How Consumer Brands Should Address Recessions

A counterintuitive survival guide based on WARC Research

Introduction

Recession presents a distinctive set of challenges for fast-moving consumer goods brands. Unlike other sectors that may experience abrupt shocks, FMCG businesses often face slower but sustained pressure as consumer behaviour shifts. Discretionary spending declines, repeat purchases for premium products weaken, and retailers respond with greater focus on price. These pressures create tension between short-term sales performance and the need to protect brand equity over the long term.

Recent developments in global trade policy, particularly the imposition of wide-ranging tariffs and retaliatory measures between major economies, have led analysts to sharply raise their expectations of a worldwide recession. Market volatility, higher inflation expectations, and falling consumer confidence have made this scenario increasingly likely. This environment presents familiar dilemmas and specific risks for FMCG marketers, particularly around pricing, media investment, and consumer trust.

Rather than responding reactively, brand owners and marketers need to adopt a considered and strategic approach. Historical evidence suggests that brands maintaining visibility and focusing on value creation tend to recover more strongly. Based on prior recessions, recent case studies, and current market signals, this article sets out the key principles FMCG marketers should follow to safeguard their brands during economic downturns.

The Economic Context

The prospect of a global recession has gained traction following the introduction of extensive trade tariffs, notably between the United States and China. These actions have disrupted supply chains, inflated input costs, and reduced visibility on future trade flows. Financial markets have responded with sharp declines, and major banks now forecast a higher probability of economic contraction. JPMorgan, for example, recently raised its recession risk assessment from 40% to 60%, citing both direct and knock-on effects of tariff escalation.

The economic backdrop is significant for FMCG firms because of the cumulative pressures it introduces. Rising raw materials and logistics costs are often difficult to pass on to consumers, especially in competitive or price-sensitive categories. At the same time, consumers themselves become more cautious. Spending shifts away from premium offerings towards value and private-label alternatives. Consumption volume may remain relatively stable, but value growth often stalls or reverses.

The current environment follows several years of compounding strain: pandemic-related disruptions, a European energy shock, and persistent inflation. While the catalysts of this recession differ, the implications for brand portfolios are consistent with past downturns. Retailers will likely push harder on pricing negotiations, while promotional intensity increases. Investment decisions will be more closely scrutinised, especially those tied to brand-building activities that do not deliver immediate returns.

Understanding this context is critical. It frames the operating environment and helps marketers assess which historical patterns may repeat and which may not. It also underscores the importance of scenario planning and disciplined investment choices, particularly for businesses reliant on sustained consumer trust and retail presence.

Consumer and Business Impact

A recession typically affects FMCG businesses through shifts in consumer spending, changes in purchasing behaviour, and increased pressure on margins. Unlike discretionary sectors, FMCG consumption tends to remain stable in volume. However, the composition of that consumption can change substantially, with consumers trading down to cheaper alternatives, delaying non-essential purchases, or favouring promotions over full-price items.

This behaviour has direct implications for brands. Loyalty can weaken when price becomes a more prominent driver of choice. A brand's perceived value may have taken years to build, but it can erode quickly if not supported through consistent investment. Maintaining perceived differentiation becomes more difficult for products positioned at the premium end of the market as consumer priorities shift.

From a business perspective, recession also brings internal pressures. Marketing budgets are often among the first to face scrutiny. Teams are asked to deliver results with fewer resources, and performance metrics may skew towards short-term returns such as immediate sales uplift. Retailers, facing their pressures, may push for deeper discounts or better promotional support, further undermining brand value.

This creates tension between tactical and strategic objectives. On one hand, brands must continue to deliver volume and visibility in a challenging environment. On the other hand, decisions made purely for short-term gain can weaken future pricing power, erode equity, and make recovery more difficult once conditions improve. Managing this balance requires a clear understanding of what drives consumer behaviour during downturns and which levers are most effective for sustaining brand health.

Common Pitfalls in Recession Response

When faced with economic pressure, organisations often adopt defensive measures quickly. While some adjustments are necessary, an overly reactive approach usually leads to decisions that weaken the brand’s long-term position. Research from Bain & Company highlights several patterns that tend to repeat during recessions, particularly in the FMCG sector.

The most frequent misstep is indiscriminate cost-cutting. Marketing and innovation budgets are reduced without clearly assessing their strategic value. This can lead to brands going silent in the market, which risks immediate sales and longer-term brand salience. Once media presence is lost, it is costly and time-consuming to rebuild.

Another pitfall is shifting focus entirely to promotions. While tactical pricing support can help protect volume, excessive reliance on short-term deals trains consumers to buy only when discounts are offered. This undermines brand equity and makes it challenging to sustain margins once economic conditions stabilise.

Some businesses also attempt broad and untested strategic shifts in response to perceived threats. This might include abrupt changes in positioning, packaging, or product lines without a clear understanding of consumer sentiment. Consistency and clarity often matter more than radical change in times of uncertainty.

Avoiding these common responses requires a disciplined, data-led approach. Marketers must differentiate between essential cost control and actions that erode long-term competitiveness.

Strategic Marketing Priorities

Strategic marketing decisions become more critical, not less so, during periods of economic downturn. While pressures on cost and performance are inevitable, a selective and evidence-based approach can help protect brand value and maintain competitiveness. Several areas warrant particular focus.

First, maintaining advertising investment is essential wherever possible. A substantial body of evidence shows that brands that continue investing in media during recessions are more likely to recover quickly once conditions improve. While the nature of the messaging and media mix may need to change, withdrawing entirely risks loss of share of voice and visibility. The long-term costs of rebuilding awareness and brand strength often outweigh the short-term savings.

Second, the current environment will likely create more efficient media buying conditions. Periods of media cost deflation allow brands to gain greater exposure for the same spend. With fewer competitors active in the market, brands can increase their share of voice, reinforce mental availability, and build memory structures that persist beyond the downturn. This is particularly important in FMCG categories where purchase decisions are frequent and habit-driven.

Customer experience also becomes more critical during economic strain. While acquisition may slow, retention becomes a key driver of performance. Investing in better service, both in-store and online, can help strengthen relationships and reduce churn. Product availability improvements, messaging clarity, and customer support can yield meaningful returns. Consumers under financial pressure are more likely to reward brands that make life easier or deliver on their promises.

Another area requiring balance is the use of promotions. While temporary price cuts can stimulate demand, overuse can damage perceived value and reduce pricing power in the longer term. Research has consistently shown that brands with more substantial equity are better able to maintain margins even during downturns. Maintaining pricing discipline, while offering clear and relevant value to consumers, is more sustainable than aggressive discounting.

Emotional relevance can also differentiate a brand when rational factors dominate purchasing decisions. Campaigns that connect with consumers’ lives and concerns are more likely to be remembered and trusted. A helpful case here is the Philadelphia cream cheese campaign in the United Kingdom, which used behavioural science to build emotional affinity and drive value sales during the post-pandemic recovery period. It is a reminder that resonance matters even in categories not typically associated with emotional branding.

Lastly, consistency in brand positioning is essential. Changes in tone or message that feel opportunistic or poorly timed can undermine credibility. Instead, marketers should revisit and reinforce the brand's core strengths, adapting their communication to reflect current consumer realities without departing from long-established brand assets.

The overall goal in this environment should be to remain present, helpful, and distinctive. Brands that achieve this are better positioned to retain consumer trust, protect price, and emerge stronger once economic conditions stabilise.

Building the Business Case Internally

Internal alignment is one of the more immediate challenges for FMCG marketers during a recession. As cost pressures increase across the business, marketing expenditures often come under review. Marketers must build a credible and commercially grounded case to protect the investment needed for brand support.

This starts with clearly articulating how marketing contributes to core business outcomes. Rather than framing marketing spend in abstract terms, it should be linked to measurable performance indicators such as maintaining market share, protecting volume in key retail channels, or supporting price resilience. Demonstrating how past marketing activities have directly influenced these outcomes can strengthen the argument.

It is also helpful to frame decisions in relative terms. Reducing media spending in a deflationary market, for instance, may save money but at the cost of lost share of voice and weaker recovery prospects. In contrast, maintaining or modestly increasing spending can deliver disproportionate gains if competitors retreat. This message tends to resonate more effectively with finance teams and senior leadership.

Finally, marketers should be prepared to prioritise and sequence their activity. Not all campaigns or platforms will deliver equal value. A clear rationale for focusing on specific touchpoints or consumer segments can show discipline and responsiveness to current conditions while supporting the brand’s longer-term strategy.

In Conclusion

Recession places FMCG brands in a challenging but not unfamiliar position. Declining consumer confidence, retailer pressure, and internal budget constraints challenge even well-established businesses. However, history shows that brands which continue to invest with discipline, focus on value rather than price, and maintain emotional relevance tend to recover more strongly.

The decisions made during this period—about where to cut, where to hold, and where to invest—will shape brand strength well beyond the downturn. Marketers have a central role in guiding these choices, defending budgets and ensuring activity remains aligned with commercial priorities. By maintaining visibility, reinforcing trust, and offering genuine utility, brands can navigate the immediate pressures while preserving the equity needed for long-term growth.