Spending a week at CAGNY with lots to digest, we were struck by two competing forces in F&B businesses right now.

Some businesses are playing defence:  trimming portfolios, cutting costs, and holding onto what they have. Others are pushing forward, expanding their reach, and shaping entirely new consumption spaces.

What we heard on stage wasn’t new: efficiency, AI, consumer shifts, price sensitivity. But what wasn’t said was just as interesting. There were fewer bold statements about real category expansion. The emphasis was on faster cycles, AI-driven insights, and managing margin pressure. Growth, for many, felt like an act of optimisation rather than reinvention.

But 2025 is a pivotal year.

This will be the year that separates the businesses managing decline from those actively shaping the next era of consumption. Here are the five biggest truths leaders need to confront.

1. The Age of Easy Growth is Over

Pricing is no longer the easy lever it was. Many businesses have pushed price as far as they can go, and at CAGNY, it was clear that elasticity is kicking in. Consumers are trading down, private label is making a resurgence, and cost-cutting alone won’t drive long-term value.

General Mills CFO Kofi Bruce made this clear:

“We are fighting every day to return to the growth we know this business is capable of. But we are not seeing the same levels of pricing power as before, and we need to create new value for consumers.”

It’s a shift we’ve been seeing across industries. Pricing power is an outcome, not a strategy. Consumers will pay for what feels worth it. The winners will be those who redefine value in ways that feel tangible, not just premiumisation for the sake of margin expansion, but businesses that elevate an experience, solve a problem, or create new meaning.

2. Efficiency is Not a Strategy

Efficiency was the dominant theme across CAGNY presentations. Businesses talked about SKU rationalisation, AI-powered cost management, and streamlining supply chains.

These are good moves. But where is the energy going?

As we listened to the speakers, we kept thinking: efficiency feels decisive, but it’s not a growth strategy. If businesses only focus on cutting, they’ll optimise themselves into stagnation.

Hershey’s CEO Michele Buck articulated this balance well:

“Efficiency is critical, but we are investing for the long-term. We are looking at how we expand our reach—into new snacking occasions, into new consumer behaviours.”

We thought Hershey’s foray into salty snacks was a great example of stretching beyond the core rather than simply defending market share. Coca-Cola’s expansion into alcohol and energy shows another way businesses are moving beyond their traditional lanes.

But not everyone was as bold. Some businesses seemed content to shrink their way to profitability rather than stretch into new possibilities. And in a year where consumer behaviours are shifting so rapidly, that feels like a risk.

3. You Can’t Just Follow Demand; You Have to Shape It

One of the most hyped topics at CAGNY was AI, consumer data, and real-time insights. AI is becoming a critical tool for innovation, and several businesses (McCormick, Kraft Heinz and Hershey’s) spoke about how they’re using it to compress R&D timelines and optimise formulations.

But here’s our concern: if everyone is looking at the same data and reacting to the same signals, who is actually leading?

McCormick CEO Brendan Foley summed up the shift:

“AI is allowing us to move at an unprecedented speed, but speed alone isn’t enough. The question we ask ourselves is, ‘Are we just following trends, or are we setting them?’”

That’s the real challenge. Right now, CPG risks becoming a lagging indicator of consumer behaviour, optimising what’s already trending rather than shaping what’s next.

The businesses that win won’t just be faster at reacting; they will be the ones that reframe categories, create new consumption moments, and expand the consumer imagination.

4. Innovation is Stuck in the Middle

There was a lot of talk about “fewer, bigger, better” innovation. But where were the big swings?

Many businesses showcased incremental product extensions, new flavours, and packaging tweaks. That’s fine, but who is actually changing the game?

At CAGNY, Kraft Heinz CEO Carlos Abrams-Rivera put it bluntly:

“We have to stop treating innovation as a side project. It needs to be at the core of how we grow.”

We thought this was an important shift. Too often, businesses treat innovation as an add-on rather than a fundamental driver of growth.

The most successful examples weren’t just making incremental improvements but reframing the way people think about categories. Hershey’s move into salty snacks isn’t just another flavour extension—it’s a new way to play.

5. If You’re Not Expanding Your Category, You’re Shrinking

For years, we’ve challenged clients to ask: What business are you really in? CAGNY made it clear that the strongest businesses aren’t just refining their existing categories; they’re defining new ones.

Nestlé CEO Laurent Freixe reinforced this point:

“Our vision isn’t just to grow within existing categories; it’s to redefine what nutrition and health mean for consumers.”

This was echoed by PepsiCo CEO Ramon Laguarta:

“We’re not in the business of selling more of the same thing to the same people. We’re in the business of defining where the consumer is going next.”

The businesses leading this charge are expanding their remit:

• Coca-Cola is moving beyond soda into alcohol, hydration, and energy.
• Kraft Heinz is building a global “taste elevation” platform.
• Nestlé is reframing food as part of the health and longevity conversation.

If your strategy is just getting more people to buy what you already make, you are playing defence. The real opportunity is in creating new need states, new moments, and new ways for consumers to engage.

2025 will separate the Survivors from the Shapers

F&B is at an inflection point. Some businesses are playing it safe, managing decline, optimising what they have. Others are making moves that will define the next decade of consumption.

The strongest businesses will be those that:

• Create demand rather than just follow it
• Expand into new categories instead of defending the old
• Think beyond efficiency to drive real, consumer-facing value

At Butterfly, we believe the best ideas don’t just come from data; they come from thinking harder, feeling deeper, and moving bolder. If you’re ready to rethink what growth looks like, let’s talk.

Let’s make 2025 a year of creation, not contraction.