As consumers look for value and innovation, challenger brands and private labels are eating into the profits of giants like Unilever. Inflation-weary shoppers are making more deliberate choices, opting for products that offer differentiation beyond the name.

“Mayonnaise is not just Hellmann’s anymore,” DeVito/Verdi president Ellis Verdi told The Food Institute. “These legacy brands don’t think they need to advertise. They measure success on shelf space and distribution. That’s an old way of looking at things.”

Instead, he considered a paradigm shift called ‘mental availability’ wherein consumers think of products beyond the market leaders.

On one hand, smaller brands can capitalize on this #ConsumerTrend with their streamlined ability to connect with consumers who seek quality, innovative products, and value. However, they also face scaling and pricing headwinds.

To remain competitive and profitable, CPGs must consider the following factors: unstable supply chains, rising food prices, labor shortages, and shifting customer demands.

A critical question remains: What percentage of consumers will continue to support smaller brands if these brands are forced to increase their prices? This balance is essential for smaller brands aiming to sustain growth while cultivating loyalty.