If the financial year 2023-24 (FY24) was defined by optimism, recovery, and growth narratives, FY25 brought a necessary pause. Consumption slowed across several categories, especially discretionary ones. Premiumization began to lose momentum, cost structures tightened, and consumer behaviour became more uneven and harder to predict. The lesson from FY25 is that premiumization is not a straight line. It behaves more like a curve, rising when benefits are clearly articulated and pulling back when price value equations feel stretched.

For FY26, winning brands will rethink premiumization as episodic and contextual, supported by sharper benefit communication and more flexible pack and price ladders. Value first does not mean cheap, it means justifiable. Mid-premium fashion, gourmet food and beverage, white goods, and health supplements are among the segments where this recalibration is already underway. Direct-to-consumer (D2C) brands felt the pressure most acutely. Customer acquisition costs rose, discovery became increasingly paid, and dependence on performance marketing exposed fragile unit economics. Quick commerce created visibility but not always preference, while traditional retail struggled with footfall volatility. FY25 reinforced a critical truth: innovation is not about being new. It is about being relevant. The year rewarded brands that slowed down, listened more closely to consumers, and focused on fewer, better launches.

FY26 will favour insight-led innovation, sharper design-to-value thinking, and clearer articulation of benefits over sheer novelty. Leading companies used the year to optimize return-to-origin rates in D2C, localize packaging to reduce freight costs, and rationalize SKUs and warehouse networks to improve demand predictability. These moves directly influenced availability, pricing power, and service levels. Perhaps the most uncomfortable lesson of FY25 was how poorly legacy forecasting models performed in a volatile environment.

Rural demand failed to rebound as expected, festival spikes were uneven, consumption patterns became more hyper-local and micro seasonal than most planning systems could accommodate. Consumer durables, retail chains, agri-linked FMCG, and discretionary categories felt this mismatch most sharply. Static annual plans struggled to keep up with rapidly shifting demand signals. FY26 will demand a shift from lagging indicators to leading ones. More agile forecasting models that combine sell-through data, distributor intelligence, search behaviour, and micro market insights will become essential. Rolling scenarios will increasingly replace fixed annual plans.

This article is an Intellectual property of Entrepreneur's January 2026 Print edition.