Authored by Tessa Wiegand, Chief Transformation Officer at Curion
This week I read Bain’s Consumer Products Report 2025 (which is an extremely interesting and informative read!) In short, the report states that CPG growth is slowing after a run of unsustainable price increases and that CPGs must accelerate their digital transformations and rethink their growth algorithms. It also showed that in 2024 the trend of consumers seeking value and trading mass brands and value brands for private label prices or premium product quality continued to accelerate and that CPG executives top concern was the rise in competition for shoppers. When I read that one of their core recommendations encouraged CPGs to “Rethink their sustainable growth algorithm, by maximizing current profit pools through superior execution and making bold portfolio moves that expand categories or open up new profit pools” I got excited. But then the details of the recommendation pointed to data-driven marketing, sales execution, and revenue growth management, category expansion, and M&A as the solutions.
Where in all of this is product?
This is my gentle reminder – without a product, the other “P’s” of marketing don’t matter. Without a product, there is nothing to price, place, or promote.
While the impacts of marketing P’s are often difficult to parse apart, more than 70% of consumers cite product quality as the main factor that keeps them loyal to a brand and product quality contributes more to customer satisfaction than either price or brand image. And it is repeat purchase, where product is undoubtedly the key “P”, that drives the majority of company revenue. The importance of product also magnifying in the e-commerce era. 99.9% of consumers consult product reviews before making a purchase and a one-star increase in average star rating can increase a product’s sales by as much as 26% . Brands can no longer hide product quality from their consumers and consumers are clearly speaking with their wallets.
For those that prefer qualitative indicators, consumers are shouting from the rooftops that they care about product quality and experience. As noted in the Bain report, consumers are doubling down on their split between value-oriented private label brands where quality matches or exceeds price and high-quality premium products that consumers feel justify their prices. Brand loyalty continues to decline and the increasingly common multi-location shop, going to Aldi, Trader Joe’s, and Costco in addition to traditional grocery stores like Jewel, highlights that even placement doesn’t hold up to the consumer desire for product value and quality.
As the cherry on top, “crunchy moms” have brought natural ingredients and overall food quality to the forefront of American culture and politics. Within the last year, grassroots movements have staged notable protests against CPG giants and have most recently led to increased food regulation at the FDA with the ban of Red 3 dye.
Through all of this, I have yet to see a CPG trend report encouraging a re-focus on product quality.
Top performing products are 15x more likely to have long term market success than poor performing products. However, after a decade of repeated top-down CPG cost-cutting driven product reformulation, the average traditional brand’s products are often not only not top performing, but they may also be the worst quality they’ve ever been at the highest prices they’ve ever been.
CPG companies are facing a product crisis. While the recent political news of tariffs, supply chain issues, and “Make America Healthy Again” are forcing conversations within brands about ingredient costs and quality, there is still a lack of conversation about the overall importance of product. It is understandable how product has become the ever-expanding elephant in the room. Product innovation and manufacturing are expensive and reducing product innovation investment, cutting R&D budgets, and cost-cutting product are immediately margin accretive in the short-term. But those margin gains are also short-lived. The two leading shelf-stable macaroni and cheese brands, have seen their market share decline by nearly 5% in just 3 years. And that story isn’t unique. Mass and value brands have seen a combined decline in market share of nearly 2% since 2020. When considered in the context of tens of millions of dollars of revenue erosion each year that looks likely to continue to expand, suddenly the incremental hundreds of thousands of dollars in product innovation or adding a quarter of cent of cost per unit to use a better ingredient doesn’t seem so expensive.
While undoubtedly 2025 will again be a year of AI, of digitization and data-driven insights, and cost saving productivity gains, I have an additional perspective. My hypothesis – brands who recognize their growth problem is a product problem and make longer term investments to fix it, will have the opportunity to regain their footing. Brands that continue to focus on their business at the cost of their consumers will find that no price, promotion, placement, or person can ultimately overcome a bad product.
Looking to create better products?
Curion specializes in delivering impactful insights to the world’s top CPG companies, helping them develop winning, repeatedly purchased products. Curion’s deep data-driven product insights, sensory expertise, and state-of-the-art consumer centers enable them to uncover responses to critical client objectives. With over five decades of experience in the product testing industry, Curion is dedicated to guiding clients with their proprietary XP Xperience Performance platform, connecting brands to consumers at every step.
An innovator in the industry, Curion developed a groundbreaking benchmarking product testing method, the Curion Score™, which has become a trusted and sought after tool within the industry. As one of the largest product and consumer insights companies in the U.S., Curion has built a reputation for excellence and trust among the world’s leading consumer brands. Curion’s commitment to innovation and expertise, coupled with a passion for delivering actionable insights, makes Curion a valuable partner for companies looking to develop and launch successful products.
