Growth is becoming increasingly difficult for consumer packaged goods (CPG) companies, those that keep it simple stand the best chance of bucking the trend according to the latest Organic Growth Barometer from KPMG UK.
KPMG’s 2017 Barometer found that the five-year growth rate fell to 3.4%, down from 4.2% last year. Moreover, the top performers have not outpaced the average as significantly as in previous years. In KPMG’s 2016 Barometer the top performers outpaced the average by 2%, this year they have outperformed the average by just 1%.
This year’s top performers tended to have three commonalities:
- They operate with a single brand and within a single category
- They fall into the category of ‘experiential brands’ – mainly within food and beverage
- They are working to build simple business models and operations
|Top performing CPG companies for organic growth||Year-on-year organic growth rate|
|The Estee Lauder Companies||7.2%|
|Lindt and Sprungli||6.0%|
|Remy Cointreau SA||4.7%|
|Davide Campari – Milano SpA||4.7%|
|The Coca-Cola Company||4.0%|
Commenting, Liz Claydon, head of consumer and retail, KPMG UK, said: “It’s clear that consumer goods companies have been finding it tougher to grow through increasing marketing spend or launching new products. As consumers feel the effects of squeezed real earnings, firms must meet their ever more demanding expectations whilst also embracing and adapting to technological disruption. They must do all this whilst standing firm against the abrasive headwinds of rising cost pressures. “In this increasingly complex environment it is interesting that companies leading the way in organic growth rates are focused on a single brand or a single category.”
To view the latest KPMG Organic Growth Barometer in full, click here.