Brace for Impact: 3 Industry Trends That Demand Your Attention

In the second part of our ABP (Annual Business Planning) series, we spotlight three critical trends set to reshape the playing field for mid-to-large consumer goods suppliers in the year ahead. Let's unpack what they mean for your planning cycle — and what to do about them.

Retail media: the new cost of shelf

Retail media is no longer a nice-to-have. It's becoming a structural cost of doing business. Retailers across Europe are investing heavily in their own media platforms — sponsored search, display placements, loyalty-triggered activation — and they expect suppliers to fund them.

The numbers are significant. IAB Europe's projections show retail media ad spend growing sharply year over year, with the major grocery retailers capturing an increasingly large share. For suppliers, this means budget that was once allocated to traditional trade investment is now being redirected — often without a clear ROI framework.

The planning implication: retail media needs its own line in your ABP, with clear objectives, measurement criteria, and a return threshold. Treating it as a residual investment will leave you overpaying for reach that doesn't convert.

The retailers who are winning on retail media are building it into their supplier conversations early — as a joint growth tool, not a tax. Suppliers who engage proactively will get better placement, better data, and ultimately better results.

Commodity volatility

Cocoa prices hit historic highs in 2024, and the volatility in soft commodity markets is far from over. Sugar, wheat, dairy, vegetable oils — the input cost landscape for most FMCG categories remains highly uncertain.

For ABP purposes, this creates two distinct challenges:

Planning under uncertainty: How do you set a credible cost of goods budget when commodity prices can swing 20–30% within a single quarter? The answer is scenario planning — not a single cost assumption, but a high/base/low range with pre-agreed commercial responses for each.

Pricing strategy: If costs spike mid-year, do you have the pricing headroom to respond? Have you already given away your flexibility in the annual negotiation? The suppliers who navigated the 2022–2023 inflation cycle best were those who had built pricing mechanisms into their contracts — indexation clauses, re-opener rights, or structured pass-through agreements.

Build commodity risk into your ABP from day one, not as a footnote but as a strategic variable.

The rise of private label

Private label growth is structural, not cyclical. Across most Western European markets, own-label penetration has been rising for a decade — and the quality gap between branded and private label has narrowed dramatically in many categories.

For branded suppliers, this changes the planning equation in two ways:

Defending distribution: Retailers are rationalising ranges and giving more shelf space to their own brands. Branded suppliers who cannot demonstrate clear consumer pull, category growth contribution, or superior margin density will face delisting pressure — even on established SKUs.

Justifying the price premium: The value equation that consumers accepted in low-inflation periods is under scrutiny. If your brand charges a 30% premium over private label, you need a 30% better consumer experience to back it up. Not a perceived one. An actual, measurable one.

The ABP is the moment to stress-test your brand's value proposition: what does your brand genuinely do better than private label, and how do you communicate it with enough clarity and consistency to justify the premium?