• Revenue growth is expected to outpace workforce growth in 2026
• 97 percent of executives view Enterprise AI as a prerequisite
• 81 percent see reduced portfolio complexity as a major value lever

The consumer goods industry is reshaping the foundations of its competitiveness. Companies expect revenue growth of 6.7 percent in the current year and a further 7.0 percent in 2027. This places the sector ahead of all other industries in terms of growth expectations. Over the same period, however, headcount is projected to increase by only 0.5 percent and 1.4 percent, respectively. Growth is becoming increasingly decoupled from workforce expansion, a development made possible by AI-supported and AI-driven decision-making. At the same time, future revenue growth is expected to be driven primarily by improved management, automation, and leaner portfolios. These are among the findings of Horváth’s “Consumer Goods 2026” study.

The shift is reflected in the top three management priorities: Improving cost and earnings structures ranks first, followed by AI and digital transformation. Innovation, research, and development moved up to 3rd place, after ranking only 6th the previous year. In contrast, people topics became less important, dropping from 4th to 8th place. “The consumer goods industry continues to grow, but the formula for success is changing,” says Altfried Neugebauer, Partner at Horváth. “Future revenue growth will be driven less by adding headcount and expanding portfolios. The real differentiators will be higher productivity, reduced complexity, and better steering. Companies must deploy their existing resources much more strategically.”

Complexity Is Putting Pressure on Margins

Profitability is also expected to improve in 2026. Companies anticipate an average EBIT margin of 8.6 percent, following 8.1 percent in 2025. At the same time, the SG&A margin is expected to decline slightly from 20.6 percent to 20.4 percent. Compared with other industries, the consumer goods sector continues to exhibit structurally lower EBIT margins and higher SG&A ratios. As a result, the primary challenge increasingly lies in overhead costs, commercial spending, and the complexity that has accumulated over years within portfolios and organizational structures. Broad product portfolios, numerous variants, and increasingly complex organizations drive costs higher and make effective management more difficult. “In the consumer goods industry, the margin challenge is increasingly a complexity challenge,” explains Horváth Partner Neugebauer. “Companies do not simply need to cut costs. Instead, they need transparency into the actual value contribution of products, variants, and commercial activities. These are the areas where significant opportunities for structurally improved profitability can be found.”

Value Levers: Portfolio Focus, Pricing, and Trust

Portfolio decisions are evolving from a product assortment issue into a strategic lever for competitiveness. 81 percent of executives surveyed aim to improve both productivity and margins by reducing portfolio complexity. Companies seeking a competitive advantage will increasingly manage brands, products, variants, and channels based on their value contribution.

Pricing is also becoming more important. Yet pricing and revenue models rank only eleventh among strategic priorities, leaving considerable potential untapped. Depending on market and channel structures, pricing can generate substantial contributions to both revenue growth and profitability. Trust is another critical factor. 75 percent of executives surveyed view consumer trust as a key driver of pricing power and customer loyalty. Only with strong trust can pricing measures be implemented credibly and customer relationships strengthened over the long term. At the same time, 65 percent believe that platforms, retail partners, and algorithms are increasingly shaping how demand is generated. Consequently, 70 percent see direct-to-consumer models as a strategic lever for improving direct customer access while increasing control over pricing and margins. For manufacturers, this creates a new management imperative: visibility, customer access, and commercial steering must be integrated and managed more systematically.

AI Must Become Part of Enterprise Management

Expectations for AI are particularly high in this industry. 97 percent of executives surveyed agree that Enterprise AI will become a prerequisite for competitiveness rather than a differentiating factor. At the same time, the study shows that AI is not yet consistently embedded in the processes where critical management decisions are made. In terms of maturity, applications in performance management and decision-making still lag behind operational use cases. The biggest barriers to broader AI adoption are generally not investment costs. Instead, companies cite integration of AI into existing processes, data foundations, end-to-end integration, and data security as their most significant challenges.

“The question is no longer whether companies should use AI,” says Neugebauer. “AI must help organizations manage their businesses more effectively, whether through faster planning, more accurate forecasts, or better-informed portfolio decisions. Economic value is not created by the number of individual use cases but by how effectively they are embedded into processes and decisions.”

Resilience Requires a Clear Operating Model

Consumer goods companies headquartered in Germany plan to invest 19 percent of their capital expenditure budgets over the next five years in Germany. Another 15 percent is allocated to Western and Southern Europe, 11 percent to Asia excluding China and India, and 10 percent to North America. The concentration of investment in Germany and Europe suggests that resilience and control are becoming increasingly important factors in investment decisions. Workforce planning, however, is shifting more strongly toward growth regions. By 2030, 73 percent of companies intend to expand headcount in India, 67 percent in Asia, and 65 percent in North America. In contrast, only around 24 percent expect workforce growth in Western and Southern Europe.

Location, investment, and workforce decisions should therefore be aligned more closely with a clearly defined operating model. Resources can then be directed more effectively toward growth opportunities while strengthening resilience without creating additional complexity. “The study findings show that consumer goods companies are redefining their competitiveness across multiple dimensions,” Neugebauer concludes. “Growth, profitability, resilience, pricing, trust, and AI can no longer be managed separately. Success will depend on integrating portfolio management, the operating model, and technology into a single transformation agenda and executing it consistently.”

About the Study

For the Horváth study “Consumer Goods 2026” a representative sample of board members and managing directors from consumer goods companies was surveyed. The sample consisted of 62 respondents who participated in in-depth personal interviews. These interviews were conducted as part of Horváth’s international, cross-industry study “CxO Priorities 2026,” for which more than 1,000 business leaders were interviewed.