Legacy US consumer brands are experiencing a decline in sales and relevance, with companies like Kraft Heinz, Conagra Brands, General Mills, JM Smucker, PepsiCo, and Colgate-Palmolive seeing flat or falling North American volumes. This trend has been exacerbated by an affordability crisis among consumers, particularly with rising fuel prices in 2026 due to the war in Iran, leading to a 2% year-over-year decline in sales for most months since February. The S&P consumer staples sub-index has gained only 14% since early 2023, while the S&P 500 has almost doubled, reflecting the struggles of these traditional companies.
These established brands are being squeezed from two sides: by cheaper private-label products offered by retailers and by new "insurgent brands" that appeal to consumers with healthier, tastier, or more modern options. Private-label products, historically less popular in the US compared to Europe, have gained over one percentage point in market share, now accounting for more than a quarter of total sales, driven by their lower prices and improved quality. Retailers like Walmart and Costco are investing in their own brands, with Walmart removing synthetic dyes from private-label foods and Costco offering premium Kirkland Signature products. NielsenIQ reports that two-thirds of Gen Z consumers believe private-label products are just as good as national brands.
New branded entrants, or "insurgent brands," are also capturing significant market share. While consumer product sales rose 2% last year, 100 tracked insurgent brands, such as Kodiak Cakes and Amylu Foods, captured 36% of that increase, despite their small overall market share. Unilever recently attributed disappointing US condiments results to growing competition from premium products like avocado oil. Despite these challenges, companies like Kraft Heinz are investing in their legacy brands, with CEO Steve Cahillane allocating $700 million to this effort, including over a third for marketing, exemplified by a deal with Walt Disney Co. to feature Heinz ketchup and Philadelphia cream cheese in Disney theme parks and on packaging.
However, for lower-income consumers, price remains the primary driver. Kraft macaroni and cheese costs $1 for a 7.25-ounce box on Walmart.com, while Walmart's equivalent Great Value product is just $0.64. This price disparity, coupled with the aggressive expansion of European discount chains like Aldi that predominantly stock own-label products, is changing the US retail landscape. Analysts note a clear divergence in consumer goods markets reflecting the growing wealth gap between affluent individuals and those struggling with inflation.
Despite the challenges, large consumer brands maintain advantages such as control over manufacturing and distribution, established retailer relationships, and substantial balance sheets that allow them to acquire smaller competitors or outspend them. PepsiCo, for instance, spent $3.2 billion on acquisitions including Siete Foods and Poppi. Insurgent brands also face risks, as seen with Celsius Holdings, whose shares fell by a quarter after Costco launched a competing Kirkland Signature energy drink at a significantly lower price.
