CHICAGO — NielsenIQ has released The New Growth Frontier report. This new analysis, produced in collaboration with Kearney, reveals that artificial intelligence is reshaping how consumer packaged goods (CPG) brands innovate and compete—with profound effects on innovation, product discovery, and consumer path to purchase.
Over the past three years, established niche brands increased US market share by 1.5 percentage points (2022–2025), while large and mid-size national brands declined by 2.1 percentage points, according to NIQ retail measurement data across all categories.
This data signals a structural shift: Scale remains powerful, but scale is no longer destiny. Competitive advantage increasingly depends on agility, precision, and the ability to surface effectively in AI-mediated discovery environments.
“We are entering a precision era in CPG,” said Marta Cyhan-Bowles, chief communications officer and global head of Marketing, NIQ. “The growth levers that larger brands have come to rely on—like mergers and acquisitions—are no longer reliable paths to sustainable, long-term growth. Consumer-led innovation and agentic discoverability now matter more than historical scale. The winners will be those who combine AI-driven speed with deep consumer understanding, agentic systems proficiency, and disciplined measurement.”
AI Is Equalizing Opportunity Across the Industry
AI is democratizing capabilities that once required significant investment—from concept testing and formulation optimization to creative iteration and scenario modelling. Challenger brands are leveraging these tools to boost their historical strengths: moving more quickly, leading digitally, and leaning into meaningful consumer trends. NIQ data shows emerging brands are winning in categories where AI-led innovation and discovery are accelerating, such as Pet Care, Personal Care, and Health & Wellness.
At the same time, consumer behavior is shifting rapidly. NIQ research shows:
- 74% of shoppers are using AI for some form of product discovery
- 54% use AI for research
- 20% use AI directly for shopping
As AI tools increasingly mediate research and purchase decisions, discoverability has become as important as distribution.
Agentic Commerce Is Reshaping Discovery
The analysis also highlights the rise of agentic commerce—retail and large-language model (LLM) environments where AI systems filter options, generate recommendations, and influence purchasing decisions.
AI assistants are increasingly embedded in retailer websites, search tools, and shopping platforms, changing how products are surfaced and ranked. In these environments, structured product attributes, contextual alignment, reviews, and trust signals play a growing role in determining visibility—with relevance to consumer goals ultimately influencing results.
“AI systems prioritize clarity and relevance,” said Katherine Black, Partner at Kearney. “Brands that ensure their products are legible to AI with structured data, defined need states, and credible signals are better positioned to surface in these new discovery pathways.”
Traditional Growth Levers Face New Pressure
As AI reshapes both innovation and discovery, traditional growth strategies are under pressure. Line extensions often redistribute share rather than expand categories, and acquisitions are becoming more complex in a market defined by shifting consumer expectations and AI-accelerated competition.
While M&A can complement innovation, it is no longer a reliable standalone path to durable growth. In an environment where discoverability and early traction determine success, brands must build relevance—not simply buy it.
Why It Matters
The convergence of AI-driven innovation and AI-mediated discovery is raising the bar across the CPG ecosystem:
- Large, established brands must modernize and refocus innovation pipelines to maintain momentum.
- Emerging brands can leverage AI to accelerate experimentation and trial.
- Retailers must adapt as AI integrations influence traffic, assortment, and monetization dynamics.
The analysis concludes that sustainable growth in the AI era will depend on:
- Grounding innovation in validated, unmet consumer needs
- Optimizing product content for AI-driven discovery
- Integrating AI strategically across ideation, testing, and activation
- Monitoring early launch signals and adjusting quickly
With operations spanning more than 90 countries and approximately $7.2 trillion (USD) in global consumer spend, NIQ combines structured retail data, behavioral intelligence, and advanced analytics to help brands align AI acceleration with real consumer demand.
The full analysis is available here.
