Key Takeaways:
- Food manufacturers must shift away from relying on price increases, focusing instead on occasion-based selling and product innovation to drive growth.
- Digital transformation and analytics capabilities are becoming essential for optimizing pricing, promotions, and consumer engagement.
- Companies are prioritizing long-term operational efficiency through AI and automation rather than traditional cost-cutting measures.
Food manufacturers face a pivotal year ahead as pricing power continues to diminish and consumer behavior evolves. According to Deloitte’s latest industry outlook, 2025 will require companies to look beyond traditional pricing strategies to achieve profitable growth.
The research, which analyzed the top 100 global consumer products companies and surveyed 250 industry executives, reveals the key areas for food manufacturers to focus on in the year ahead.
Product innovation and portfolio management
A striking 85% of food and beverage executives report they are increasingly orienting their strategy around occasion-based selling. Rather than simply competing in traditional category segments, leading companies are thinking more broadly about consumption occasions — considering the full spectrum of alternatives consumers might choose for any given eating moment, from quick snacks to full meals, across all formats and preparation methods. This expanded view helps companies better understand their true competitive set and develop products that better serve specific consumer needs and moments.
Most (95% of) consumer products companies are prioritizing new product introduction in 2025, with 80% increasing their innovation investments. Notably, almost two-thirds are shifting toward developing truly novel products rather than incremental innovations.
Some of that innovation may be directed toward products for value-seeking consumers — 67% of companies are seeing more consumers trading down to lower-cost options, even among high-income shoppers (52%). However, 66% of companies plan to use more product premiumization to boost the profitability of their sales mix.
Demand generation and analytics
Consumer products companies are planning to significantly increase their investment in digital channels and analytics capabilities in 2025:
- Nearly 80% are boosting their investment in digital channels and platforms to better reach and engage consumers.
- Analytics capabilities are proving particularly valuable, with 74% of companies reporting that these tools are helping them set more precise prices, promotions, and discounts.
- Revenue growth management (RGM) systems are critical, with 62% of executives saying these systems will play a major role in their success in the year ahead.
This comprehensive push toward digital transformation reflects the industry’s recognition that data-driven decision-making is essential for maintaining competitiveness in today’s market.
Operational efficiency and technology
To fund growth initiatives, companies are focusing on transformative efficiency through digitalization and automation in the year ahead.
An overwhelming 96% of executives are making productivity improvement a priority in 2025, recognizing the need to optimize operations. This push toward efficiency is reflected in technology investments, with 76% of companies increasing their investment in AI technologies.
Additionally, 68% of surveyed executives report they are investing in smart technology solutions and automation specifically to optimize operating costs. This suggests companies are taking a long-term view of efficiency rather than relying on traditional cost-cutting measures.
Recommendations for food manufacturers
As food manufacturers plan their strategies for 2025, these four key areas will help drive profitable growth:
- Develop products with clear occasion-based positioning, considering the full competitive set beyond traditional category boundaries.
- Invest in precision analytics to optimize pricing and promotion strategies, particularly as pricing power diminishes.
- Use AI and automation to drive operational efficiency, with particular focus on supply chain and production processes.
- Consider strategic divestments of underperforming product lines while acquiring strong brands that can drive growth.
As the industry moves beyond the era of price-driven growth, 2025 stands out as a potential inflection point for food manufacturers. Success will likely belong to companies that can simultaneously innovate for changing consumer occasions, leverage data for smarter decision-making, and transform their operations through technology. Those that hesitate to make these strategic shifts risk falling behind more agile competitors in an industry that’s rapidly redefining the parameters of profitable growth.
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