Circana has published its latest biannual FMCG Demand Signals study of the main consumer buying trends across the six largest grocery markets in Europe (across 230 CPG categories with 2,000 product segments).
The analysis reveals a complex recovery phase as unit sales increased by 0.3%, despite sluggish demand in key Northern European markets. The FMCG sector grew by 4.4% over the year to the end of June, reaching a value of €673bn.
Circana’s research found that FMCG growth across EMEA markets is being driven by strong performances in Spain and Italy, where domestic consumption and a favourable investment climate are accelerating the recovery. Conversely, the UK, Germany, and France continue to experience slower recoveries, impacted by economic volatility and tactical retailer actions that are contributing to a patchwork recovery across the region.
“While Southern Europe has shown resilience, the overall market recovery is uneven,” said Ananda Roy, Global SVP, Strategic Growth Insights, Circana. “Spain and Italy are showing significant momentum, but the UK, France, and Germany remain laggards.”
Category-wise, growth is largely driven by private label (+0.6%), which now hold a value share of 39.2% (worth €263bn), up 0.5 percentage points on 2023 figures. Across the continent, Circana notes that private label strength continues to reshape competitive dynamics, with opportunities for growth for traditional brands still evident. Edible and non-edible categories alike are feeling the impact as retailers innovate, improve quality, and emphasise sustainability and availability, which are core to private label transformation.
While private label momentum is expected to slow in 2025, Circana’s analysis suggests that brands can remain competitive by focusing on innovation at scale and optimising their range and assortment beyond promotions. Strategic collaborations, limited editions, category growth, and premiumisation offer avenues for brands to reinforce their value proposition. The study highlights that there are strong growth prospects for brands that can leverage these strategies, especially in adjacencies and emerging premium segments.
Meanwhile, competition remains intense across channels, but supermarkets and hypermarkets continue to dominate grocery sales, capturing 71% of the market. However, Circana notes that hypermarkets are struggling to adapt to changing consumer preferences, resulting in uniformly declining discretionary sales across channels. Convenience stores and discounters are continuing to be favourable destinations for essentials.
Looking ahead, Circana’s forecast for 2025 suggests that sustained growth in FMCG will face challenges as high prices, volatility, and uneven demand weigh on sustainable unit and volume growth. Macroeconomic factors continue to exert pressure, driven by geopolitical instability, volatile commodity prices, high interest rates, and wage growth. “The business environment remains highly constrained,” said Roy.
“A balance of macroeconomic factors is introducing new risks that continue to challenge the FMCG sector. Value sales are expected to be largely inflation-driven, as volume sales remain sluggish due to factors such as rising unemployment risks, more conscious consumption, and constrained affordability. While demand in EMEA’s edible categories shows signs of recovery, significant volatility across key growth drivers leaves doubt over the sustainability of the momentum into 2025. The soft recovery in the food and beverage sector highlights the challenges the FMCG industry faces in achieving long-term growth amidst ongoing uncertainty.”
NAM Implications:
- Whilst the recoveries in Spain and Italy are encouraging..,
- …issues with the German and French economic recoveries are more serious in terms of driving overall EU growth.
- The continuing problems of access to cheap energy supplies for Germany…
- …and the war in Ukraine will continue to be a drain.
- This has to add impetus to switching from brands to own label equivalents….
- …and from mults to discounters.
