2025 CAGNY conference highlights

Presenting CPG companies effectively said they were “all in” on product innovation. Value-seeking and price-sensitive consumers likely need more than entertaining ads to open their wallets. Product innovation can provide both news to fuel the consumer conversation and increased value to justify a price point and improve the mix. Perhaps that is why core innovation again came in as the top trending conference topic. That’s in line with Deloitte’s 2025 Consumer Products Industry Outlook, where 95% of execs surveyed agreed that innovation will be a priority for them in the year ahead, with nearly two-thirds saying they will shift a greater share of their innovation investments to developing truly novel products.¹

Several companies also emphasized that they have invested in technologies, including artificial intelligence (AI) of various types, to help them innovate and launch products more efficiently. A handful of companies said they could now get new products out in half the time. Regarding the type of innovation, personal care and household goods companies, in particular, emphasize science-based R&D to improve product efficacy.

Many of these innovations build off strong core brand platforms or, in some cases, mash-ups of two or more brands, including those from third-party partnerships. The conference also uncovered more adjacent innovations like beauty devices, biotechnology in agriculture, or food service integrations. Companies said they are also innovating for go-to-market channel expansion, including online, away-from-home food service, and convenience stores.

When it comes to having the right product in the right categories, some companies also expressed their openness to (or recent examples of) divestitures and acquisitions. Mergers and acquisitions (M&A) is a top five topic in our trend analysis, and perpetual portfolio management seems to be now an important part of most of these CPG companies’ strategies.

While supply chains are an omnipresent topic at CAGNY, the conversation around them has shifted. A few years back, several CPGs said they ran their existing production lines flat out just to keep their high-volume SKUs in stock, and many said that they also used third-party co-manufacturers with a corresponding sacrifice to their margins. This year, they reported that their investments in new plants and production are coming online.

With more capacity, precision analytics, and advanced manufacturing technologies in place, CPG companies are saying they can support better service levels and growth in their mainstay offerings and now support more specialized and higher-margin production runs. They can also support new products and packaging, including variety packs.

Overall, companies say their operations, including supply chain, are much more digital. In Deloitte’s industry outlook, two-thirds of executives surveyed agreed that digital transformation is necessary as table stakes just to compete. Their investments in automation, analytics, and digital processing seem to be a significant source of efficiency savings used to fund other initiatives.

Some storm clouds are driving the supply chain conversation as well. CPG companies said several commodities like cocoa and green coffee are historically expensive and more difficult to source. And companies identified other uncertainties in the form of geopolitics and potential tariffs. Commentary at the conference reflected that CPG companies seem to believe that current supply chain profiles are somewhat insulated (through producing high percentages of products where they sell) and that they are preparing for whatever may come next.

Advertising and promotion (A&P) spending as a percentage of revenue was up in 2024.² Companies discussed maintaining those higher levels of investment in the year ahead. Along with innovation, they indicated they want to put their demand generation systems into a higher gear to help drive volume and market share growth.

However, along with a commitment to investing, companies emphasized new marketing efficiency gains and the ability to target their A&P investments for optimized return on investment (ROI), implying they could get even more from the same spending levels. Some of these high ROI spends come from Generative AI-assisted personalization, which seems to be moving from pilot projects to scaled execution. (Note: Marketing and efficiency were the number-one functional domain and purpose, respectively, sought from Generative AI investments in Deloitte’s industry outlook survey). At CAGNY, examples given included ads personalized on a consumer’s college alma mater or adapted and targeted for GLP-1 users. Here, greatly improved speed of creative execution was also emphasized.

Many companies’ marketing messages centered on the science-driven effectiveness of their offerings. In a word-of-mouth, social media-driven world, effectiveness is thought to get people posting and sharing. However, at least one company stood out for centering its efforts on community building and engaging content without a central product emphasis.

These efforts may be helped by better data and precision analytics, including the revenue growth management (RGM) systems discussed by eight in 10 presenting companies. And 2025’s pricing environment may put them to the test if inflation continues and more price-taking becomes necessary—even in the context of a more value-seeking and price-elastic consumer. Companies also said they are making more informed price pack architecture decisions to hit new sizes, price points, and occasions with the help of these systems. In Deloitte’s industry outlook, 62% of CPG executives surveyed said their RGM capabilities will play a major role in their success in the year ahead.

A search for better health and wellness is a long-standing industry trend, but this year, it was a thread through many company presentations. And the topic was the biggest gainer in our year-over-year analysis, rising 33 percentage points. Companies discussed health trend drivers like clean labels, functional food, protein, longevity, better-for-you options, hydration, and more as targets of their product innovation. Even pet parents, they say, are seeking healthier pet food options. Several companies mentioned getting into or growing their footprint in health and wellness through acquisition as well.

In a few short years, GLP-1 diet drugs have gone from being largely dismissed in CAGNY discussions, with several presenting companies saying it would likely have a minimal impact on sales, to being embraced as a significant opportunity to position new products. These GLP-1-friendly products often have high protein and fiber and are sold in portion control sizes.

Companies also appear to be on the lookout for potential new nutritional regulations and labeling requirements. The overall health and wellness movement already has companies on this journey to improve their products’ attributes. Still, potential regulations could cause more product reformulations to remove dyes, additives, sugar, and other ingredients. The subset of presenting companies that help food manufacturers with these reformulations suggested demand would be high but also that these reformulations can take some time to achieve. Product life cycle management (PLM) systems may help companies manage these reformulations and other products in their innovation agendas.

An assortment of other observations from CAGNY presentations:

• North American uncertainty–Companies said they are operating in a context of consumer value-seeking in North American markets, which, among other implications, may increase private label competition.
• Emerging markets–Many companies appear to be seeking growth from emerging markets, including Latin America, India, and other parts of Asia Pacific, which could include M&A.
• Retailer inventory depletions–Several companies noted their retailers in the first quarter sold more products than the inventory they replenished; in other words, shipments were lagging consumption, which garnered many questions from financial analysts.
• Pet humanization–Companies indicated that consumers continue spending on pets as family members, and companies with pet offerings in their portfolio seem to be investing accordingly.