RecorNews
Monthly Industry Dispatch
AI is moving fast, but grocery is still won by people.
Retailers are getting leaner, AI is moving from novelty to necessity, and Albertsons and Kroger are both resetting around the fundamentals. The brands that win will be the ones that adapt without losing the human relationships that still drive the business.
Happy Easter weekend, for those who celebrate. I personally lean more towards MLB Opening Day more this time of year. Go Yankees. Each hold a similar level of importance and religious affinity.
Albertsons and Kroger continue their reorgs, aiming to get lean and refocus on the basics of the business, each disclosing plans to close underperforming stores in 2026. They aren't alone, however. Grocery Outlet, Family Dollar, and Fresh Market are among other retailers trimming down their store count.
Greg Foran quickly made his presence known by way of a banana, and Albertsons and Susan Morris continue fighting for their $600m merger termination fee and replant a flag in Idaho. Beyond the world of Albertsons/Kroger, economic challenges, changes in government regulations, and developments in the world of AI dominated the headlines this month.
Regulatory Changes & Warning Labels
RFK Jr. and the MAHA movement continued their pursuit of new dietary guidelines, aiming to eliminate synthetic food dyes and establish new regulations targeting ultra-processed foods. In fact Texas, following California's lead, recently passed legislation requiring warning labels on foods containing synthetic additives, food dyes, and ultra-processed ingredients.
While this feels like a net-positive for the overall health and wellbeing of our nation, these changes are undoubtedly creating disruption for the CPG industry as a whole, particularly as brands navigate reformulation, labeling, and compliance challenges.
SNAP Changes Impacting Grocery
The USDA granted waivers to additional states to restrict SNAP purchases of processed foods and sweetened beverages, more than doubling the number of states with such restrictions. In 2025, SNAP made up about 8-10% of total US Grocery sales, while total SNAP spending fell from ~$118B in 2023 to ~$100B in 2025, the largest drop on record. This means ~$18B less flowing into grocery, and with changes to what qualifies under SNAP, categories containing sugary products and salty snacks are surely taking a hit.
Inflation & Rising Energy Costs
A recent study found the Trump tariff policies estimated to have totaled a combined $21B+ impact on consumer-facing business in 2025. Despite the Supreme Court striking down the tariffs, there is prolonged uncertainty across the industry. As if we don't have enough to worry about, ongoing geopolitical tensions in the Middle East have resulted in volatility in the energy and fertilizer markets, significantly impacting commodity and food production costs. Energy price volatility is further pressuring transportation and logistics costs across the food supply chain, layering on top of existing tariff-driven cost headwinds.
AI + CPG: From Novelty to Necessity
It’s almost impossible to go about your day without running into AI. Friends sending ridiculous AI-generated memes, dinner recipes powered by ChatGPT, and a parking lot full of half-baked business ideas sparked by a bottle of wine or two.
Just as quickly as AI showed up in our group chats and nightly routines, businesses and entire industries are already betting big, especially CPG.
A recent State of Supply Chain study found that AI has officially moved from “experimenting in the lab” to “running the operation.” Nearly 2/3 of retail and manufacturing leaders now say they have increased confidence in AI, with more than 40% saying they already use or are planning to use AI-driven tools for things like inventory optimization, supply planning, and logistics. And 71% say they intend to invest more over the next 3-5 years.
Industry leaders are already committing to investing more, and with the pace of advancement and the speed of adoption, AI is on track to become as common and as unavoidable as those group texts you wish you weren’t in.
And the demand is only expanding.
Consumers are becoming fluent in shopping via AI-chats, desperate for ways to stretch their dollar and find brands they love at prices they can afford.
Retailers are evolving pricing and promotional models with AI to capture a frantic, fragmented shopper, while delivering an ever-evolving definition of value. Even Costco, historically ad-resistant, rolled out new AI-driven capabilities to build and target online shoppers without the setup burden for advertisers.
Walmart recently pivoted from experimenting with ChatGPT to embedding the AI tool and others like Google's Gemini directly into their native app, already seeing huge improvement in conversions.
Companies like Newell Brands are using AI agents to systematically optimize product detail pages, driving conversion at a scale that manual methods simply can't match.
In today's CPG, brands and manufacturers who've been hit harder by tariffs and rising inflation than a one-two combo from Mike Tyson in his prime are increasingly incentivized to adopt AI. Not just to strip cost, but to optimize trade spend, better target consumers, and keep pace with retailer changes and rising go-to-market costs.
E-commerce leaders have introduced the concept of Generative Engine Optimization (GEO) as the next frontier of product discovery, as tools like ChatGPT, Gemini, and Claude increasingly replace traditional SEO as starting points for shopping journeys.
If there were ever a question about whether AI was going to matter in CPG, that question has been answered.
AI is no longer just a time-saver or a fun little tool Frank uses to help draft an awkward email. Sorry, Frank. Businesses are now investing in AI as a predictive engine for growth, and CPG advisors are urging brands to move past efficiency-only use cases. AI is quickly becoming the difference between reacting to the market and staying ahead of it. And in CPG, that gap is about to get painfully obvious.
The Albertsons Co.
Albertsons continues their restructuring under new CEO Susan Morris. Throughout the ongoing reset, we've seen several long-term individuals retire, shift roles or divisions, or leave the organization all together. Even an outsider joined the ranks. Welcome to Albertsons, Monica. Needless to say there's a lot of newness across the Albertsons org chart, with more changes likely to come.
“Center of Gravity”
CEO Susan Morris doubled down on Idaho as the Albertsons “center of gravity,” signaling renewed focus on the home state. Speaking at a Boise Metro Chamber event, Morris emphasized the company’s deep roots and ongoing commitment to local investment. Albertsons has announced plans to open 2-3 new stores in Idaho, along with continued store remodel investments, with ~20 stores having already received upgrades in the last five years. Albertsons is one of the largest employers in the state of Idaho with roughly 5,000 employees calling the Gem State home.
This comes as Albertsons continues to close stores and subsequently cut jobs across the country, announcing another round of store closures in 2026, mainly CA, TX, and DC. Closing underperforming stores is likely an effort to drive cost reductions and increase investments in automations, AI and technologies to help accelerate digital sales growth, up ~20% YoY.
The $600M Question
Albertsons filed a subpoena in March, requiring former Kroger CEO Rodney McMullen to testify in a Delaware Court about whether Kroger used "best efforts" to secure regulatory approval for the failed merger. The deposition, scheduled for April 8th and 9th, McMullen will be asked questions regarding his communications with regulators, divestiture strategies, and the selection of asset buyers during the merger process. Albertsons is seeking $600 million in termination fees plus additional legal relief.
AMC: AI Ads & Redefining ROI
The Albertsons Media Collective tested advertising in ChatGPT during a Valentine's Day campaign, allowing shoppers searching for Valentine's Day deals via the AI-chat app to see local Albertsons banner ads. Meanwhile, Vice President of Media & Measurement Liz Roche is advocating measurement consistency and standardized ROI methodology in retail media, a movement AMC has been the key driver behind for several years.
Looking forward
More personnel changes and the ongoing merger litigation only creates more distraction for both Albertsons and Kroger. Stack on new leadership, desk shifts, and process changes, CPG brands should be more proactive and diligent when pursuing opportunities with Albertsons. Morris' doubling down on "Nationally Great, Locally Strong" continues to iterate through the merchandising teams, as "Merch United" aims to bring the divisions closer to the corporate teams decision making process. More personnel changes are rumored to come, but the strategy seems set.
Kroger
Kroger kicked off the month by reporting Q4 and full-year 2025 results, with new frontman Greg Foran setting the tone on an operationally focused agenda for 2026. Alongside the renewed focus, the organization continues to see changes across the board: senior leadership retirements, category team restructures, along with a new front-end and KOMPASS review process for 2027. Bye-bye guaranteed reviews, hello needs-based submissions.
Heading into the new fiscal year, Kroger shared stable identical sales growth and e-commerce sales up 20%.
New Kroger, Who Dis?
During the update, CEO Foran outlined Kroger's early priorities, using bananas as a symbolic and practical lens to drive cultural transformation, sending a clear signal that the organization tends to refocus on the fundamentals after years of merger distraction. Improving operational execution, investing in fresh, and accelerating digital personalization and loyalty are among the priorities. 2026 guidance reflects continued investments in stores, technology, and associate experience as the foundation for long-term growth.
Ocado Pivot
Kroger continues to pivot its e-commerce fulfillment strategy away from Ocado-powered facilities towards a more store-based automation model, better leveraging Kroger's existing 2,800+ store footprint and dramatically reducing CapEx needs while unlocking faster scaling across more markets and geographies.
3-Tier Private Label Strategy
Kroger has leaned into their private label strategy, and it's working. The Own Brands portfolio continues to grow faster vs national brands in like categories, taking more share as inflation-worried shoppers seek value across all segments. The value, natural/organic, premium structure provides Kroger the ability to capture shoppers across income levels and need states.
KPM + YouTube Capabilities
Kroger Precision Marketing announced a major collaboration with Google's Display & Video 360 platform, enabling advertisers to use 84.51 data on YouTube for reporting on SKU-level conversion. Brands can now target specific shopper groups across YouTube's massive reach, including lapsed, new households, and known buyers, via KPM. Pretty wild stuff.
Looking forward
Kroger's transformation is real and happening right in front of our eyes. The moment Foran's name was rumored to be in the mix as the next CEO, the industry knew there would be a calling back to the fundamentals. Well that calling has turned into action, and vendors working with Kroger are forced to adapt or fall behind. Success in a new category review process will require proactivity, compelling insights and strong connectivity. Shifting desks and new names will reset relationships and pressure the fundamentals and good business practices. Kroger is walking the talk early in 2026 and I look forward to seeing how things play out.
The Bottom Line
With a quarter of the year behind us, the CPG industry is sending a clear signal: success going forward will require getting lean, focusing on the basics, and figuring out how to leverage AI to drive growth.
The pace of AI development in our industry is undeniably exciting, and it couldn't have come at a better time. When applied thoughtfully, AI has the potential to elevate the entire industry; consumers can more easily find products they love at prices they can afford, retailers can continue delivering value, personalization, and better shopping experiences, and brands can get closer to their consumers while continuing to innovate and bring great products to market.
But what AI should not do is replace the thing that's always made the CPG industry great: people.
It's the people — our relationships, our interactions, and the way we come together to solve complex problems. Let AI help in these endeavors, not replace.
Have a wonderful Easter weekend.
Cheers, Taylor
RecorNews & AI
AI is cool - and don't get me wrong, I use it. To help summarize articles, provide additional context, and - more often than I would like to admit - ask what the internal temperature of cooked salmon is. 145 degrees, FYI.
But I do not use AI to write RecorNews.
Because that would be lame.
