Growth is becoming increasingly difficult for consumer packaged goods (CPG) companies
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
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.
Notes to editors:
For media enquiries, please contact:
Christina Bridge, KPMG Corporate Communications
*KPMG Organic Growth Barometer - Methodology:
• The 2017 edition of the KPMG Organic Growth Barometer tracked performance from 2011 -2016 on a five-year compound annual growth rate (CAGR) basis, alongside 2015 to 2016 year-on-year organic growth comparisons.
• The KPMG Consumer Packaged Goods Organic Growth Barometer is a database that tracks the organic revenue growth of 50 of the largest CPG companies listed on the US and European stock exchanges. It is based on externally reported data.
• Organic growth is defined as the percentage year-on-year changes in revenue at a constant foreign exchange rate, excluding the impact of acquisitions and divestments from one year to the next. Only data for the 50 largest companies quoting organic growth in 2016 is published in this barometer.
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 13,500 partners and staff. The UK firm recorded a revenue of £2.07 billion in the year ended 30 September 2016. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 152 countries and has 189,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.