FMCG Q2 Results: Five Patterns That Matter

Speaker A: Fernando Fernandez called it Unilever's best quarterly volume performance since 2010. Ramon Laguarta in the same fortnight admitted the American consumer is worse than PepsiCo had anticipated. 2 of the biggest names in consumer goods reporting on the same quarter describing what sounds like two different planets. Welcome to FMCG Weekly. I'm Matilda. Over the past few days the industry's heavyweights have published their Q2 2026 numbers. Unilever, Nestle, Procter Gamble, Coca Cola, PepsiCo, Danone, Reckitt, L', Oreal, Mondelez and more. Read side by side, they answer one question that matters more than any Volume growth is back across the industry, but who is paying for it? The answer differs sharply from company to company and it will reshape how commercial teams spend their money for the rest of this year. Pattern number one the industry's growth engine has switched from price to volume and this quarter is the proof. Start with Unilever underlying sales growth of 5.8% in the second quarter and here is the composition. 5.5 points of that came from volume. Price contributed just 0.6% across the half. Three years ago those proportions were reversed. Management upgraded full year guidance to 4 to 6%. Coca Cola told the same story in beverages organic revenue up 6% but the striking number is global unit case volume up 5% with every segment growing. Trademark Coca Cola grew volume 5%, its strongest in 17 years outside the COVID recovery guidance raised Nestle is earlier in the same journey. Organic growth of 3.6% in the half with real internal growth improving to 1.8% in the second quarter. And CEO Philip Navertil now explicitly calls it a rig led growth strategy. Denone accelerated to 4.2% like for like in Q2 with volume mix at 1.9. Rekit hit 4.7% in Q2 with a balanced contribution from volume and price mix. Kimberly Clark opened the year with 4% organic growth that was entirely volume led and actually invested negative pricing to get there. The message is unambiguous. After three years in which FMCG revenue growth was mostly a pricing illusion, boards now score growth on its volume content. But hold one question in mind as we volume from where? And paid for by whom? Because not all of this volume is created equal. And we will come back to that. The global consumer has split in half and the dividing line runs roughly along the Atlantic. The American consumer is cracking. PepsiCo's North American beverage volume fell 4%, its food business was flat and LaGuarda was blunt. The consumer is worse than anticipated, driven mainly by petrol prices. With the Iran conflict pushing oil towards $110 a barrel, the average American pump price hit $4.56 a gallon in late May, a four year high. When fuel eats the household budget, a $4 bag of crisps becomes optional. Procter and Gamble confirmed it. Organic sales flat volume neutral visible trading down to cheaper alternatives now flip the map. Emerging markets are carrying the industry. Rekkeker's emerging markets grew 9.4%, like for like in Q2 with China on its 12th consecutive quarter of double digit growth. Nestle's emerging markets, excluding China grew 7.1%. Unilever's home care grew 7.6%, led by India and Brazil. And Coca Cola's volume was led by India, China and Brazil. Europe sits uncomfortably in between. Rekket's European revenue declined 3% in the half and Nestle's developed markets managed 2.3%. Mostly price not collapsing like America, but price vigilant and promotion dependent. The implication for trade investment is stark. The same promotional playbook cannot serve a squeezed American, a cautious European and a buoyant Indian consumer. Yet in many organizations it still does. Pattern number three. And for revenue management professionals, this is the case study of the quarter Price cuts on their own do not buy back volume Rewind to February. Under pressure from weak demand and activist Investor Elliott Management, PepsiCo cut prices by up to 15% on some of the most famous snack brands on earth. The theory was prices rose too far during inflation. Shoppers walked away. So lower the prices and they will come back. The verdict arrived in July. North American food volume flat. North American organic revenue down half a percent. The company itself conceded that Americans did not stock up on snacks despite the cuts and now guides to only a gradual improvement for the rest of the year. Think about what that means economically. PepsiCo gave up margin on every single bag it was already going to sell in exchange for essentially no incremental demand. The revenue foregone on existing buyers vastly exceeded any value from new ones. In source of business terms, the investment subsidized the existing baseline rather than creating new demand. It is the same mechanism that quietly destroys promotional budgets every week, executed here at national scale and reported in a quarterly filing for everyone to see. To be fair to PepsiCo, the picture is not uniformly bleak. Globally, its organic volume growth is running at its strongest rate since 2022, helped by affordability packs and portfolio work in international markets, which makes the American result even more telling. The same affordability logic that works for an aspirational shopper in India does nothing for a fuel squeeze chopper in Ohio. And the contrast with Coca Cola which led with demand creation rather than price and delivered 5% volume with 2 points of positive price mix is instructive. The lesson is not that price never matters, it is that price moves without a demand side reason. Mostly transfer money to shoppers who had already decided to buy. Before cutting you, you need to know which volume is genuinely winnable and which is already yours. Pattern number four and this is the heart of the episode. The volume recovery is real everywhere but the funding mechanism splits the industry into three tiers. The context first input costs are rising again. Oil around $110 on the Iran conflict. Coffee and cocoa still elevated. Co Colgate quantified an incremental $300 million headwind and cut its gross margin guidance. Reckitt modeled a 130 to 150 million pound hit at sustained $110 oil. Yet almost nobody is pricing for it the way they did in 2022. So who pays for the largest group productivity does. Nestle's fuel for growth has delivered 1.7 billion francs1 towards a 3 billion target. Funding a rise in advertising to 8.9% of sales while its margin dipped only slightly. Reckitt runs a program with exactly the same name, keeping fixed costs flat While lifting brand investment 70 basis points though its operating margin still gave up a hundred. Unilever completed its 800 million euro program early and held margin while volume surged. PepsiCo is elevating automation and simplification to fund its affordability reset. Call this tier the productivity funded recovery. It works, but the strain is visible in gross margins. The second tier is the exception club and it matters because it defines what good looks like. Coca Cola grew volume 5% while expanding comparable operating margin by 90 basis points. L' Oreal reporting overnight delivered 6.5% adjusted like for like. Growth in the half from both volume and value, expanded gross and operating margins and still raised brand investment 70 basis points. These two are not buying volume back. Brand strength mix and channel execution are self funding the growth and the third tier is the warning case. ECD grew volume 1.4% but price mix turned negative at minus 1.1 and margin fell 30 basis points. Volume up, value down. That is what recovering volume faster than value looks like on a P and L and it is the trap the whole industry is trying to avoid. One refinement before the break in the pricing is not dead. Unilever explicitly expects second half growth to be led by pricing and as commodity costs flow through and Nestle and Reckitt point the same way. The pricing era is ending as the default growth engine, but pricing is returning as a selective cost justified tool. That distinction is where revenue management earns its keep in the next two quarters. Two final patterns briefly first, the FIFA World cup has been the demand event of the quarter and for once the effect is measurable. Coca Cola activated in over 180 markets and 20 million retail outlets, generated 60 billion digital impressions and collected 25 million first party data records crediting the campaign for part of that 5% trademark. Coke Growth and Powerade's 8 Unilever linked its Q2 acceleration in personal care to World cup activations. But here's the how much of that event recruited Volume sticks. A great activation quarter only creates value if the new shoppers stay distribution, quality holds and equity rises. Separating genuine recruitment from phasing is the discipline that turns a World cup spike into a source of business. Second, the giants are shrinking to grow. Unilever is combining foods with McCormick to become a pure home and personal care player. Nestle is moving waters into a joint venture. Reckitt has divested Essential home. Danone keeps bolting on health assets like Huel. Focus is the new scale. So who is paying for FMCG's volume recovery? Mostly productivity programs. Sometimes as at Essiti, the priceline itself and occasionally as at Coca Cola and l'. Oreal. Nobody because the brands are strong enough to self fund. The consumer world runs at two speeds. America is the slow lane and price cuts without a demand strategy subsidize the past instead of buying the future. The quality of volume, not the quantity, is the new scoreboard. Watch this space AB, InBev and Heineken report their half year results in the coming days and we will see whether beer tells the same story. FMCG Weekly is brought to you by acurus. Com. I'm Matilda. Thank you for listening and see you next week.