THE SHIFTING LANDSCAPE OF FOOD, CONSUMER GOODS & RETAIL: CHALLENGES & OPPORTUNITIES
America’s relationship with food, consumer goods and retail is undergoing a fundamental shift, driven by evolving policies and changing consumer expectations. From tariffs to bans on food dyes and enhanced labeling requirements, companies in these sectors face mounting regulatory and market pressures. Success will depend on agility, foresight, and a deep understanding of consumer sentiment.
Americans and food: A changing relationship
The political winds are reshaping how Americans perceive food and health. Concerns about processed foods are widespread, with 55% of Americans citing chemicals and unsafe additives as a major risk to public well-being, according to the March 2025 Axios/Ipsos American Health Index.
Most Americans believe that chemicals or unsafe food additives are a risk to their health
What is the risk to your health and well-being of:
Source: Axios/Ipsos Poll, fielded February 28–March 3, 2025
Source: Axios/Ipsos Poll, fielded February 28–March 3, 2025
Notably, these concerns now outweigh fears of bird flu, respiratory disease outbreaks, and communicable illnesses like measles or tuberculosis. This shift spans all demographics, signaling a universal consumer recalibration toward food safety. For brands, the message is clear: ingredient transparency, cleaner formulations, and trust-building will be critical.
Many Americans are unsure if tariffs help American workers or if tariffs are good for them personally
Do you agree or disagree with the following:
Reuters/Ipsos Large Issue poll of 4,125 U.S. adults, fielded Feb. 13-18, 2025
Reuters/Ipsos Large Issue poll of 4,125 U.S. adults, fielded Feb. 13-18, 2025
Tariffs, price sensitivity and economic pressures
Public opinion on tariffs is nuanced, with many Americans uncertain about their broader impact. However, support declines sharply when consumers expect them to drive up prices or threaten job security.
With inflation and economic uncertainty top of mind, only 37% of Americans feel comfortable with their personal financial situation — a 14-point drop since November 2024, according to the Ipsos Consumer Tracker. Consumers are acutely price-sensitive, and many say they have or will adjust their spending if prices climb. Most already believe tariffs are contributing to higher costs, reinforcing skepticism about their benefits.
For companies, this means navigating a delicate balance: absorbing cost pressures to retain customers while maintaining profitability in an increasingly price-conscious market.
Strategic Imperatives for CPG, retail, and food & beverage brands
Many companies will attempt to absorb tariff-driven cost increases rather than immediately passing them on to consumers. While this strategy helps retain customer loyalty, it puts additional strain on already-thin margins, forcing firms to find efficiencies elsewhere.
Another likely consequence of tariffs will be supply chain disruptions leading to out-of-stocks. Facing higher costs, retailers could seek to manage costs by reducing quantities of goods sourced abroad. There could also be an adjustment period as retailers and manufacturers adjust to new cost structures or seek alternative sources. And if consumers stockpile in anticipation of tariffs, that could impact available stock.
For processed food brands, market dynamics vary. Legacy brands face a dilemma: Maintaining products that have driven sales for years while responding to a consumer shift toward health-conscious options. Reformulating products is no simple task — consumers expect cleaner labels but are resistant to changes in taste and texture. Meanwhile, challenger brands emphasizing clean-label, natural, and health-forward messaging have a growing market advantage.
To stay competitive, incumbents must adapt — diversifying product lines, reformulating to meet evolving consumer expectations, and rigorously testing new versions to preserve taste and brand equity. They also must address safety concerns by enhancing transparency about their supply chains, sourcing practices and safety protocols. Those that resist this shift risk losing relevance.
The bottom line
The winners in this changing landscape will be those who act decisively — anticipating shifts, adapting swiftly, and aligning with evolving consumer priorities. Resistance to change is not an option. Those who embrace the future will emerge stronger, more trusted, and better positioned for long-term success.