The inflation signal that should be on your desk right now
Food-at-home prices in the US rose 0.7 percent month on month and 2.9 percent year over year in April, according to an FMI briefing covered by Food Business News. That monthly jump compares with a 0.2 percent monthly dip in March, so the direction of travel reversed sharply. The Producer Price Index, which tracks costs upstream from the consumer, was more alarming still: food PPI grew 2.2 percent annually in April after a 1.6 percent increase in March, and total PPI surged 1.4 percent month on month in April, double the March rise. Industry experts at the FMI briefing warned that food-at-home price inflation could exceed 4 percent across all of 2026 as fuel costs tied to global conflicts ripple through supply chains.
The US is not an outlier. Across India, the picture is similar in direction if sharper in intensity. Fuel price hikes of around 3 rupees per litre on petrol and diesel have pushed Indian FMCG companies to signal price rises of 4 to 5 percent across daily essentials including soaps, biscuits and beverages in the next two to three months. Diesel moves roughly 70 percent of India's freight, so even a moderate per-litre increase can push transportation costs up by 5 to 10 percent, according to Ravin Saluja, director at Sterling Agro Industries, as reported by Business Today.
These are not abstract macro numbers. They translate directly into a set of painful commercial decisions that your pricing and promotion team is probably already arguing about.
Where brands are already moving on price
The Indian market offers a live read on how FMCG companies respond when input costs spike quickly. Godrej Consumer Products raised prices 4 to 7 percent across soaps, detergents, and household insecticides. Marico applied a 6 to 7 percent increase. Hindustan Unilever implemented a 2 to 5 percent hike. Amul raised fresh pouch milk prices by 2 rupees per litre, citing higher cattle feed, packaging film, and fuel costs.
Dabur has gone further. Global CEO Mohit Malhotra said the company has already implemented a 4 percent price hike across its business and expects around 10 percent inflation this fiscal year. Britannia Industries and Hindustan Unilever have both indicated in earnings calls that further hikes may follow if pressures persist.
The pattern here is important. Companies are not choosing between raising prices and other cost recovery options. They are doing both. Rather than implement steep price rises, companies may choose to cut package sizes, reduce promotional offers, or raise prices selectively across categories, according to Business Today's analysis of the Indian FMCG situation. That combination, partial price rises alongside quieter pack or promo changes, is exactly the territory where regulatory and shopper-trust risk concentrates.
The shrinkflation regulatory wall is getting higher
If you are considering pack-size architecture as a cost-recovery tool in EU or UK markets, the regulatory environment is moving against you. Prior coverage in this publication has noted that a German court ruled against Mondelez for undisclosed pack-size changes, and Scotland's HFSS promotion restrictions arrive in October 2026. Neither of those data points came from the current signal set, but they sit in direct context with the India picture: the cost pressures driving pack changes globally are real, and the regulatory tolerance for undisclosed changes is shrinking.
The EU Green Claims Directive and broader transparency expectations mean that any change to pack size that is not clearly communicated at shelf carries growing legal exposure. For commercial leaders building price-pack architecture plans right now, the practical answer is to separate the cost-recovery decision from the communication decision. If you shrink a pack, say so on the label, on shelf, and in your trade terms. The brands that have navigated shrinkflation best in recent cycles are those that treated transparency as a pricing feature rather than a compliance afterthought.
EDLP versus hi-lo: where the value battle is really being fought
Shoppers are not just trading down within a store. A meaningful share are switching stores entirely. Prior research covered in this publication found that 42 percent of US grocery shoppers plan to move to a cheaper store entirely, up from 31 percent last autumn. That number reframes the EDLP versus hi-lo debate. It is no longer just a promotional mechanics question. It is a channel-retention question.
EDLP formats, discounters, warehouse clubs, and hard-discount grocers, win when shoppers no longer trust that the promotional price at a hi-lo retailer represents real value. The more frequent and deeper the promotions a brand runs, the more it trains the shopper to believe the regular shelf price is fictional. That creates an opening for EDLP-positioned retailers to make a simple, credible claim: the price you see is the price you pay, every time.
For brands, the implication is that promo depth and frequency decisions are not just a P&L question. They actively influence which channel shoppers choose. Running a 30 percent depth promotion at a mid-market grocery chain every other week is a subsidy to the discounter down the road, because the shopper learns to expect the deal and eventually decides it is easier to go where the deal is built into the everyday price.
What strong brands are doing differently on price
Not every brand is trapped in the promo spiral. Kantar's latest BrandZ analysis identifies brands including Coca-Cola, Red Bull, Nido, and Michelob Ultra as outperforming through the current inflation period, gaining brand value and protecting pricing power rather than defending share through discounting.
According to Kantar BrandZ Director Ellie Thorpe, the brands that win at premium pricing combine three factors: they are seen as meaningfully different from competitors, they have emotional relevance to the shopper, and they sustain cultural presence over time. None of those factors are short-term promo mechanics. They are long-cycle brand investments that pay off precisely when cost pressure forces weaker brands into a discount spiral.
The plant-based category shows the other side of this story. US plant-based dollar sales fell 2 percent from 2024 to 2025 to reach $7.9 billion, marking the second consecutive annual decline, after a 4 percent drop the year before, according to The Good Food Institute's 2026 State of the Industry Report using SPINS data. Price remains one of the two biggest barriers to purchase, and the category has not yet found a pricing architecture that makes the value proposition credible against animal-based alternatives that have themselves been subject to significant price rises.
What to do before Q4 planning locks in
The pricing and promotion decisions you make in the next eight weeks will shape your Q4 position. A few concrete places to focus:
Audit your promo depth by SKU, not by category. Blanket depth targets set at category level hide enormous variation in which items are genuinely driving basket and which are just subsidising trial that does not repeat. Cut depth on low-repeat SKUs first.
Separate your list-price architecture from your promotional architecture. If you are raising list prices to recover input costs, do not simultaneously deepen promotions to protect volume. The two moves cancel each other out and signal price confusion to the shopper and to the buyer.
Treat pack-size changes as a communication event, not just an ops decision. Any change to grammage or unit count that is not clearly disclosed at shelf carries regulatory and trust risk that is growing in the EU and UK. Build the communication plan before the change goes live, not after.
Look at which of your SKUs are winning at EDLP retailers and why. The answer usually tells you something about which price points and pack formats are genuinely competitive without promotional support. That is where your everyday architecture should be anchored.
Use Kantar's brand equity data as a pricing signal. If your brand sits below a certain equity threshold, list-price increases without equity investment will accelerate trade-down. If it sits above, you have more room than your promo team is probably using.
The inflation environment in 2026 is not a temporary disruption that passes after one planning cycle. The supply-side signals from India and the US both point to sustained pressure through at least the end of the fiscal year. The brands that build a clean, transparent, defensible pricing architecture now will be in a structurally better position than those that rely on deeper promotions to hold volume through a cost squeeze that the promotions themselves are making worse.