FMCG and CPG negotiations are breaking down

3 min read posted on 30 January, 2026

Many teams still negotiate as if costs stay calm and pricing moves on a steady clock. That model worked in 2015. It fails in 2026.

Input costs now move in weeks. Retail pricing often moves in quarters. Retailers guard shelf prices and push back hard on increases. Shoppers switch to cheaper brands fast. Private label wins the basket with little friction.

So the old deal logic breaks. You ask for a price increase. The retailer asks for a concession. You trade moves until someone blinks. The agreement looks finished, but the market shifts again. Then the deal reopens.

Volatility is faster than pricing cycles

This gap creates real damage. Costs jump quickly, but pricing processes stay slow. The negotiation becomes a race against timing, not a discussion about value.

That delay forces more short-term compromises. It also makes contracts weaker the moment the market shifts.

Negotiations take longer and are less durable

Negotiations now stretch across more weeks and more stakeholders. Teams spend hours in calls, email chains, and approval loops.

Deals also lose durability. Terms that look acceptable in the moment often fail once costs shift again. Trust weakens, effort increases, and both sides end up repeating the same arguments with less patience each time.

Agreements fail under stress and margins erode

Volatility hits, and one side claims the other side “knew” what was coming. The tone shifts from trade to blame.

Margins disappear in small cuts. A 0.5 percent concession here. A funded promotion there. A delayed increase for 60 days. Add that across categories and accounts, and the year disappears.

Retail power shifts add more pressure

Retailer groups keep getting bigger. Private label quality keeps rising. Brand loyalty keeps weakening. That power shift shows up in every line review and every price discussion.

Negotiations now happen across fragmented channels

Pricing talks no longer sit in one room. They spread across portals, video calls, and long email threads.

Each channel strips context. People misread intent. Screenshots replace conversation. Trust becomes harder to hold.

Gen Z is changing negotiation expectations

Gen Z now fills many roles in sales ops, category, and procurement support. They expect clear reasons, fast replies, and direct language.

Old status games slow talks down. Vague claims trigger pushback. Authority needs explanation, not assumption.

Winners redesign deals around risk sharing

Price is one tool. It is not the whole deal.

Strong deals now include risk-sharing terms, clear review triggers, and market-based adjustment rules. A 5 percent cost move for two months should activate a defined reset.

Transparency matters. Share cost drivers that can be checked. Agree on timelines that work in real markets, not old cycles.

The real risk is a broken negotiation system

Volatility will stay. The bigger danger is a negotiation model that turns every cost move into conflict.

Companies that rebuild how they negotiate will protect margins and partnerships. Companies that cling to old habits will face constant breakdowns.

Take Action

If your commercial negotiations are starting to feel slower, harder, and less stable, it is time to redesign the way you negotiate. Contact us to discuss how risk-sharing deal structures and clearer negotiation processes can protect margins and strengthen retailer relationships in volatile markets.

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Our Negotiation Consulting services leverage a proven, successful methodology to deliver exceptional outcomes. We empower our clients either through direct support (consulting) or long-lasting capability development to achieve the best possible results in every negotiation.