Consumers are becoming more intentional in how they define value, balancing national and private-label purchases, seeking products that deliver health benefits and convenience, and opting for smaller portions, according to Circana. The trend is being fueled by forces ranging from GLP-1 adoption and demand for nutrient-dense foods to the growing use of AI-assisted shopping tools.
“Retail food and beverage dollar sales are still growing (+2.2% year to date), but volume remains essentially flat, indicating consumers are becoming more deliberate about what they buy rather than simply buying more,” explained Sally Lyons Wyatt, global EVP and chief advisor at Circana.
Private label and national brands must compete on value
While private label growth has subsided compared to previous inflationary years, the category “remains an important force in the market,” Wyatts said.
Private label food and beverage retail volume stands at roughly 24% of sales, and share gains have moderated in recent periods, according to Circana.
Where consumers are not trading down is for premium national brands, which “continue to show resilience,” Lyons Wyatts said.
Premium and super premium national brands that are priced at more than 25% compared to average prices increased share by 1 percentage point this year, according to Circana.
Within a low-volume-growth environment, brands should focus more on delivering value per purchase instead of depending on broad market expansion, Lyons Wyatt noted.
Promising areas including “compelling innovation, products that address wellness and functionality needs, premium offerings that deliver meaningful differentiation, optimized pack architectures and strong merchandising that reinforces value,” she said.
Ultimately, price is less of a barrier for consumers when a product’s innovation solves either a real need or provides an exceptional experience, she added.
“Looking to 2027, we expect a more balanced competitive environment where both private label and branded products can succeed by delivering clear value and differentiation,” she added.
GLP-1 adoption for weight management continues to shape shopping choices
Weight management has become the leading reason consumers use GLP-1 medications, increasing from 16% of users in 2021 to 53% in 2026, a shift that is driving demand for protein-rich, hydration-focused and nutrient-dense foods, according to Circana.
Popular categories among GLP-1 users include hydration beverages, protein-forward foods, sports and energy products, yogurt and yogurt drinks, cottage cheese, dried meat snacks and fresh product, among other nutrient-dense options, according to Circana.
“The broader theme is a shift toward products that help consumers maximize nutritional value while managing appetite and portion sizes,” Lyons Wyatt said.
AI-assisted shopping creates competition for brands to stay relevant
The growing influence on grocery from AI-assisted shopping adds another layer of competition for brands to show up as the sole answer.
Circana’s data shows 13% of consumers use AI as a tool for product discovery and search between April and May, compared to 9% in February.
“Among AI users, the most common activities are comparing products (52%), researching products (40%), reading review summaries (38%), and finding the best price (32%),” Lyons Wyatt detailed.
What’s in store for 2027
Circana expects the grocery industry to settle into a more typical 2% to 3% dollar growth range by 2027 – especially after nearly 7% annualized dollar growth between 2019 and 2024 was driven by pandemic disruptions and food inflation.
Circana said the biggest threats to its 2027 outlook include weakening consumer confidence, inflation pressures and changes in SNAP spending, while faster adoption of AI-powered shopping tools, continued e-commerce growth and a more stable economic environment could lift growth above the expected 2% to 3% range.
For brands, most of that growth will come from pricing and product mix rather than increased purchasing, signifying that consumers are buying roughly the same amount of food but making more selective choices about where they spend.
