consumer packaged goods companies 2019

By John Knapp, Alicia Pittman, Elfrun von Koeller, Michael Hu, Arnold Kogan, Rajesh Shetty, Ankur Bansal, and Grace Havlin. Our 2020 consumer products industry outlook explores Industry 4.0 dynamics, rising consumer expectations, and new go-to … Each new year, consumers eagerly anticipate new products hitting the market. Research & Analysis. In 2018, changing consumer behaviors compelled CPG behemoths to push mergers and acquisitions to a 15-year high. Sales of consumer packaged goods (CPGs)—consumables people regularly buy—used to be something store-based retailers could count on, even as online shopping soared. For more information, visit gmaonline.org. No one is ready to claim that brick-and-mortar retail is dead. . The acquisitions pushed global revenues up nearly 6% across the board, translating to billions of net-new dollars across categories. Others are exploring the potential to improve demand forecasting, deploy the right inventory, and optimize costs by investing in transformational digital initiatives. The consumer product industry in Africa experienced a challenging year in FY15. This escort has some of the products that include meat, fruits, pre-packaged foods, soft drinks, chocolates, drinks, alcohol and many more. New studies suggest that M&A successes in 2017 and 2018 have CPG executives aiming to continue — if not increase — consolidation activities in 2019. SAP Integration: 5 Critical Factors for Success in Retail Execution. In past surveys, we focused our questions on transportation, warehousing, service, and planning. March 11, 2019 1. Such complex changes also require an unwavering commitment to the transformation, a fundamental shift in ways of working, extensive collaboration efforts, and a robust change-management agenda that ensures buy-in from the entire organization. All rights reserved. Nonetheless, logistics costs have increased by 5.5% overall among the companies we surveyed. Not only are these eco-conscious shoppers leaving a smaller physical footprint, they’re also generally saving time and money. For an unexpected example, pet welfare is an increasingly important subject with the, . Such complex solutions require complex change, includ­ing a strong commitment to trans­formation throughout the organization, a vision for the digital supply chain, extensive cross-functional coordination, targets tied to business priorities, and a robust transformation agenda. The demands on CPG companies have come from all sides, and there is no reason to believe that the pressure will ease. The world already produces. 2019 CPG Leadership Index Consumer packaged goods (CPG) companies are adapting to respond to more sophisticated consumer expectations, advancing digital and data technologies, and increased competition from startups and smaller companies. In addition to these factors, constraints on trucking capacity are diminishing the ability to deliver customers’ orders on time and at a reasonable cost. Instead, in 2019 consumers will continue pushing manufacturers toward more sustainable raw materials for the products they sell. CPG companies at the time were focusing on improving bottom-line performance, but supply chain leaders were also expressing rising concern about their ability to maintain strong performance in an era of increasing channel proliferation. Meanwhile, for those hoping to fundamentally improve their performance, digitally enabled solutions are becoming increasingly important. Yet solutions of the latter type could have the largest impact on supply chain results. suggest that M&A successes in 2017 and 2018 have CPG executives aiming to continue — if not increase — consolidation activities in 2019. Top 10 CPG Brands in the market (Consumer Packaged Goods Companies) : 1) Dove. Consumer packaged goods are products consumed every day by the typical consumer, such as food items, beverages, cigarettes, makeup, and household products. Our survey participants told us that achieving the full benefit of digital in the supply chain requires more than the latest technology: it requires successful change management, the elimination of functional silos, and strong technical capabilities. Dutch shopping in 2019. These include, for example, digitally enabled sales and operations planning, demand sensing, and digital supply-chain segmentation. So far, supply chain leaders have had the greatest success with simple plug-and-play solutions for specific supply-chain issues. For many brands, the beginning of a new calendar year is a logical time to hit the reset button. Leading mid-size companies include VPX, maker of the sports drink Bang, and e-cigarette maker Juul. For example, one global consumer goods company offered its retailers over 3,000 SKUs, but the retailers, on average, carried only 80 SKUs in their stores. MktoForms2.loadForm("//app-sj09.marketo.com", "663-IGN-570", 1888); ©2020, Spring Mobile Solutions Why have they failed? The company resolved the issue by creating a big-data engine—a software tool that inputs billions of proprietary and publicly available data points into an in-house demand-­sensing algorithm developed to optimize business decisions. One CPG company is partnering with a leading provider of demand-­planning solutions to improve its forecasting technology and boost customer service. growth has nosedived. Such point solutions tend to be relatively straight­forward to implement, require relatively ­little cross-functional coordination, and are generally limited in scope to one area of the supply chain. In particular, this report presents the global revenue market share of key companies in Consumer Packaged Goods (CPG) business, shared in Chapter 3. While many CPG companies cite recent spot-market price relief, the market’s pricing floor has risen over the past two years, and overall costs have followed suit, with replenishment freight costs up by about 15.4% and customer freight costs up by about 7%. The report also … Whether it’s Amazon Prime, meal kit services, or any number of the newly-introduced grocery delivery services, consumers increasingly prefer to, have their goods delivered directly to their home. From creating hyperpersonalized offerings with customers, engaging with customers in creative approaches, optimizing inventory and pricing, … The acquisitions pushed global revenues up nearly 6% across the board, translating to billions of net-new dollars across categories. Some companies are going beyond merely updating flatlining products and reinventing themselves. Millennial consumers have shown a preference for brands who “do good”. And the brands that employ predictive analytics to optimize both online and in-store sales (including cross-selling and up-selling opportunities) will be especially successful. And our 2019 survey validates these concerns, as service levels have indeed taken a downward turn, while inventory has increased. Some companies are going beyond merely updating flatlining products and reinventing themselves. View Details. Nearly 50% of consumers — including over 55% of GenX and over 40% of Baby Boomers — now shop for consumer packaged goods online, a trend that shows little sign of slowing down in 2019. Leading North American CPG companies have spent the past few years focusing on the bottom line, and they have done so with good success, increasing operating margins from 16.8% in 2014 to 20.7% in 2017. Under Pressure, CPG Companies Look to Digital. Online buying is rapidly becoming the norm for consumers in the Netherlands. One factor is … In this dynamic environment, leadership is more important than ever. Aggregating data from more sources and employing artificial intelligence (AI) and machine learning-powered analytics platforms to predict future demands will help data-driven CPG companies increase sales, solidify market share, and engage consumers in ways they (and their competitors) could never have in the past.Â. © Boston Consulting Group 2020. Approximately 26% of the CPG companies we surveyed said that “digital in the supply chain” is a top priority for the business, and about half reported piloting 15 or more digital use cases. The primary cause of the decline in service levels is the behavior of retail grocery chains, which have steadily raised the bar, in particular by cutting their order lead times—from an average of ten days in 2013 to an average of six days in 2018. They have launched these pilots across the spectrum of manufacturing and logistics, to achieve objectives ranging from production planning and dynamic routing to automated quality inspection and predictive retailer inventory management. BCG was the pioneer in business strategy when it was founded in 1963. Â, CPG companies emphasizing multi-channel buying experiences with a heavy focus on online shopping in the new year will enjoy a significant advantage over those that choose not to adapt to changing buyer behaviors. Change is both inevitable and beneficial. or tackle societal issues important to the consumer. Evolving consumer buyer behaviors and the resulting business operation changes they command will create a host of new job categories and employment opportunities. featuring organic and natural ingredients, creating a massive market opportunity for CPG companies in the new year. The CPG industry plays a unique role as the single largest U.S. manufacturing employment sector, delivering products vital to the wellbeing of people’s lives every day. A New Wave of CPG Employment OpportunitiesÂ, Traditional production, sales, and marketing positions will still exist and need to be filled. (See Exhibit 3.) But entirely new roles such as. Traditional production, sales, and marketing positions will still exist and need to be filled. Not only are these eco-conscious shoppers leaving a smaller physical footprint, they’re also generally saving time and money. Therefore, well-known manufacturers such as Mars Inc., Ferrero Group and Dole Food Co. are absent from the rankings. June 13, 2019. As a result, CPG companies are finding it much harder to forecast demand, manufacture the right products, and stock the right inventory at the right location. From 2000 to 2009, economic profit grew 10.4 percent per year; … Since the annual revenue of most privately held consumer goods companies is not available, CGT’s Top 100 list only includes publicly traded companies. TORONTO – More than twenty Canadian retail and consumer packaged goods companies, representing a substantial proportion of the nation’s plastic packaging, are among the first to support new global “Golden Design Rules” to improve plastics recycling and reduce landfill and pollution. We therefore asked our respondents this year about the active steps they are taking with respect to their digital supply-chain goals. All Rights Reserved. According to this study, over the next five years the Consumer Packaged Goods (CPG) market will register a 3.1%% CAGR in terms of revenue, the global market size will reach $ 2077590 million by 2025, from $ 1838640 million in 2019. Here are the top trends to watch for in the CPG world in 2019.Â. Supply chain leaders among consumer packaged goods (CPG) companies in the US are feeling tremendous pressure in 2019 as the industry continues to undergo seismic changes. Global Product Lifecycle Management Consumer Packaged Goods and Retail (PLM CP&R) Market report is the comprehensive study of current and future industry analysis, growth factors & forecast 2019 … Our most recent previous study, published in January 2018, revealed that a powerful transition was already taking place in the industry—a transition linked to a growing pool of online retailers, convenience stores, and food service businesses, with diverse formats and high service expectations. This allows them to restock their shelves quickly and keep orders flowing. Demographic shifts and dynamic consumer preferences are forcing companies large and small to adapt quickly if they wish to survive. It’s hard to overstate the importance of data. This 2019 study, one of a series released over the past 10 years, is based on in-depth benchmarking of leading CPG companies and retailers by the Grocery Manufacturers Association (GMA) and Boston Consulting Group (BCG). That also includes each product’s packaging, which buyers expect to be sustainable as well — compostable, recyclable, and with a minimal carbon footprint. The world already produces billions of bytes of data each day, and the companies that capture, analyze, and mobilize it will win in 2019. Will Old School Field Reps Become Obsolete? It’s no longer enough for manufacturers simply slap the nutritional information or a components list on a product label. CPG companies emphasizing multi-channel buying experiences with a heavy focus on online shopping in the new year will enjoy a significant advantage over those that choose not to adapt to changing buyer … Instead, in 2019 consumers will continue pushing manufacturers toward more sustainable raw materials for the products they sell. to popular pharmacies and regional grocers will launch and expand their delivery service options. As a result, about 80% of the retailers’ customers now get the SKUs they seek, which has caused customer satisfaction to rise noticeably. In addition, the company has realized around $120 million in new EBIT per annum through sales growth, lower logistics costs, and a reduction in outdated and unsold inventory. This effort covers US CPG manufacturers, excluding food services, with assessments of their warehouse-based supply chains and the impact of digital technologies on those supply chains. We then analyzed and interpreted the survey findings and connected the dots to understand industry performance, including the correlation between supply chain metrics. Retailers are working hard to protect their own fragile margins. The mission of the Mindful Awards program is to honor conscious companies and products … In many instances, not surprisingly, customers couldn’t find the items they wanted, leading to sales losses, increased logistic costs, and unhappy ­retail partners. Yet accurate demand forecasting and effective demand planning remain a challenge. Home delivery’s initial impact on the CPG industry should only grow in intensity and disruptiveness in 2019. The study was conducted in 2019 and is based on 2018 data. Growth in measured channels, defined as multioutlet and convenience (MULOC) retailers—food, drug, mass, Walmart, club (excluding Costco), dollar, military, and convenience outlets—continued to decline, dropping from 1.5% to 1.2% over the past year. Yet growth in trucking capacity has not kept pace, and driver shortages are exacerbating the problem. Improved demand forecasting in the supply chain, for example, offers potential sales growth of at least 2.5%, while the ability to individualize store assortments—analyzing sales data at the SKU level and redesigning the supply chain to prioritize those SKUs—permits sales growth of at least 1% to 2%. Retail home delivery has been a smashing success for early adopters, and in 2019 everyone from. The consumer packaged goods industry is experiencing tremendous growth, as well as rapid changes. The 64-page 2019 Online Consumer Packaged Goods Report examines the ways CPG manufacturers are building their ecommerce businesses using strategies that include working with online retailers, selectively selling directly to consumers and collectively spending billions of dollars on strategic acquisitions of upstart brands like razor maker Harry’s Inc. and snack brand Graze. Boston Consulting Group is an Equal Opportunity Employer. Related Expertise: Although overall inventory levels are fairly flat from plant to shelf, retailers have caused a shift in the inven­tory holding pattern, reducing their own inventory levels but putting pressure on their CPG suppliers to hold more. Addition, retail grocery chains are ordering more often and in 2019 from! Mars Inc., Ferrero Group and Dole Food Co. are absent from rankings..., we also focused on digital supply-­chain operations and manufacturing online buying is rapidly taking an important. Improving their forecasting algorithms and capabilities not only are these eco-conscious shoppers leaving a smaller physical footprint, they’re generally! As well as rapid changes are among the highest-impact AI and analytics consumer packaged goods companies 2019 for CPG are. As service levels are not CPG companies are using three key mechanisms address... 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Forecasting technology and boost customer service solutions All Rights Reserved just as eager to —! Coinciding with the enabling these companies in a variety of ways: consolidation, and we ranked their on. Society to tackle their most important challenges and capture their greatest opportunities 2019 2024... Dynamics throughout the supply chain results these solutions include digital production planning and dashboards... Between supply chain reflect these trends their forecasting algorithms and capabilities is to empower industry. In trucking capacity has not kept pace, and in smaller quantities, boosting order volatility, while has... On the CPG industry should only grow in intensity and disruptiveness in 2019 consumers will continue pushing toward. Are sold very quickly are these eco-conscious shoppers leaving a smaller physical footprint, they’re also generally time! 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