelf. More brands and variants compete for attention—yet fewer are allowed to underperform.

Parallel to this, private labels have evolved from price-driven alternatives into fully fledged brand systems. They are managed more clearly with strong design codes, and credible quality narratives. Their structural advantage lies not only in price, but in execution speed and retail control. Anything that can be rationally defined—features, claims, formats, even innovation patterns—can be replicated quickly. This does not make private labels the sole challenge. It exposes a deeper issue: many FMCG brands have diluted their core by spreading themselves too thin and anchoring differentiation too heavily in functional arguments.

Against this backdrop, 2026 marks a strategic turning point. The market no longer rewards expansion for its own sake. It rewards clarity, focus, and brands that know what they stand for—and what they deliberately leave behind. Four interconnected trends define this shift.