Still, what once felt like isolated market shifts are now increasingly expected as “business as usual.” Long-shifting consumer behaviors, the converging digital and physical grocery shopping experience, shrinking brand teams, and AI are all changing how brands plan, promote, and protect profitability.
This article dives into these four trends and their impact on trade and deductions in 2026 and beyond. Buckle up – and expect nothing less than another crazy ride in CPG!
Shifting consumer behaviors have been percolating for years – resulting in a polarized shelf. The middle of the market is shrinking. Consumers are increasingly divided into two groups: value seekers gravitating toward private label, and premium buyers willing to pay more for products that align with lifestyle, identity, or perceived health benefits.
NielsenIQ’s 2026 outlook predicts continued growth in private label loyalty, especially for essential goods. At the same time, segments such as better-for-you snacks, Asian-origin cuisine, and men’s grooming continue to see premium growth.
Brands can no longer afford a generic promotional strategy. Promotions must be tailored to either deeply discounted value tiers or to create premium experiences that reinforce brand positioning. Attempting to serve both ends of the market with the same plan will dilute effectiveness.
On the deductions side, heavy discounting and broader promotions often trigger more deductions – many of which go unverified. As volume increases on the value side, brands must ensure deduction processes are tightly managed to protect margin.
While CPG adoption of AI is accelerating – surveys show most CPGs now use AI in at least one function – this adoption does not extend beyond its most common use cases, nor does it include complex, commercial back-office workflows like trade management and deductions.
In 2026, AI will not fundamentally change how most brands run trade, manage deductions, or make commercial decisions – for good reason. These are all highly cross-functional, data-fragmented, and exception-heavy functions. Data quality, reconciliation, and organizational trust remain key concerns – and instead of eliminating these challenges, AI only magnifies their importance. Despite increasing hype surrounding new AI tools promising full automation in these areas, it’s simply too early to state the true impact.
While AI won’t necessarily be front-and-center managing your trade spend for you in 2026, the right platforms and systems will create immediate value behind the scenes: improving data processing, strengthening controls, accelerating system development, and helping surface meaningful patterns and insights (assuming, of course, your trade management data infrastructure and foundation are sound).
At Promomash, we view AI as an enabling layer that boosts efficiency and quality – not a replacement for disciplined commercial systems or human judgment. When applied correctly, it helps us deliver clearer, more reliable insights to executives grounded in financial truth, not speculation. AI is the accelerator when the groundwork is done right – not the strategy itself.
Since COVID, grocery shopping has undergone a structural shift. What began as a necessity-driven surge in online grocery adoption has settled into a new, persistent omnichannel norm. Over 60% of U.S. households are now doing their grocery shopping digitally in some form, and three mega channels – Instacart, Walmart and Amazon – together are responsible for over 70% of those sales.
While all this is not a ‘new’ trend, the idea of employing tactics that shape demand and conversion from digital-to-store, and vice versa, is still a novel concept to many brands. Initiatives like Instacart’s retailer-owned storefronts, digital coupons, retail media, and AI-enabled smart carts aim to blur the line between physical and digital by influencing what shoppers see, consider, and buy whether they’re browsing at home or walking the aisle.
For FMCPG brands, digital grocery platforms are no longer secondary channels; they are core drivers of volume, visibility, and shopper behavior. As grocery shopping becomes omnichannel by default, trade promotion can no longer be managed in channel-specific silos.
The same promotional investment (e.g., a funded discount or media placement) affects multiple outcomes: online conversion, in-store lift, basket expansion, or brand switching. Trade systems must be able to connect spend, execution, and performance across all commerce touchpoints. Brands that cannot unify trade data across physical retail, digital commerce, and marketplaces risk misallocating spend and underestimating true promotional ROI.
When it comes to deductions, charges can now originate from multiple platforms, contracts, and data sources, often disconnected from the original trade plan. Without the proper systems in place to capture all deduction types, brands can face increased leakage, delayed resolution, and reduced confidence in their net sales and margin performance. Brands need systems that can classify and dispute deductions across all touchpoints and channels.
It’s increasingly clear that in 2026, CPG brand teams will be expected to do more with less. In 2025, major CPG companies such as Procter & Gamble and Nestlé announced significant layoffs as part of efforts to simplify operations and improve efficiency. Mid-sized brands faced a parallel but often more acute set of challenges. Bankruptcies, portfolio rationalization, margin compression, and retailer-driven SKU reductions forced many organizations to narrow their focus to core brands and initiatives.
While these moves improved financial discipline, they also left smaller teams responsible for maintaining performance across increasingly complex commercial environments. As a result, “doing more with less” has shifted from a temporary cost-saving mantra to a structural operating reality across CPG.
As teams shrink, trade functions are being asked to manage the same or greater levels of promotional complexity with fewer people. The difference in 2026 is that organizations no longer have the capacity to absorb inefficiencies through manual work, redundant checks, or post-event clean-up. This will fundamentally change trade teams’ expectations.
Success is no longer defined by whether a promotion executed as planned, but by whether it delivered profitable, incremental growth. Leaner teams are being pushed to prioritize fewer, higher-impact events, improve upfront planning discipline, and rely more heavily on data and automation to manage execution risk. In practice, this means trade teams must spend less time reconciling past promotions and more time preventing overfunding, misalignment, and execution errors before they reach the retailer.
The impact of shrinking teams is even more pronounced in deduction management. With fewer resources available, organizations can no longer afford to chase every deduction equally or tolerate long resolution cycles that delay cash recovery. Some teams may opt for a fully managed deduction management service like Promomash that leverages AI automation and humans-in-the-loop to increase recoveries and thereby generate a positive ROI.
In the absence of a fully managed service, deduction management in 2026 with a smaller team must shift its focus to prevention. In this model teams are expected to identify patterns by retailer, promotion type, and contract structure, and feed those insights back into trade planning and sales execution. The goal is not just to resolve deductions faster, but to reduce the number of invalid or avoidable deductions altogether.
The brands that stay ahead of these shifts in 2026 will be those that respond to volatility by working smarter, not harder – building resilience into how trade dollars are planned, executed, and protected. Across all four trends explored here, one theme is clear: complexity is increasing while capacity is shrinking. Success will depend on replacing fragmented processes and reactive workflows with systems and services designed for scale, speed, and accuracy.
For many brands, trade promotion and deduction management represent the most immediate opportunity for impact. These functions touch revenue, margin, cash flow, and retailer relationships – yet they remain some of the most manual and resource-intensive areas of the business. Leading organizations are addressing this by investing in modern trade management platforms that unify planning, accruals, execution, and performance analysis across channels. Others are augmenting lean internal teams with fully managed or hybrid deduction management services that combine automation with human expertise to improve recovery rates, shorten resolution cycles, and prevent repeat issues before they occur.
Ultimately, staying ahead in 2026 requires tighter integration across trade, finance, sales, and marketing – supported by shared data, clearer accountability, and tools that surface insight rather than noise. Brands that modernize their trade and deduction capabilities now – whether through advanced systems, managed services, or both – will gain the visibility and control needed to protect margin in an increasingly unforgiving environment. Those who prioritize clarity over complexity and prevention over cleanup won’t just weather the next wave of change…they’ll be positioned to lead through it.
Which of these trends resonate with your teams? Looking for solutions to keep your brand ahead of the game in 2026? Contact us and let’s talk about it.