FMCG Forecast | Pressure Continues on FMCG's Growth Rat
According to Worldpanel, China's FMCG market will remain in a period of adjustment in 2026, with an estimated annual sales growth of 0.9%. (Please click here预测 | 2026年快速消费品市场增速持续承压 to view the Chinese version)
Supporting these forecasts, 2025 performance to date shows resilience but also signs of weakness. Year-to-date (YTD) to September 2025, total FMCG grew 1.5%, but the latest quarterly data reveals a more subdued picture: Q3 2025 value growth slowed sharply to just 0.7% compared with the same period in 2024. This deceleration highlights the growing caution in consumer spending, which is likely to weigh on performance into 2026.
Food remains the strongest driver of growth. It is projected to expand by 3.0% in 2026, underpinned by consumer demand for convenience, nutrition, and premiumization. Actuals support this outlook, with 3.4% YTD growth in 2025 and 4.4% in Q3—a sign of stable consumer reliance on staples even as overall spending slows.
The beverages segment excluding alcohol offers another example of slowing momentum. Forecasts show a 3.9% growth in 2026, still positive but down from 4.8% the year before. YTD 2025 growth of 4.9% suggests strong underlying demand, but the drop to just 1.7% in Q3 indicates cooling consumption and signals a tougher outlook ahead.
Alcohol, meanwhile, faces sharper headwinds. The category is predicted to decline by 0.6% in 2026. Actual performance illustrates this turning point: growth of 0.9% YTD in 2025 was overshadowed by a 4.2% contraction in Q3, reflecting consumer caution around discretionary spending and evolving preferences toward non-alcohol beverages.
Household care is showing stability, with forecasts of 2.5% growth in 2026. YTD growth reached 3.1%, though Q3 slowed to 1.7%, in line with the broader market deceleration. Personal care is recovering only slowly, with forecasts predicting a marginal -0.1% decline in 2026. While YTD 2025 growth stood at 1.1%, momentum stalled in Q3 with 0% growth, highlighting continued price sensitivity and high competition in the sector.
There is, however, still opportunities for growth. Demand in lower-tier cities is strengthening, supported by e-commerce and omnichannel retail penetration. Categories that emphasize health, functionality, and sustainability—such as plant-based foods, eco-friendly home care, and functional beverages—are gaining traction. Brands that innovate, premiumize, and align with evolving consumer lifestyles will be best positioned to capture growth pockets in an otherwise cautious market.
In summary, the slowdown in Q3 2025 provides a clear warning signal for 2026: growth will be harder won, with overall FMCG value forecast to rise less than 1%. Nevertheless, manufacturers and retailers who adapt quickly to consumer shifts and leverage digital and product innovation will find opportunities to succeed in this more complex environment.
Notes
Actual data from P10 2022 to P9 2025. Forecasted data from P10 2025 to P13 2026.
National Urban China (Key/A/B/C/D Cities)
Forecast Method EWLS Multiple Liner Regression at Individual Category Level with impact of 4 weekly Covid Cases in historical data (for P10 2022 to P1 2023)