Passage
who <FI>were<Fi> once not a people, and <FI>are<Fi> now the people of God; who had not found kindness, and now have found kindness.
1 Peter 2:10 (YLT)
Nearby Context
1 Peter 2:8 and a stone of stumbling and a rock of offence--who are stumbling at the word, being unbelieving, --to which also they were set;
1 Peter 2:9 and ye <FI>are<Fi> a choice race, a royal priesthood, a holy nation, a people acquired, that the excellences ye may shew forth of Him who out of darkness did call you to His wondrous light;
1 Peter 2:10 who <FI>were<Fi> once not a people, and <FI>are<Fi> now the people of God; who had not found kindness, and now have found kindness.
1 Peter 2:11 Beloved, I call upon <FI>you<Fi> , as strangers and sojourners, to keep from the fleshly desires, that war against the soul,
1 Peter 2:12 having your behaviour among the nations right, that in that which they speak against you as evil-doers, of the good works having beheld, they may glorify God in a day of inspection.
Study Lenses
The verse centers on "once", "people", "found", and "kindness". It is saying that the verse draws attention to "once" and "people", so its meaning should be read from those terms before moving to application.
The nearby context moves from verse 9's "and ye FI are Fi a choice..." into verse 11's "Beloved I call upon FI you Fi...", so "once" and "people" belong inside that flow. In 1 Peter context, the local focus is hope in suffering, holy conduct, submission, and grace.
A plain takeaway is to answer the verse's own emphasis on "once" and "people" with trust shaped by these words, not by a vague optimism outside the passage.