Insights / Perspectives

Packaging in a K-Shaped Economy: How CPG Brands Can Win at Both Ends of the Spectrum

Understanding the K-Shaped Economy

The term K-shaped economy was first coined in 2020 to describe the uneven economic recovery following the pandemic. It speaks to the division and widening wealth gap between higher-income and lower-income consumers, and over the past several years it has evolved from a theory to a concrete reality.

At the top of the “K,” wealthier consumers benefit from rising asset values, stable employment, and investment growth, which allows them to continue spending freely. At the bottom of the K, lower-income consumers face persistent inflation, stagnant wages, and mounting debt, forcing compromises and trade-offs in everyday spending.

The divide is striking: the top 10% of American earners now account for roughly half of all consumer spending (Yahoo Finance), underscoring how concentrated purchasing power has become.

The disparities within the K-shaped economy have profound implications for consumer packaged goods (CPG) brands. Cost-conscious consumers are tightening budgets across nearly every category, including areas that traditionally perform well during downturns. Even so-called “everyday luxuries” like cosmetics, personal care, and alcoholic beverages are seeing softness as shoppers reassess discretionary spending.

Meanwhile, affluent consumers remain confident spenders, but with heightened expectations. Premium brands must continue to justify higher price points by clearly demonstrating quality, efficacy, and value.

Lower-priced brands on the other hand must appeal to aspirational consumers who still want quality and credibility. Many consumers are simultaneously cutting back in some categories while splurging in others—making packaging cues even more critical. Packaging can help brands appeal to consumers on both ends of the K.

Packaging partners can help brands right-size formats or develop premium structures without full product reinvention.

Premiumization: Increasing Value Without Raising Price

For consumers in the top half of the K who continue to spend freely, premiumization remains a powerful growth lever—but success depends on increasing perceived value rather than price. Packaging plays a critical role here. Added functionality, enhanced benefits, proven efficacy, and clean or sustainably sourced ingredients all need to be clearly communicated on shelf and online.

Bespoke packaging designs that cannot be easily copied—or “duped”—help reinforce brand differentiation and justify a premium positioning. Luxe materials, elevated finishes, and thoughtful structural design signal quality, while clean, minimalist aesthetics often suggest efficacy, transparency, and modernity. Packaging can serve as an indicator of reliability and performance, driving brand loyalty among high-income consumers.

Experiential: Packaging that Goes Beyond Product Protection

Across income levels—and especially among younger generations—consumers increasingly prioritize experiences over products. A GlobalData survey found that people are “willing to pay more for products that satisfy them on a more experiential level,” a trend that is amplified by the rising influence of social media and growing importance of digital engagement.

Packaging can help create the elevated experiences that today’s consumers demand. Custom pack forms, unique unboxing experiences, and multi-sensory elements such as texture, sound, or scent transform packaging from functional to experiential. Influencer kits, limited editions, and interactive packaging—like QR codes and augmented reality labels—encourage social sharing and can extend a brand’s reach far beyond the point of purchase.

Right-Sizing: Creating Accessibility Through Cost-Efficient Pack Sizes

Right-sizing is one of the most practical ways brands can serve both ends of the K. Smaller pack sizes lower the barrier to entry, offering affordability, trial, and accessibility for budget-constrained shoppers.

For example, Coca-Cola is rolling out its 7.5 oz mini format as a single-serve option in convenience stores to meet demand for lower price points without compromising brand equity.

Conversely, larger pack sizes deliver value through better per-unit pricing, appealing to heavy users and consumers willing to make the upfront investment. The continued rise of alcoholic beverage sales in club stores and the growth of large refill pouches in beauty and home care illustrate how “bulk” packaging appeals to consumers seeking value.

Berlin Packaging's Mini Mania

Looking Ahead

The K-shaped economy is no longer a short-term theory—it’s a structural reality shaping consumer behavior. For CPG brands, winning in this environment requires thoughtful strategies for product innovation, messaging, and package design.

Whether targeting consumers at the top or bottom of the K, packaging must do more than protect the product inside. It must communicate value, reinforce a strong brand positioning, create special experiences, and align with consumers’ budget priorities.

• Invest in premium cues where margins allow
• Use pack sizes strategically to maintain accessibility
• Build shareable, experiential packaging moments
• Communicate value clearly on shelf and online

With access to over 50,000 packaging components, custom design capabilities, sustainability services, and more, Berlin Packaging is perfectly positioned to help brands across every CPG category find impactful and effective packaging solutions that appeal to consumers in the K-shaped economy.

By: Moira Stein
Date: February 3, 2026