As we move through 2025, retail is experiencing its next wave of transformation—and it's not slowing down anytime soon. Understanding what's next is insightful and essential for CPG brands' survival and growth. The pace of change in consumer expectations, technology, and retail strategies is reshaping the landscape faster than many suppliers can adapt. Here are the key trends defining retail this year and actionable insights to help CPG brands stay ahead of the curve.
Sustainability: Beyond the Buzzword
Consumers have spoken loud and clear: Sustainability is here to stay. According to a NielsenIQ study, 78% of global consumers say a sustainable lifestyle is essential, and 62% are willing to pay more for products from sustainable brands. In 2025, sustainability will be more than a nice-to-have feature—it will be table stakes.
CPG brands that want to thrive need to do more than slap a green label on their products.
Real sustainability means reducing waste, optimizing packaging, and demonstrating transparency. Think of companies like Grove Collaborative, which built its brand on eco-friendly, refillable packaging systems. Brands should also be ready to measure and communicate their environmental impact—today's consumers demand proof, not promises.
Pro Tip: Collaborate with retailers on in-store and online initiatives such as refill stations, carbon-neutral shipping options, or sustainability-focused marketing campaigns. These partnerships can boost your brand visibility and drive loyalty.
The Private-Label Surge Continues
Private-label growth has been a quiet juggernaut over the last few years, and 2025 will see it enter a new phase of innovation and sophistication. Retailers invest heavily in their private-label portfolios, offering premium and niche options that rival national brands.
IRI said private-label sales grew 10.2% in 2024, outpacing branded goods.
Suppliers must adopt a strategic mindset in today’s competitive landscape. Instead of viewing private labels as a threat, they should look for opportunities to form partnerships or licensing agreements. Retailers often seek reliable partners to assist in producing their store brands, which can create a mutually beneficial situation for both parties.
Real-World Example: Costco's Kirkland Signature line consistently dominates sales because of its lower prices, and its quality meets or exceeds that of national brands. If you can position yourself as a quality-first supplier, you may become a valuable resource to retailers expanding their private-label lines.
AI-Driven Consumer Insights Will Redefine Personalization
By 2025, artificial intelligence (AI) will have evolved from backend operations to become a central element of customer engagement. AI is no longer limited to inventory management; it now focuses on hyper-personalizing the shopping experience. Top retailers are using AI to analyze large volumes of consumer data, enabling them to predict trends, optimize pricing, and create targeted marketing campaigns.
For instance, Walmart's predictive analytics tools transform how suppliers anticipate demand and customize their product assortments. Additionally, AI-driven recommendation engines increase online basket sizes and in-store sales by suggesting complementary products.
What CPG Brands Can Do: Leverage retailer data portals and improve your analytics capabilities. Gaining insights into trends in your category and understanding consumer behaviors is extremely valuable for retail buyers.
Omnichannel 2.0: Bridging Physical and Digital
By 2025, the omnichannel experience will become more seamless and interconnected. Shoppers will expect to transition easily between digital and in-person touchpoints. Services such as click-and-collect, curbside pickup, and same-day delivery have moved from perks to essential expectations.
Consumer packaged goods (CPG) brands should focus on creating product content that stands out across all channels. High-quality lifestyle images, engaging videos, and detailed product descriptions are essential for a positive digital shopping experience.
Pro Tip: Ensure your eCommerce strategy aligns with your in-store presence. Conduct regular audits to confirm product images, descriptions, and pricing are consistent across retailer websites and apps.
Health and Wellness as a Lifestyle Priority
The wellness movement has evolved beyond traditional categories like vitamins and fitness. In 2025, consumers will seek health-focused options in every aisle, ranging from low-sugar condiments to functional beverages with added benefits. According to McKinsey, the global wellness market is valued at over $1.5 trillion and is projected to grow annually from 5% to 10%.
For CPG brands, the key is to meet consumers where they are by innovating with better-for-you ingredients and transparent labeling. Don't underestimate the power of education: explain the "why" behind your product's health benefits, whether through social media, influencer partnerships, or packaging.
Automation in Supply Chains
Over the past few years, supply chain disruptions have pushed retailers and brands to rethink logistics. In 2025, automation technologies—from warehouse robotics to predictive restocking—will become more mainstream. Retailers expect their suppliers to be agile and proactive.
CPG brands should consider investing in technologies that improve visibility and response times. Providing retailers with real-time updates on inventory levels, production schedules, and shipping timelines is a competitive advantage.
Tip: Strengthen your relationships with third-party logistics providers (3PLs) that offer advanced automation tools. This can reduce fulfillment times and increase accuracy.
Increased Focus on Retail Deduction Recovery
One emerging trend suppliers should pay attention to in 2025 is the increasing scrutiny surrounding deduction recovery. Retailers are tightening their compliance programs, which risks suppliers losing significant revenue due to chargebacks and deductions. Industry experts estimate that suppliers lose up to 15% of their potential revenue each year because of unresolved deductions.
Brands must proactively audit their retailer transactions and partner with deduction recovery experts who can help recover funds quickly. Deduction recovery can be the difference between a strong profit margin and a missed opportunity in an environment where every dollar matters.
Staying Ahead of the Curve
The stakes for CPG brands in 2025 couldn't be higher. The brands that will succeed can innovate, adapt, and build strong partnerships with retailers. Sustainability, data-driven decisions, and omnichannel readiness are no longer trends—they're the new fundamentals.
Staying informed and agile is the key to navigating private-label competition or embracing AI-powered insights. By focusing on the right areas and aligning with retail partners, your brand can survive and thrive in this rapidly changing landscape.
Let's make 2025 a year of smarter growth, deeper connections, and resilience in the face of change.