Bain & Company identified 120 insurgent consumer brands in 2025 that accounted for 39 percent of incremental category growth across CPG. The year before, that figure was 17 percent. In boxed macaroni and cheese alone, Goodles took 6 points of market share from Kraft in three years, entering a category long considered impossible to disrupt. The largest global CPG companies posted low single-digit revenue growth over the same period.
CPG challenger brands are not just launching products. They are taking share from incumbents across categories, and retail media is the mechanism that allows them to do it at speed.
Retail Media Is Reshaping CPG: How Challenger Brands Capture Growth
Most retail media networks operate under a fundamental tension. They function simultaneously as performance advertising platforms and as channels for absorbing pre-committed trade marketing budgets from incumbent brands. For CPG companies like Kraft Heinz and General Mills, retail media budgets are tied to annual retailer agreements. Spend follows relationships and contracts. Performance is secondary.
Approximately 62 percent of retail media budgets still originate from trade or shopper marketing allocations, according to Forrester. Only 38 percent represents incremental media investment, and that share concentrates on a small number of networks. The system was designed to manage existing supplier relationships, not to maximize advertising returns.
Challenger brands operate outside that system entirely. They have no trade commitments locking them into specific networks. They have no pre-negotiated spend minimums dictating where budgets go. Every dollar they allocate to retail media is a performance decision. That structural freedom is a competitive advantage most of them underestimate.
On Amazon, where trade constraints do not exist, the results are unambiguous. An Intelligence Node analysis of Amazon’s marketplace found that challenger brands (independents, emerging CPG companies) capture more growth than incumbent players in 16 of 18 major CPG categories. In health care and pet health, challengers hold over 80 percent of sales. Even in traditional strongholds like beverages and pet food, challenger share exceeds 40 percent.
Visibility on Amazon comes down to relevance, conversion rate, and advertising effectiveness. There are no joint business plans protecting shelf position. No pre-committed budgets guaranteeing placement. The brands that execute retail media with precision are the brands that win. And challengers, unburdened by trade obligations, are executing with more precision than their larger competitors.
Why Retail Media Network Fragmentation Favors CPG Challengers
There are roughly 70 retail media networks operating in the United States. Incumbent brands manage on average only four to six. The reason is structural: each network runs its own platform, its own taxonomy, its own auction mechanics, and its own reporting standards. Adding a network does not mean extending a campaign. It means building a new operational capability from scratch.
For CPG incumbents, this fragmentation compounds a problem they already have. Their budgets are pre-committed. Their teams are stretched across established networks. The remaining 60-plus networks represent inventory they cannot reach, even when the audiences are substantial and the competition is thin.
For challenger brands, those same networks represent open territory. Lower cost-per-click. Less competition for sponsored placements. Audiences that are actively shopping but underserved by advertising. The fragmentation that constrains incumbents creates pricing advantages for the brands agile enough to operate across multiple networks.
Consumer behavior reinforces this dynamic. Shoppers are actively seeking healthier, more sustainable, and more authentic alternatives to established products. Retail media helps them find those alternatives at the moment of purchase intent. The closed loop, connecting ad exposure directly to a transaction, gives challenger brands measurable proof that their advertising investment is generating returns. That proof is what funds the next wave of expansion.
How SKU-Level Retail Media Optimization Compounds Growth
The opportunity created by fragmentation only converts to growth when the execution is precise enough to capture it. Campaign-level management cannot do this. Retail media performance settles at the product level, where every SKU has different margins, different competitive dynamics, and different conversion patterns across every network.
Over 30 percent of keywords attached to individual SKUs generate zero revenue while continuing to consume budget. Beyond those, more than half of remaining keywords are inefficiently priced: either overbid and eroding margins, or underbid and failing to capture available demand. These are not edge cases. This is the standard condition of retail media campaigns managed at the aggregate level.
One organic snack brand experienced this directly. Distributed across Walmart, Whole Foods, and Instacart, the brand had campaigns running and results that looked acceptable. When they shifted to SKU-level optimization, managing each product individually on each network, ROAS doubled in under two months. A new product launch achieved 8.5x ROAS. The gains compounded network by network as learnings from one platform informed strategy on the next.
The difference was not budget. The brand did not spend more. The difference was operational precision applied at the level where retail media economics actually operate. Bids, keywords, and budgets aligned to the specific performance profile of each product on each network.
This is where cross-network learning becomes a multiplier. A keyword that converts efficiently for a specific SKU on Walmart contains information relevant to how that same product should be positioned on Instacart. Conversion patterns on Whole Foods can inform bidding strategy on Amazon. When optimization operates at the SKU level across networks, every data point compounds. Performance does not just improve linearly. It accelerates.
The Retail Media Execution Problem Worth Solving
The same network fragmentation that creates the opportunity for CPG challenger brands also creates the operational challenge that prevents most of them from fully capturing it. Each platform requires separate campaign setup, separate bid management, separate reporting reconciliation. For a lean team of two or three people responsible for strategy, execution, and stakeholder management across multiple networks, the math does not work manually.
Amazon proved that when the execution layer functions at the right level of precision, challenger brands win categories. The question for every other retail media network is whether the brand can operate with comparable precision at the same scale. Most cannot, because the operational infrastructure to do so did not exist until recently.
The CPG brands gaining share fastest have solved this as a systems problem. SKU-level decisioning centralized across networks. Learnings from Walmart informing Instacart strategy in real time. Budgets shifting dynamically by product and by platform based on measured performance, not pre-set allocations. The execution infrastructure itself becomes the competitive advantage.
Incumbent brands built their retail media around trade relationships. Challenger brands are building theirs around performance. As more retail media networks move toward auction-based, performance-driven allocation, the structural advantage shifts further toward the brands that treat every dollar as a media investment with a measurable return.
Capital markets have started to reflect this. In 2025, CPG staples returned approximately 3 percent compared with 16 percent for the broader market. The Grain-Based Foods Share Index declined for a third consecutive year. Several major food companies posted double-digit declines in share price.
Portfolio restructuring will not change the competitive mechanics of retail media. The CPG brands that will continue to gain share are the ones building the operational infrastructure to compete on performance across fragmented networks, at the SKU level, with precision that compounds over time. That is the growth model retail media rewards.
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