Welcome to this week’s Food Exec Brief, a roundup of the most important news shaping food and beverage manufacturing, from tech innovation to regulatory shifts to market trends.
Key takeaways:
- 🤖 AI and innovation: AI disrupts food R&D with IFT’s CoDeveloper platform and accelerated development timelines, as major CPGs line up for trend-prediction tools.
- 📈 Market dynamics: Private label growth outpaces national brands 4:1 in H1 2025, forcing food giants into major portfolio reshuffles and strategic pivots.
- ⚖️ Regulatory: FDA streamlines food standards by revoking 52 “obsolete” regulations across dairy, baked goods, and canned products to cut red tape.
- 💰 Cost pressures: Hershey announces double-digit price increases amid “unprecedented” cocoa costs, while consumers enter “spending recession” on food.
🤖 AI, automation, and technology
AI is transforming food innovation from experimental to essential as companies race to accelerate R&D and predict consumer trends.
Nestlé leverages AI for nutrient-dense reformulation
Nestlé announced its focus on nutrient density-based reformulation using its proprietary Nutritional Profiling System to rank foods according to nutritional value and set reformulation targets. The company is converting sugars to prebiotic fibers and identifying high-quality proteins while localizing reformulation targets to meet specific market needs across different regions.
AI revolutionizes food R&D with accelerated timelines
The Institute of Food Technologists launched CoDeveloper, its first AI-driven product development platform featuring “Sous,” an AI assistant that uses IFT’s extensive database of peer-reviewed research. Early beta users report significantly reduced development cycle timelines, enabling more innovation through R&D pipelines. The platform helps formulators create products, optimize nutritional claims, and solve formulation challenges as old R&D timelines no longer fit current market demands.
Major CPGs embrace AI trend-prediction tools
Food executives from major CPG companies lined up at Tastewise’s booth during IFT FIRST 2025 to see demonstrations of trend-prediction tools. The AI platform examines “trillions of food signals” from social media, restaurant menus, and online reviews to uncover consumer preferences in real time, spotting trends like adaptogenic drinks and fusion flavors months before they become popular.
📈 Market dynamics and consumer trends
Private label dominance and consumer spending shifts force major strategic repositioning across the food industry.
Private label growth outpaces national brands dramatically
Store-brand sales surged nearly four times faster than national brands in the first half of 2025, with 86% of U.S. shoppers switching to private label products for at least some regularly purchased items. This shift is driving major food companies toward acquisitions, bankruptcies, and spinoffs as they strategize to regain market share.
Consumers enter “spending recession” for food items
RBC Capital Markets reports consumers have been in a “spending recession” for several quarters, with savings rates below pre-COVID averages and growing household debt. Shoppers are increasingly using “buy now, pay later” for groceries while turning to mass retailers, dollar stores, and private label-focused concepts like Trader Joe’s for value.
Nestlé beats growth forecasts despite sales decline
Nestlé reported 2.9% organic growth in H1 2025, beating analyst expectations of 2.8%, though total sales fell 1.8% to CHF 44.2 billion due to pricing actions. The company increased confectionery prices by 10.6% and coffee by 6%, while focusing on Greater China expansion and premium positioning in vitamins and supplements.
⚖️ Regulatory and policy
FDA streamlines regulations while manufacturers navigate an evolving compliance landscape.
FDA revokes 52 “obsolete” food standards to cut red tape
The FDA revoked or proposed to revoke 52 unnecessary standards covering dairy, baked goods, fish products, and canned fruit/vegetables as part of a federal review of over 250 food standards. The move aims to increase clarity for consumers and reduce regulatory burden for manufacturers, targeting products with little to no market presence or redundant regulations.
💰 Cost pressures and pricing
Unprecedented ingredient cost inflation forces major pricing adjustments across the industry.
Hershey announces double-digit price increases
Hershey confirmed “low double-digit” price increases across its confection portfolio due to “unprecedented” cocoa costs, affecting brands including Reese’s, KitKat, and Hershey’s Kisses. The price changes, taking effect in about 90 days, reflect both higher list prices and package size adjustments as cocoa futures remain significantly above historical averages despite declining from December peaks.
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