A study by The Boston Consulting Group (BCG) and Information Resources Inc. (IRI) has identified the top-performing companies in the U.S. consumer packaged goods (CPG) industry. It is the first study to compare both public and private CPG companies using a combination of three metrics—dollar sales growth, volume sales growth, and market share gains—based on comprehensive retail- and consumer-market tracking data.
BCG and IRI analyzed the 2012 performance of more than 400 CPG manufacturers with annual U.S. revenues of at least $100 million. Recognizing that players in different size categories face different opportunities and challenges, the research team generated three distinct top 10 lists of winning companies: small ($100 million to $1 billion in retail sales), midsize ($1 billion to $5 billion in retail sales), and large (more than $5 billion in retail sales).
Among large companies, the top three performers were Lorillard, The Hershey Co., and Anheuser-Busch InBev. The top-performing midsize companies were Green Mountain Coffee Roasters Inc., Chobani, and Starbucks. And the top-ranked small companies were TalkingRain, Idahoan, and Handi-foil.
“Our research with IRI shows that there is no single formula for success in the CPG industry,” said Jeff Gell, Senior Partner at BCG. “Companies are winning in various ways—through superior execution of their base businesses, innovation, and better management of price-volume tradeoffs. We are excited about working with IRI to bring distinctive analyses and compelling insights to the marketplace.”
The findings reveal that most winning companies are successfully growing their base businesses through gains in distribution. Pricing, however, is a key source of dollar sales growth for many of the large-company leaders, with growth in dollar sales outpacing volume sales growth. In contrast, growth in volume sales is a key source of dollar sales gains for small and midsize stars, suggesting that a more sustainable rise in consumer demand is powering performance.
These drivers of growth underscore a significant trend in the CPG industry: small and midsize companies are increasingly taking market share from large competitors. All top 10 small and midsize companies gained market share in 2012, with eight of the small-company winners grabbing at least 1.0 percentage points. Since 2009, large companies as a group have ceded 1.4 percentage points in market share, a drop that amounts to more than $10 billion in lost sales.
Among large-company winners, only three are growing from both their base businesses and innovation. Steps such as launching innovations that are incremental and do not detract from the existing portfolio can help balance growth from both parts of the business. Meanwhile, small- and midsize-company winners are generally concentrating on a few product categories in which they have a competitive advantage and experience strong consumer demand.