Consumer products industry outlook 2025: new levers for profitable growth

As brands work to keep pace with a transforming consumer base, getting price and product portfolio right—and doing so profitably—is becoming more difficult.

For consumer product companies, balancing the core components of price, volume and product mix is essential to achieve profitable growth. Over the past few years, with major demographic, political, environmental, technological and cultural shifts underway, finding the right balance has become increasingly complicated.

From 2021 to 2023, companies in the consumer products industry often relied on raising prices as the cost of goods increased, which helped them grow sales profitably. While the ability for companies to raise prices started to decline last year, consumers largely continued to spend. In 2025, most industry executives no longer anticipate significant price increases. However, implementation of proposed tariffs could change their disposition.

Seventy percent of consumer product executives surveyed do not think their companies could raise prices by even 3% without materially affecting demand, according to Deloitte’s “2025 Consumer Products Industry Outlook” and 64% of executives say that despite inflation easing, consumers are still negatively comparing the higher prices they pay now to the lower prices they were paying in 2019, pre-Covid.

With these pricing challenges, consumer product companies will likely focus on product portfolio and mix to entice consumers, as well as invest in a broader set of demand-generation capabilities. Businesses are also expected to create transformative efficiency to produce savings that help fund those investments and improve net income.

Shifting product portfolio and mix

While increasing unit volume sold is still an important lever to help consumer product companies drive profitable growth, only 22% of executives surveyed say volume is their company’s primary growth lever in 2025. Nearly three-quarters (72%) of consumer product executives surveyed say product mix will receive the most emphasis in their profitable growth strategy in 2025.

How are companies planning to pull the product mix lever? Most consumer product executives (95%) say introducing new products or services is a priority for their company in 2025 and 80% plan to increase investment in product innovation. Furthermore, nearly two-thirds of executives surveyed say they will shift a greater share of their innovation investments to developing truly novel products as opposed to minor enhancements or changes like line extensions.

As interest rates come down, consumer product companies are also taking a closer look at their portfolios and are divesting and acquiring as needed. Just over half of executives surveyed say their companies regularly divest underperforming lines of business.

2025 could also be a bigger year for acquisitions. Sixty percent of consumer product executives surveyed say they expect to increase the number of acquisitions they make this year.

Boosting demand generation efforts

Shifting commerce channels and new retail models are disrupting traditional demand generation strategies. As audiences become increasingly fragmented, brands must find a way to reach these smaller cohorts of shoppers, particularly with messages personalised to consumers’ specific needs. At the same time, consumers are becoming more demanding about where they want to discover and purchase products.

To reach consumers across multiple channels, 79% of consumer product executives surveyed say their companies will be investing more in digital channels and platforms in 2025. Nearly 70% plan to increase their 2025 marketing and advertising expenditures as a percentage of revenue, while 76% plan to offer more sales discounts and promotions than they did in 2024.

These demand generation investments will be more targeted, as consumer product companies continue to embrace the use of precision analytics to make granular business decisions. Seventy percent of executives surveyed see precision analytics as a way to better optimise the ROI of their marketing investments and nearly three-quarters say their analytics capabilities are helping them be more precise in setting the right prices, promotions and discounts.

One category of precision analytics, revenue growth management (RGM) systems, continues to gain prominence in the industry: 62% of those surveyed say their RGM capabilities will play a major role in their success in the year ahead.

Achieving transformative efficiency

Changing product portfolio and mix and improving demand generation often require funding. Many consumer product companies are focusing on cost savings to fuel these reinvestments. To get there, companies should consider how they can simplify, digitise and automate their business processes, including finding efficiencies in their front office, supply chain, procurement, and IT spending.

The vast majority (96%) of executives surveyed plan to make improving productivity a priority in 2025. And they are backing up this priority: More than 80% say their company will invest more in productivity in 2025. Straight up cost-cutting is on the agenda as well, with almost two-thirds of executives saying their organisations will focus more on decreasing costs in 2025 than they did in prior years.

Organisations are exploring other ways to achieve transformative efficiency. More than two-thirds (68%) of executives surveyed work at companies that are simplifying or otherwise improving their organisational structures and the same percentage are investing in smart technology solutions and automation to transform and optimise their operating costs.

About three-quarters of executives surveyed say their companies are increasing investment in artificial intelligence (AI) and more than half cite improved efficiency and productivity as benefits they hope to gain with AI.

2025 could be a pivotal year for the industry. As they seek to achieve profitable growth, consumer product companies can consider boosting product innovation and more proactively divesting and acquiring lines of business to reshape their portfolios. They can also look at shifting more marketing to digital and using precision analytics to drive ROI on their marketing investments.