Key Takeaways from Our 2026 Food & Beverage Outlook Call

By Jonathan Feeney and David Schick and David Katzman and Jack Hermann Published on January 20, 2026 PDF

TLDR: Last Friday, we hosted a 2026 CPG outlook call in with industry leader Mark Pogharian. The industry faces several challenges that are mainly structural, not cyclical including disruptors, digital marketing, & health trends which have reshaped the landscape in a lasting way.

Insights for 2026 include:

Input costs are falling, helping some but other costs are still inflationary.
Some categories (e.g. snacking, chocolate) remain resilient.
Broad-based growth and multiple expansion are unlikely in the near term.
Deals are unlikely to change the trajectory.
Proposed stimulus checks could help stabilize the low-end consumer.

U.S. center-store food & beverage categories remain under unprecedented pressure since the COVID peak for several reasons:

Heavy price increases (~30% over several years), while consumers face broader inflation (rent, energy, healthcare).
Transient COVID-era demand broke down discipline, expanded costs & sent false signals.
GLP-1 accelerated an existing health-and-wellness shift, including lower demand overall, higher protein consumption (bars, shakes, yogurt, cottage cheese) & outsized pressure on carb-heavy categories (cereal, bread, traditional snacks).
The KHC led ZBB era removed brand building investment that helped some & previously served as earnings cushion.

Disruptor brands are likely to keep taking more share, more easily across many categories (e.g. MrBeast, Goodles, Millie Moon) due to:

The evolution of highly capable co-manufacturers in the past 20 years.
Customer acquisition having shifted from traditional TV advertising to digital, where the playing field is level.

M&A and restructuring are unlikely to help much, considering:

Large transformational deals are unlikely; investors want “show me” results.
Smaller bolt-on acquisitions may happen but won’t materially move the needle.
M&A buys time but doesn’t solve core growth and relevance issues.

Falling costs can help but only selectively:

Some cost relief is emerging, but much will be reinvested into pricing, promotions, and defending share.
U.S. retail remains structurally more favorable than Europe or Canada, allowing for select margin capture.
Categories within snacking, especially chocolate, remain advantaged due to impulse buying, seasonality, and emotional appeal.

What can go right in 2026?

Potential stimulus (checks, military-related payouts).
Further reduction in input costs vs. prior years.
Unlikely to see historical growth rates or valuation multiples.
Likely best-case scenario: the industry has troughs and stabilizes, unlikely to rebound strongly.

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