An analysis of organic growth in top-ranking consumer packaged goods companies
Delivering sustainable organic growth remains a tough challenge for consumer packaged goods (CPG) companies. Consumers are becoming more informed and their demands are more sophisticated. Understanding their shopping preferences – what to buy, how they interact with brands, and what channels they use to browse and purchase products is vital. However; it’s difficult for businesses to get right. Our analysis shows that the median compound annual growth rate (CAGR) has decreased for CPG businesses from 4.2 percent to 3.4 percent, compared with the previous year.
Large established brands continue to face pressure from innovative start-ups. Smaller companies sometimes demonstrate greater agility, and can respond to changes in consumer needs more quickly. All the while, achieving cost reduction is also important, especially in light of Brexit. Organisations need to show top-line growth as well as strong profitability to keep shareholders happy.
The combination of these influences make growth in the consumer goods industry difficult to attain, but it’s not impossible. The KPMG Organic Growth Barometer shows that the top-performing CPG company achieved a median annual growth rate of 7.7 percent over the past six years. It also illustrates key trends in the market, themes for next year and organic growth strategies that work.
* The KPMG Organic Growth Barometer tracks the organic revenue growth of companies in the consumer packaged goods (CPG) industry. It provides organisations the opportunity to benchmark their performance against market averages and top quartile performers. Organic growth is defined as the percentage of changes in revenue, year-on-year, at a constant foreign exchange rate, excluding the impact of acquisitions and divestments.
To find out more download our KPMG Organic Growth Barometer report.