Recession Is Coming for FMCG and Most Leaders Are Pretending It’s Not
John Elliott • June 20, 2025

If you're leading an FMCG or food manufacturing business right now, you're probably still talking about growth.

Your board might be chasing headcount approvals. Your marketing team’s pitching a new brand campaign. Your category team’s assuming spend will bounce.

But your customer?

They’ve already moved on. Quietly. Like they always do.


The illusion of resilience


FMCG has always felt protected, “essential” by nature. People still eat, wash, shop. It’s easy to assume downturns pass around us, not through us.


But this isn’t 2020. Recessions in 2025 won’t look like lockdowns. They’ll look like volume drops that no promo can fix. Shrinking margins on products that no longer carry their premium. Quiet shelf deletions you weren’t warned about.


The data’s already there. According to the Australian Bureau of Statistics, consumer spending is slowing in real terms, even as inflation eases. The Reserve Bank confirmed in May: household consumption remains subdued amid weak real income growth. And over 80% of Australians have cut back on discretionary food spending, according to Finder. They’re still shopping, just not like they used to.


A managing director at a national food manufacturer told me recently:


“We won a new product listing in April. By July, it was marked for deletion. The velocity wasn’t there, but neither was the shopper. We’d forecasted like 2022 never ended. Rookie mistake.”


That one stuck with me. Because I’ve heard it before, just in different words.


Growth thinking in a shrinking market


Despite clear headwinds, many FMCG companies are still chasing growth-centric hires, brand, commercial, sales.

But recessions don’t reward momentum. They reward discipline. They reward slowness. They reward the uncomfortable.

Miller Leith’s 2024 FMCG & Retail Insights Report showed less than 20% of employers are actively hiring in supply chain, finance, or transformation, the roles that stabilise companies in downturns. Commercial hiring still dominates.

KPMG’s Disruption Decoded report found 52% of private company leaders were “very concerned” about retaining critical talent, but only 27% had changed workforce strategy to reflect it (KPMG).

In short: everyone’s worried, but no one’s moving.


What retailers won’t tell you


Retailers look stable. Supermarkets are booking profit. But that strength? It’s downstream pain.

Small-to-mid-tier brands are being squeezed on funding, shelf terms, and promotional ROI. According to IRI, trade spend rose 9.7% YoY in 2024, and over 30% of promotions delivered negative ROI.

But it’s not just numbers. It’s about silence.
No one says: "You're about to lose that listing."
No one says: "We’re expanding private label next quarter."


You feel it only when it’s too late. Private label is climbing. Fast. In multiple categories. (IRI Trends). And when shoppers make that switch, they rarely return.


The truth no one wants to say aloud


If a recession hits in 2025, it won’t catch leaders off guard.

It’ll catch them mid-denial.

Because most boards are still clinging to growth assumptions like nothing’s changed. They’re approving spend like it’s 2022. Hiring for upside. Ignoring erosion.


One COO recently said: “Our board was still using 2021 volume baselines in April. I had to fight just to model in a negative scenario.”

That’s not prudence. That’s negligence.


What brave leadership looks like now


The best CEOs aren’t hopeful. They’re ready.

They’re planning for contraction. Not just the numbers, the sentiment.

They’re asking:

  • What if our #1 product goes backwards for two straight quarters?
  • What if our supplier folds?
  • What if our category dies, and no one wants to say it out loud?

They’re keeping talent who’ve lived through downturns. They’re protecting margin like it’s oxygen. They’re not waiting for perfect clarity. Just enough to move. Because this isn’t a quarter to watch. It’s a moment to act.




Final word


You don’t need a bigger forecast.

You need to decide whether you’re leading for the market you hope is coming, or the one your customer is already living in.

Because if you’re not planning for contraction, then someone else is.

And they’ll be the ones left standing.


A group of business people are walking in front of a city skyline.
By John Elliott July 18, 2025
Australia’s FMCG sector is confronting a leadership crisis. CEO turnover is accelerating, succession pipelines are underdeveloped.
By John Elliott June 26, 2025
You don’t hear about it on the nightly news. There’s no breaking story. No panic. No protests. Just rows of vegetables being pulled out of the ground with no plan to replant. Just farmers who no longer believe there’s a future for them here. Just quiet decisions — to sell, to walk away, to stop. And if you ask around the industry, they’ll tell you the same thing: It’s not just one bad season. It’s a slow death by a thousand margins. 1 in 3 growers are preparing to leaveIn September 2024, AUSVEG released a national sentiment report with a statistic that should have set off alarms in every capital city: 34% of Australian vegetable growers were considering exiting the industry in the next 12 months. Another one-third said they’d leave if offered a fair price for their farm. Source: AUSVEG Industry Sentiment Report 2024 (PDF) These aren’t abstract hypotheticals. These are real decisions, already in motion. For many, it’s not about profitability anymore, it’s about survival. This isn’t burnout. It’s entrapment. Behind the numbers are people whose entire identity is tied to a profession that no longer feeds them. Many are asset-rich but cash-poor. They own the land. But the land owns them back. Selling means walking away from decades of history. Staying means bleeding capital, month by month, in a system where working harder delivers less. Every year, input costs rise, fuel, fertiliser, compliance. But the farmgate price doesn’t move. Or worse, it drops. Retail World Magazine reports that even though national vegetable production increased 3% in 2023–24, the total farmgate value fell by $140 million. Growers produced more and earned less. That’s not a market. That’s a trap. What no one wants to say aloud The truth is this: many growers are only staying because they can’t leave. If you’re deep in debt, if your farm is tied to multi-generational ownership, if you’ve invested everything in equipment, infrastructure, or land access, walking away isn’t easy. It’s a last resort. So instead, you stay. You cut your hours. Delay maintenance. Avoid upgrades. Cancel the next round of planting. You wait for something to shift, interest rates, weather, prices and you pretend that waiting is strategy. According to the latest fruitnet.com survey, over 50% of vegetable growers say they’re financially worse off than a year ago. And nearly 40% expect conditions to deteriorate further. This isn’t about optimism or resilience. It’s about dignity and the quiet erosion of it. Supermarkets won’t save them, and they never planned to In the current model, supermarket pricing doesn’t reflect real-world farm economics. Retailers demand year-round consistency, aesthetic perfection, and lower prices. They don’t absorb rising input costs, they externalise them. They offer promotions funded not by their marketing budgets, but by the growers’ margins. Farmers take the risk. Retailers take the profit. And because the power imbalance is so deeply entrenched, there’s no real negotiation, just quiet coercion dressed up as "category planning." Let’s talk about what’s actually broken This isn’t just a market failure. It’s a policy failure. Australia’s horticulture system has been built on: Decades of deregulated wholesale markets Lack of collective bargaining power for growers Retailer consolidation that has created a virtual duopoly Export-focused incentives that bypass smaller domestic producers There’s no meaningful floor price for key produce lines. No national enforcement of fair dealing. No public database that links supermarket shelf price to farmgate return. Which means growers, like James, can be driven into loss-making supply contracts without ever seeing the true economics of their product downstream. But the real silence? It’s from consumers. Here’s what no one wants to admit: We say we care about “buying local.” We say we value the farmer’s role. We share those viral posts about strawberries going unsold or milk prices being unfair. And then we complain about a $4 lettuce. We opt for the cheapest bag of carrots. We walk past the "imperfect" produce bin. We frown at the cost of organic and click “Add to Cart” on whatever’s half price. We’re not just bystanders. We’re part of the equation. What happens when the growers go? At first, very little. Supermarkets will find substitutes. Importers will fill gaps. Large agribusinesses will expand into spaces vacated by smaller players. Prices will stay low, until they don’t. But over time, we’ll notice: Produce that travels further and lasts less. Fewer independent growers at farmer’s markets. Entire regions losing their growing identity. National food security becoming a campaign promise instead of a reality. And when the climate throws something serious at us, drought, flood, global supply shock, we’ll realise how little resilience we’ve preserved. So what do we do? We start by telling the truth. Australia is not food secure. Not if 1 in 3 growers are planning to exit. The market isn’t working. Not when prices rise at the shelf and fall at the farmgate. The solution isn’t scale. It’s fairness, visibility, and rebalancing power. That means: Mandating cost-reflective contracts between retailers and suppliers Enabling collective bargaining rights for growers Building transparent data systems linking production costs to consumer prices Introducing transition finance for smaller producers navigating reform and climate pressure And holding supermarkets publicly accountable for margin extraction But more than anything, it means recognising what we’re losing, before it's gone. Final word If you ate a vegetable today, it likely came from someone who’s considered giving up in the past year. Not because they don’t care. But because caring doesn’t pay. This isn’t about nostalgia. It’s about sovereignty, over what we eat, how we grow it, and who gets to stay in the system.  Because the next time you see rows of green stretching to the horizon, you might want to ask: How many of these fields are already planning their last harvest?