Saturday, July 9, 2016

Invasion of the bottle snatchers

From 2011 to 2015 large CPG companies lost nearly three percentage points of market share in America, according to a joint study by the Boston Consulting Group and IRI, a consultancy and data provider, respectively. In emerging markets local competitors are a growing headache for multinational giants. NestlĂ©, the world’s biggest food company, has missed its target of 5-6% sales growth for three years running.

For a time, size gave CPG companies a staggering advantage. Centralising decisions and consolidating manufacturing helped firms expand margins. Deep pockets meant companies could spend millions on a flashy television advertisement, then see sales rise. Firms distributed goods to a vast network of stores, paying for prominent placement on shelves.

Yet these advantages are not what they once were.

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