28 Mar 2026 Big Food’s reckoning: why global giants are restructuring
Big Food is entering a structural reset as pricing power collapses and consumer scrutiny rises….
For decades, the world’s largest packaged‑food companies have relied on a familiar formula: scale, brand power and the ability to nudge prices upward without losing shoppers.
That era is slipping away. The pressures building since the pandemic have now converged into something more structural, and the sector is being forced into a reset that few incumbents seem prepared for.
Unilever’s decision to explore the sale of its remaining food portfolio to McCormick is the clearest signal yet that the old conglomerate model no longer holds.
A company built on the marriage of margarine and soap is now unravelling itself, having already spun off ice cream and now preparing to exit pantry staples like Hellmann’s, Knorr and Marmite. What remains is a business focused on personal care and home care — categories where pricing power has proved more durable.
The broader packaged‑food sector has been on a downward slide since its 2023 peak. While the S&P 500 has surged, the index’s food cohort has shed roughly a third of its value.
The industry’s strong performance during the inflation spike — when brands pushed through price increases well above inflation — turned out to be a double‑edged sword. Those gains invited a wave of consumer backlash and opened the door for private‑label challengers.
In the US and Europe, retailers like Costco and Aldi have expanded aggressively, while nimble newcomers such as Goodles have captured meaningful share in categories once considered untouchable.
And there’s Kraft Heinz, who already struggling to modernise its portfolio, has been forced to rethink its own breakup plans as it tries to stabilise operations.
The macro environment is hardly offering relief. Geopolitical tensions, including the conflict with Iran, have reignited energy‑price volatility. Packaging costs, especially plastics, are expected to rise again.
After years of pushing shoppers to absorb higher prices, the industry is running out of room to manoeuvre.
Consumer behaviour cutting to cut to the heart of Big Food’s model
Interest in ultra‑processed foods has exploded, not in consumption, but in scrutiny.
What began as a niche academic debate has broken into the mainstream, fuelled by social media, high‑profile nutrition advocates and a steady drumbeat of new research.
Consumers are no longer just scanning labels for sugar or salt — they’re questioning the entire industrial logic behind additives, emulsifiers and engineered formulations. This shift is already influencing purchasing behaviour, with retailers reporting stronger growth in minimally processed and “cleaner” alternatives.
For Big Food, the reputational risk is significant: categories once considered safe havens, from breakfast cereals to ready meals, now sit under a cloud of suspicion.
Regulators are watching closely, and the momentum suggests that UPF scrutiny will become a defining pressure point for the industry over the next decade.
Search trends show a dramatic rise in public concern, amplified by high‑profile health advocates and policymakers. Several US states have already restricted the use of federal food vouchers for nutritionally weak products, and the UK has moved to curb junk‑food advertising.
These interventions are early signs of a regulatory climate that is becoming less tolerant of legacy formulations.
The impact of GLP-1 drugs
Another disruptive force is the rapid uptake of weight‑loss drugs such as Wegovy, Ozempic and Zepbound.
Early data suggests they could meaningfully reduce snack consumption over the next decade, with implications far beyond wealthy markets as drug generics begin to reach the global south — regions long viewed as growth engines for multinational food companies.
In response, the giants are scrambling to reposition. New CEOs are arriving across the sector, portfolios are being trimmed, and investment is flowing into “better‑for‑you” propositions, from Nestlé’s push into healthier frozen meals to Danone’s recent acquisition of Huel.
Yet the pace of change may not match the scale of the challenge.
In summary, Big Food is trying to reconcile its traditional, shelf-stable, high-volume business model with a modern consumer demand for fresh, healthy, and high-quality food, forcing them to re-package, reformulate, or completely rethink their product offerings.
The age of easy growth for Big Food is over. What comes next will depend on how quickly these companies can reinvent themselves for a world where value is no longer extracted through pricing power, but earned through relevance, trust and genuine nutritional progress.
Source: The Economist