• Spain and Italy continue to lead FMCG recovery in Europe, overtaking sluggish markets in Germany and France

• National brands fight back against private label dominance through innovation and strategic pricing

• Beverages and confectionery decline as health trends reshape choices

London, May 8, 2025 – Europe's FMCG market grew by 1.9% in value over the year, reaching €680 billion in the 12 months to December 2024. This was driven primarily by strong consumer demand for chilled, fresh, and ambient food categories, despite ongoing macroeconomic uncertainty and inflationary pressures, reveals Circana’s latest biannual Demand Signals report.

The biannual report, which analyses point-of-sale data from Europe's six largest grocery markets (France, UK, Germany, Italy, Spain, Netherlands), and tracks performance across over 230 FMCG categories and one million SKUs, indicates significant shifts in consumer spending, with a marked preference for essential and convenience-focused products. 

Notably, chilled and fresh food segments achieved strong performance, growing 2.2% in unit sales to 84.5Bn units, while ambient foods increased by 0.8% to 89.1Bn units, collectively adding €7.5 billion in absolute value growth year-on-year.

Despite some signs of growth, there’s a note of caution as FMCG faces renewed uncertainty following a promising recovery in 2024. While nearly one-third of categories shifted from decline to growth and another 28% continued to grow, increasing economic pressures could stall momentum. Shoppers are becoming more selective, spending more on essentials, which grew by 1.6%, while cutting back on non-essential items, which declined by the same margin, as they look to better manage their budgets.

Ananda Roy, SVP Thought Leadership Europe, Circana, commented: "The FMCG sector is demonstrating resilience in the face of continued economic turbulence. Consumers across Europe are prioritising value and convenience, prompting brands and retailers to rapidly adapt their product portfolios and promotional strategies."

Private labels, which previously surged amid inflationary pressures and reached nearly 47% of FMCG unit sales, some 143Bn units, now face increasing competition from national brands. Through targeted promotions, product innovation, and smaller pack sizes, brands have regained ground, reversing some private label gains observed over the past few years.

Roy added: "National brands are fighting back against private labels, offering consumers differentiated value through innovation, sustainability, and enhanced product experiences. Private labels must now recalibrate to sustain their growth trajectory."

Conscious consumers reshape spending amid inflation pressure

Shoppers today are looking for more than just a good deal, they want versatile products that fit their lifestyle and are better for the environment. In fact, 68% prefer products that can adapt to different needs and occasions. Physical availability is also key, as over half of shoppers will look for a product again on their next trip, but many won’t go out of their way if it’s not there. Just as important is the product experience as 64% of dissatisfied trialists say they wouldn’t buy the product again, highlighting how trust and quality are essential for long-term success.

Southern Europe leads FMCG value sales growth

Spain and Italy are leading FMCG value sales growth in Europe. Spain's market grew by 4.9%, reaching €99 billion in the 12 months to December 2024, driven by strong domestic demand and growth in chilled and fresh food categories (based on POS data). Italy rose 2.3% in value sales, driven by ambient food and drinks, while the UK grew moderately at 2% as convenience trends returned.

The 3-year compound annual growth rate (CAGR) in unit sales to December 2024 shows a decline in Germany (-0.5%), France, and the Netherlands (both -0.8%), reflecting ongoing economic uncertainty and low consumer confidence.

Health trends reshape choices as alcohol and confectionery sales drop

Alcohol unit sales dropped -1.5% vs year ago, while Drinks showed small growth at 0.1% as consumers shift to healthier choices. Confectionery and baby food unit sales also declined (–1.0% and –2.2%) due to health trends and post-pandemic demographics. (POS ending December 2024).

Non-edible FMCG categories are seeing a slow and uneven recovery, with only a few areas returning to growth. Beauty in Personal Care rose by 0.9% in unit sales, boosted by strong demand in the 13 weeks leading up to Christmas. Household grew by 0.6%, driven by increased sales of detergents and laundry aids. Growth was supported by new product launches and heavy promotional activity.

Private label strategies have become more nuanced, with shifts observed across various European markets. Spain and Germany maintained strong private label penetration (49% and 43% value share of market, respectively), though recent momentum has slowed. France experienced modest growth in private label share, whereas the UK and Italy stabilised, reflecting intensified competition from national brands.