November 26, 2025 – Innova Market Insights follows global megatrends that impact the future for CPG innovation around the world. The subject of this blog, economic and political volatility, is one megatrend evaluated by Innova. Another global megatrends, building a sustainable future, captures government, industry, and consumer concerns about climate change and planetary health. All parties feel the impact of sustainable efforts on the economy, food security, and health. Another global megatrend is continued technological disruption, which is changing global economies, social structures, and lifestyles. Technological disruption also can help solve key issues and challenges. Demographic and social shifts such as age distribution and rates in fertility can affect economics, as well as approaches to marketing. Also, social factors are leading to changes in household structures. The last of five global megatrends is a focus on health and wellbeing. Because of rising healthcare prices, consumers are being more proactive about their health and wellbeing and new technologies drive consumers from corrective health to preventive health.
Global Economic Growth is Quiet
The forecast for global economic growth over the next few years is for subdued growth. Experts predict that growth between the years 2020 and 2027 will be the slowest since growth in the 1960s. The current political and economic climates are volatile. However, experts do not expect a global recession. Trade policies are uncertain and that poses a risk to economic growth. The future effects of tariffs are not yet known. Other risks to global economic growth are ongoing conflicts, shocks from climate change, and the aftermath from the global pandemic. Developing and emerging countries are especially vulnerable to conflicts and climate change because they have less of a financial cushion. Innova Market Insights expects technology, agritech, healthcare, and ecommerce to continue to grow regardless of economic threats. AI advances will help support growth. Globally, the greatest opportunity is in emerging and developing markets.
Wealth and Income are Unequal
Inequalities pertaining to wealth and income around the world are a threat to societies in developing countries and in developed countries. These inequalities, along with issues around corruption in governments and corporations, create tensions societally and economically, and they feed unrest. Consumers are becoming polarized politically. Global megatrends show that consumers are concerned about unaffordable cost of living and shortage of affordable housing. This is a source of financial pressure especially on younger generations and on lower-income consumer groups.
CPG Companies Face Challenges
Factors such as economic uncertainty, a trading environment that is increasingly complex, and supply chain risks will force CPG companies to be highly flexible and adaptable in all parts of their business, including strategies for products and options for sourcing materials. Countries and regions could develop new trading relationships. On top of that, CPG companies around the world need to appeal to consumers who are price-conscious while also reaching higher income consumers with value-added options. Also, it is hard to know how tariffs have impacted global trading and inflation for consumers.
Climate Change Creates Economic Shocks
Global megatrends reveal that climate change is causing stress on economies. This is especially true in countries with emerging markets or developing markets. Conflicts are causing problems with supply chain sourcing and supply chain pricing in climate-related products such as energy, and this is another point of stress.
AI Will Help Enable Growth
Looking toward future market growth, Innova predicts that AI will be a major factor that enables growth. Other factors enabling growth are ecommerce, healthcare, and agritech. India is the fastest-growing economy in the world. As such, companies that want to expand into new regions and markets could look toward India for the future.
What’s Next Regarding Economic and Political Volatility?
Several factors contributing to economic and political volatility need to be examined. The first is the challenging environment. Economic growth is slow and the trading environment is uncertain. Businesses will face challenges with investment decisions and business planning. Factors that will place pressure on companies include inequalities around income and wealth, concerns about and impact of corruption, and social injustice. Another consideration is how to offer value to consumers who are under financial pressure.
Supply chain factors will create pressures on companies globally. They will have to build supply chains that are resilient and can withstand uncertainty around and impact of tariffs, changes in trade policies, and the impact of climate change. In the agriculture sector, companies will need to source, invest in, and set prices for commodities that are affected by supply chain fluctuation. They may need to invest in other ingredients for those affected by climate, such as coffee and chocolate.
Processes need to become more efficient and streamlined. AI has great potential to streamline businesses, make them more efficient, and cut costs. The risk is that AI could affect jobs and services, particularly jobs in industries with instability or with jobs for younger adults. The energy demand for AI in the future could help drive the more toward clean energy.
New markets will be explored in the future. Europe and the US are established and critical for the world’s economy. Opportunities for marketing and trade are promising in emerging markets. Companies and countries can foster new relationships for trade that address risks and position them for future growth.
This article is based on Innova’s Megatrends – Economic and Political Volatility – Global report. This report is available to purchase or with an Innova Reports subscription. Reach out to find out more.