NielsenIQ released a report Tuesday examining how artificial intelligence is affecting competition and product discovery in the consumer-packaged goods (CPG) industry.
The report, titled The New Growth Frontier, was produced in collaboration with consulting firm Kearney. It analyzes retail measurement data and consumer research to assess how AI tools are influencing innovation, brand performance and purchasing behavior.
According to NielsenIQ data covering all categories from 2022 to 2025, established niche brands increased U.S. market share by 1.5 percentage points over the past three years. Large and mid-size national brands declined by 2.1 percentage points during the same period.
The report characterizes the shift as structural, suggesting that scale alone is no longer sufficient to maintain market share. Instead, it points to agility, speed and the ability to appear prominently in AI-driven discovery platforms as growing competitive factors.
“We are entering a precision era in CPG,” Marta Cyhan-Bowles, chief communications officer and global head of marketing at NielsenIQ, said in a statement. She said traditional growth strategies such as mergers and acquisitions are becoming less reliable as standalone drivers of long-term growth.
The report said AI tools are lowering barriers for smaller and emerging brands by making capabilities such as concept testing, product formulation and marketing optimization more accessible. NielsenIQ data shows emerging brands gaining traction in categories including pet care, personal care and health and wellness.
Consumer behavior is also shifting, according to NielsenIQ research cited in the report. It found that 74% of shoppers use AI in some form for product discovery, 54% use it for research and 20% use it directly for shopping.
The analysis highlights the growth of what it calls “agentic commerce,” referring to retail and large-language model environments where AI systems filter products, generate recommendations and influence purchasing decisions.
AI assistants are increasingly integrated into retailer websites, search functions and shopping platforms, affecting how products are ranked and displayed. In those environments, factors such as structured product data, consumer reviews and other trust indicators can influence visibility.
“AI systems prioritize clarity and relevance,” Katherine Black, a partner at Kearney, said in a statement. She said brands that structure product information clearly and align with defined consumer needs may be better positioned to appear in AI-driven recommendations.
The report also says traditional growth tactics, including line extensions and acquisitions, face added pressure in a market shaped by AI-enabled competition and changing consumer expectations. While mergers and acquisitions can complement innovation, the analysis says they are less likely to ensure sustained growth on their own.
The report concludes that companies seeking long-term growth should focus on identifying unmet consumer needs, preparing product information for AI-driven discovery tools, integrating AI into product development and marketing processes and closely monitoring early performance indicators after launch.
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