The shelf is the new battleground: what McKinsey’s home and hygiene outlook means for CPG commercial teams

An Aforza point of view on McKinsey’s “Freshening up: A new winning formula for home and hygiene players”

For most of the past five years, home and hygiene brands have grown the easy way. Inflation lifted prices, prices lifted revenue, and revenue lifted forecasts.

McKinsey’s latest analysis confirms what most commercial leaders already suspect: that playbook is now closed. Volume growth has flattened, pricing power has narrowed, and total category growth has settled back to roughly 2 to 3 percent a year.

🔗 McKinsey & Company – Freshening up: A new winning formula for home and hygiene players

The interesting part of the McKinsey piece is not the diagnosis. It is the shift in where growth is now being captured. Established brands made up nearly three-fifths of category volume between 2019 and 2024, but they accounted for less than half of total growth. Private brands and insurgents took the rest. And the five biggest US retailers, Walmart, Amazon, Costco, Dollar General and Target, now control more than half of industry sales and are using that leverage to demand more from the brands they stock. The shelf has become a more crowded, more contested, more conditional place.

Reference: McKinsey & Company – Private brands have led growth above their share

Why are private brands and retailers winning the growth?

The first challenge facing incumbents is that the unit of competition has changed. For decades, brand teams competed on category positioning. McKinsey’s data shows consumers are no longer buying that way. They blend categories around emotional need states (a fresh-feeling home, a moment of indulgence, a sense of luxury) and they reach across traditional shelves to assemble the answer. A brand that wins only inside its historical category boundary is increasingly winning a smaller game.

The second challenge is that retailers have raised the bar without raising the rewards. Seventy-eight percent of major US retailer merchants in McKinsey’s survey expect to expand private brand shelf space over the next two to three years. Eighty percent are actively looking to add independent, innovative brands to their assortments. Translation: the shelf is being rebuilt, and the criteria for keeping a slot are tougher than they were five years ago. Price-pack architecture must be tailored by retailer. Packaging and in-store presence must do the work that paid media used to do. Retail media investment has moved from a tactical line item to a strategic negotiation. Each of these is a discipline that requires far more granular commercial execution than most CPG operating models were built for.

The third challenge is internal. Most commercial teams cannot answer, with confidence, which retailers are growing their categories, which trade investments are actually delivering volume, and where their field execution is genuinely landing the brand promise the marketing team paid for. The data exists. It sits in a dozen disconnected systems. By the time it is reconciled into a slide, the trading window has closed.

What does winning the shelf actually require?

The reframe is this. In a market where category growth is structural at 2 to 3 percent and retailers are tightening their assortments, the difference between a brand that holds shelf space and a brand that loses it is no longer a function of marketing spend. It is a function of commercial execution.

Reference: McKinsey & Company – In home and hygiene, the reward for top-line growth is increasing over time

That sounds operational, and it is, but it has strategic consequences. A commercial operating model built for the inflation era, where price increases papered over execution gaps, will not survive in the era McKinsey describes. The brands that win the next wave of shelf space will be the ones that can show up to a Walmart or Tesco line review with a tailored pack architecture, evidence of in-store execution at the store-cluster level, a retail media plan that integrates with the wider shopper marketing strategy, and a measured promotional ROI that holds up under finance scrutiny. They will be the brands whose field teams audit a hundred stores in a day rather than ten, whose trade marketers can rebuild a promotional plan in a week rather than a quarter, and whose commercial leadership can see, in one place, what is working across markets.

This is what genuine commercial execution looks like. It is not a campaign. It is the daily, weekly, monthly rhythm of the commercial organisation, supported by tools that connect what marketing planned, what trade negotiated, what the field executed, and what the retailer actually saw on shelf.

Reasons to believe

This is the territory Aforza was built for. CPG companies running on Aforza are seeing the kind of execution gains that translate directly into the capabilities McKinsey is describing. AG Barr is using Aforza to bring discipline to its route to market. Asahi, Lee Kum Kee, Sumol+Compal, and Super Bock Group are running their commercial teams on a single Salesforce-native platform that connects retail execution, trade promotion management, and distributor data into one operating picture. Field reps are typically 50 percent more productive in every store visit. Ava, our vertical AI for CPG, takes the manual load off the activities that used to soak up commercial bandwidth: store audits, deduction reconciliation, promotional analysis.

None of this is about technology for its own sake. It is about giving commercial teams the operating capability to compete in the market McKinsey is describing, where shelf space is conditional, retailers are demanding, and the margin for execution error is shrinking.

This is where Aforza has done something no other CPG platform has. The Ava Library is the industry’s first packaged library of agentic AI use cases purpose-built for consumer goods. Not a toolkit. Not a set of APIs waiting for a systems integrator to assemble. A living library of pre-built agents that already know how to review a store visit for perfect store compliance, validate a retailer deduction against the originating trade promotion, surface the next best action for a key account, draft a promotional plan from post-event ROI, reconcile distributor sell-out data, and dozens of other jobs that sit at the heart of the CPG commercial day.

🔗 You can download a copy of the Ava Library here

This matters because it directly addresses the common barriers identified as blocking AI adoption in CPG. Security concerns recede because every agent in the Library runs inside the customer’s existing Salesforce platform, on infrastructure their CIO has already approved. The expertise gap closes because the agents are pre-built for CPG use cases; commercial teams consume them, they don’t build them. And the ROI question answers itself when every agent is tied to a specific commercial job with a measurable outcome attached.

Call to action

McKinsey’s closing recommendation to home and hygiene leaders is to disaggregate performance, get granular on the consumer, and prove value at the shelf. That is the right list. The question worth sitting with is whether your current commercial operating model, the systems, the data flows, the reporting rhythm, the field execution standards, can deliver against it. If the honest answer is “not yet”, that is the place to start. We are happy to compare notes with any commercial leader thinking through this, and to share what we are seeing across the CPG companies already rebuilding for it.