- Cost and margin pressures dominate the outlook for the remainder of the year
- Adjustments to global production structures and supply chains gaining strategic importance
- Largest cost savings expected from AI deployment in sales and marketing
- 70% plan to expand distribution via TikTok and other social platforms
- Sustainability drops eight places in management priority ranking
The consumer goods industry is bracing for challenging months ahead. Executives from leading German manufacturers expect to close fiscal year 2025 with an average EBIT margin of around 8% – a decline of 11% compared to 2024 – driven by persistent margin pressure. Revenue growth, however, is projected to remain robust at approximately 7%, supported by price adjustments and fluctuating consumer demand.
“Companies with optimized production and cost structures, and the ability to respond flexibly to market shifts, are best positioned to succeed in the current environment,” says Altfrid Neugebauer, Partner and Consumer Goods Expert at Horváth.
Major Shifts in Global Production Networks
Unlike other sectors, the expected revenue growth in consumer goods is not accompanied by a notable increase in headcount, even on a global scale. Workforce growth for 2025 is projected at just +0.8%, compared to 2.6% across all industries and 1.6% in manufacturing overall.
However, the trend toward global shifts in production and staffing is consistent with other manufacturing sectors. To streamline cost structures, companies are increasingly expanding their workforce in Asia, Eastern Europe, and India – while scaling back in Germany, Western, and Southern Europe.
“The driving factors behind these shifts are high labor costs in Europe and North America, combined with attractive growth opportunities in Asian markets due to the rise of the middle class,” explains Neugebauer.
AI-Driven Cost Savings – Sales and Marketing in Transition
“AI adoption is expected to boost efficiency in sales and marketing by 17% over the next three years – effectively making one in six roles redundant,” says Altfrid Neugebauer from Horváth. In terms of cost impact, companies anticipate savings of around 11%.
“AI enables significantly more cost-effective advertising, streamlines customer communication, and enhances internal processes,” the Horváth expert adds. “However, there are still major blind spots – particularly in performance management and executive decision-making. In fact, 45% of surveyed companies have yet to explore targeted AI applications in these areas, despite the availability of mature solutions”.
Strategic Shift Toward TikTok and Social Commerce
A growing number of traditionally conservative brands are embracing social platforms like TikTok and Instagram for product distribution. Seventy percent of surveyed companies plan to expand their presence on these channels – whether through owned accounts, e-commerce platforms, or influencer partnerships.
Sustainability No Longer a Strategic Priority
According to the Horváth study, sustainability is no longer a top strategic focus. While two-thirds of companies remain committed to their net-zero goals – and one-sixth have already achieved them – one in three has postponed its targets or is considering doing so.
As a management priority, sustainability has dropped eight places compared to last year, falling from #4 to #12. “Companies are fulfilling regulatory requirements but no longer view sustainability efforts as a source of competitive advantage,” says Horváth Partner Altfrid Neugebauer.
Fifty-eight percent of executives report that consumer willingness to pay for sustainable products has declined significantly, further diminishing the relevance of the topic.
Management Priority Ranking in the Consumer Goods Industry for 2025
(Change vs. 2024)
- Cost optimization (unchanged)
- Digitalization & AI (unchanged)
- Optimization of production structures and supply chain (+3)
- Strategic HR topics (-1)
- Cybersecurity (unchanged)
- Innovation and R&D (new priority)
- Reorganization of structures and processes (unchanged)
- Liquidity improvement (+1)
- Financial performance & risk management (+2)
- Group strategy & business model optimization (+2)
- Pricing and revenue model adjustments (-3)
- Ecological orientation / sustainability (-8)
- M&A and divestments (unchanged)
About the Study
The Horváth study “Management Priorities in Consumer Goods 2025” is based on in-depth interviews with approximately 100 senior executives from leading consumer goods companies. A total of 95 personal interviews were conducted as part of Horváth’s broader international CxO Priorities Study, which surveyed over 1,000 top executives across industries in Q2 2025.
