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Growth among consumer goods companies continues to slow

Growth among consumer goods companies continues to slow

Organic growth for consumer goods businesses decreased from 3% in 2016, to 2.5% in 2017. Luxury, premium products across food and beverage as well as beauty, are bucking the overall trend and 40% of consumer business CEO’s don’t think their business is adapting to disruption

Linda Ellett

Partner, UK Head of Consumer Markets, Leisure & Retail

KPMG in the UK


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Organic growth for consumer packaged goods (CPG) businesses is slowing, according to the latest analysis by KPMG in the UK. Perhaps not surprising given that in a separate KPMG survey of senior consumer-focussed executives globally, many said that they were struggling to adapt to the rapidly changing environment.

KPMG’s latest Organic Growth Barometer 2018 report found that over the past financial year, the median annual growth rate among CPG businesses has decreased from 3.0% in 2016, to 2.5% in 2017. The research also highlighted that the businesses bucking the trend were mainly offering luxury, premium products across food and beverage, as well as beauty.

Commenting on the findings, Linda Ellett, UK head of consumer markets at KPMG, said:

“Consumer businesses are having to grapple with multiple challenges at once, whether it is the emergence of new disruptive competitors; technological shifts which are redefining consumer behaviour and rising customer expectations, or the economic pressures squeezing margins. Against such a backdrop, it is perhaps unsurprising that growth has become harder to achieve, but the strongest performers, and their approach, offer the clues to unlocking growth. 

“Looking at the common themes among the strongest performers, it is clear that these businesses understand the impact that strong leadership; the right business environment, and experience of their employees and customers, has on sales growth. These businesses also make digital the lifeblood of their organisation, to create and deliver innovative consumer products and experiences that resonate with today’s consumers.”

In the global senior executive KPMG research – the Global Consumer Executive Top of Mind survey launched in association with the Consumer Goods Forum – 530 consumer-focussed senior executives were polled globally. It revealed that while 65% of CEOs believe their organisation fosters a culture of innovation and disruption, 40% believe they are not adapting successfully.

The poll also pointed to widespread agreement among CEOs that historical and current business models will not survive. Pointing to a significant industry reinvention, 58% of companies are developing new – or rethinking existing – business models.

Furthermore, 55% of respondents agreed that by 2020 physical stores that do not reinvent themselves will not survive, and 53% said that many stores existing today will close due to underperformance, as e-commerce and direct-to-consumer channel grow in prominence.

Commenting on the findings of KPMG’s Global Consumer Executive Top of Mind survey, Paul Martin, UK head of retail at KPMG, added:

“The UK has been awash with retailers struggling to remain relevant to increasingly fleeting customers, with this process heightened by the growing prominence of online retail and consumers buying directly from brands through their own distribution channels. We’re seeing clear winners and losers right now, and it’s vital that businesses position themselves firmly on the consumer’s radar.”


Notes to Editors:

For media enquiries, please contact:
Simon Wilson, KPMG Corporate Communications
T: 020 7 311 6651
M: 077853 73397
KPMG Press Office: +44 (0)207 694 8773

KPMG Organic Growth Barometer 2018: Companies reporting higher than 3.8% organic growth in 2017:  

Company Growth rate
Philip Morris
Constellation Brands  9.0%
The Estée Lauder Companies   6.7%
Davide Campari-Milano SpA 6.3%
Coca-Cola HBC  5.9%
Beiersdorf AG  5.7%
Rémy Cointreau SA  5.5%
AB InBev  5.1%
Heineken NV  5.0%
L’Oréal SA  4.8%
Diageo plc  4.3%
Nomad Foods Limited  3.9%


KPMG Organic Growth Barometer 2018: Companies in the top quartile 2013-2017, based on compound annual growth rate (CAGR):

Company Growth rate
Lindt & Sprungli  7.0%
Estée Lauder 6.5%
Brown-Forman 5.6%
Constellation Brands 5.4%
Beiersdorf AG 4.7%
Philip Morris International  4.7%
AB InBev  4.6%
L’Oréal 4.4%
Colgate-Palmolive 4.2%


About the KPMG Organic Growth Barometer 2018:

The 2018 edition of the KPMG Organic Growth Barometer compares the organic revenue growth of 49 of the largest packaged goods companies listed on the US and European stock exchange. The information is based on externally reported company data. Organic revenue growth is defined as the percentage of year-on-year changes in revenue at a constant foreign exchange rate, excluding the impact of acquisitions and divestments. Our 2018 edition measures year-on-year changes in organic revenue growth from 2016 to 2017, on the basis of a five year compound annual growth rate (CAGR) from 2013 to 2017. The analysis enables Consumer Packaged Goods (CPG) businesses to benchmark their performance and also provides insights on strategies for growth.

About the Global Consumer Executive Top of Mind survey:

Now in its sixth year, this annual survey was conducted by telephone and online between March and April 2018. A total of 530 senior executives from companies headquartered in 28 countries participated in the survey. The respondents were senior executives at global companies from the food, drink or consumer goods, manufacturing and/or retail sectors, 87 percent of which had at least USD 500 million in annual revenues. The companies in the survey represent over USD 3.2trn in consumer sales.

About KPMG in the UK

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 14,500 partners and staff. The UK firm recorded a revenue of £2.2 billion in the year ended 30 September 2017. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 154 countries and territories and has 200,000 people 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.

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