Features

01.27.25

Ahead of FMI Midwinter Conference, Advantage CEO Dave Peacock outlines 5 industry trends to watch

Michael Browne

Despite ongoing economic pressures on grocery shoppers and the looming threat of tariffs, there’s plenty of reason for optimism for the retail industry in 2025, says Advantage Solutions CEO Dave Peacock.

With inflation moderating, consumers are able to wield more purchasing power on their shopping trips. New tech advancements will help brands and retailers grow sales. And a healthy labor market combined with a pipeline of new product innovation should help boost consumption, giving a shot in the arm to brands and retailers weathering shifting market conditions.

Those topics and more will be top of mind as leading consumer goods manufacturers and retailers gather at this year’s FMI Midwinter Executive Conference in Marco Island, Fla.

In advance of the year’s first key gathering of executive-level food retail industry players, Peacock, also a member of the board at FMI-The Food Industry Association, shared his thoughts on the trends that will shape the year ahead in the food retail industry — and how Advantage will work with brands and retailers to make it a successful year.

“In terms of my expectations for the industry, I am optimistic that the second half of ’25 will feel better to people in the consumer space,” Peacock said. “As brands and retailers have refined their pricing, as innovations that companies are working on start taking off, and as they focus on strategies that will drive unit movement within the industry, those should start bearing fruit in the second half of ’25. So, I’m bullish.”

According to the most recent Advantage Outlook, an industry-leading survey of senior-level executives’ expectations at leading retailers and consumer products companies across the U.S., more than 85% of retailers expect to see unit volume growth in their individual business in 2025, while 80% of surveyed manufacturers anticipate unit volume growth, mostly in the 1% to 4% growth range.

Here are some of the trends Peacock and Advantage have their eyes on in 2025.

Inflation and the economy

“As inflation continues to moderate, you should see growing consumer confidence,” Peacock said.  “And I do think the farther you get away from an election, you generally get better consumer sentiment.”

While grocery prices remain high compared with a few years ago, inflation is slowing to a more historically normalized rate, which eventually will take some pressure off consumers, he said.

And while changes in economic and trade policy, including tariffs, are likely to create uncertainty and filter throughout the economy. Even though he doesn’t expect tariffs to have as significant of an effect on food, “it will have an impact, and companies are adjusting and trying to manage around that,” Peacock said.

Advantage, he said, has been working through those issues with clients, noting the company’s “deep experience helping our clients survive and thrive, regardless of market conditions.” 

Tech advancements

“Technology, AI, automation and other new tools are very quickly changing the retail industry,” Peacock said. “Some of these new tools already are helping us at Advantage deploy talent more efficiently to better serve our clients.”

New retail technology powered by AI also is enabling much faster, easier access to high-quality data, allowing Advantage to generate real-time insights to help its clients navigate a range of issues across the path to purchase.

“The continued growth of AI will be a big trend to watch in 2025,” Peacock said. “AI has now reached mass adoption and will continue to be integrated into all aspects of the retail industry, helping drive innovation and maximize return on investment.”

Then there’s retail media, which Advantage expects will continue to grow in 2025 as more traditional advertising shifts to data-driven campaigns that blend physical and digital channels. Enabled by a new collaboration with Swiftly, Advantage is combining its in-store and omnichannel expertise, direct relationships with retailers and unparalleled workforce with Swiftly’s ability to reach shoppers digitally with targeted promotions, rebates and ads.

Finally, e-commerce will continue to grow in the year ahead. Overall, as a percentage of total grocery sales, it’s still relatively small, but as the technology improves and adoption increases, online grocery shopping will become even more commonplace and represent more of the consumer’s dollar.

“That means everyone, from brands to retailers, will need to consistently revise and update their strategies to reach shoppers where they are,” he said.

Healthy outlook

Health, wellness and a focus on nutrition will continue to be top priorities for U.S. consumers. That space has been growing about 10% a year and is now worth $480 billion.

“In line with that, GLP-1 drugs really took off in 2024, and I expect usage to continue to grow this year, but maybe not at the same rate. That could put some pressure on certain grocery sales, and many of our clients are adjusting to meet GLP-1 users’ new consumption patterns,” Peacock said.

How? Many consumers who take GLP-1 drugs report eating lesser amounts of food, more often. That creates opportunities for smaller package sizes and healthy snacks designed for consumption on the run.

Beyond GLP-1s, the broader trend toward wellness products continues apace. Shoppers today are looking at wellness as a necessity versus a luxury in categories stretching from personal care items to food and beverage. “They’re looking for portion control, protein and energy and all types of better-for-you snacks,” Peacock said.  

Convenience is king

With a growing number of Americans purchasing food away from home — or food they don’t purchase from a grocer to prepare at home — brands and retailers are homing in on convenience.

Smaller pack sizes, grab-and-go, heat-and-eat and other products that reduce complexity for consumers are on the rise in response.

“With the advent and ease of ordering food to be delivered today, CPG companies and retailers have to find more ways to leverage convenience,” Peacock said.

Larger pack sizes also are popular, driven again by convenience — shoppers can pick up a multipack of their favorite product and not have to visit the store as frequently.

Value shopping still strong

Consumer shopping behavior in 2024 was laser-focused on value, and that isn’t expected to change this year. “Strong holiday results underpin that consumers are willing and able to spend, but driven by a search for value,” Peacock said. “We had the highest e-commerce spending in history, and much of that was concentrated around the biggest promotional periods, which indicates consumers were seeking deals and promotions.”

With inflation abating, will that trend continue?

“This is likely a tale of different consumer groups,” Peacock said. “While many consumers will benefit from improving economic conditions, I expect lower-income consumers may continue to feel pressure.”

Even so, he said, “it’s not just low-income consumers. You go to an Aldi today, and you’ll see a lot of Mercedes-Benzes. People are trying to be more thoughtful about how they shop and where they buy certain items.”  

That means brands and retailers need a plan that meets multiple consumer needs, with innovation, differentiation and value all getting ample attention and focus.