Hamartia Antidote
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Fast moving consumer goods are consumable products that are purchased in short cycles. "Consumables" doesn't necessarily imply products that are ingested; rather a product that can be used and exhausted quickly. Anything that you pick up on a weekly shopping trip would be considered FMCG: shampoo, toiletries, canned goods, laundry products, and trash bags are examples of FMCGs. In contrast durable goods are larger ticket items that, in general, last through multiple uses. This could include: appliances, electronics and vehicles.
https://www.consultancy.uk/news/18765/the-50-largest-fmcg-consumer-goods-companies-in-the-world
Nestle, Procter & Gamble and Pepsico remain the world’s largest fast moving consumer goods companies in the world. The top end of the sector has seen rapid growth in recent months, in spite of challenging conditions, but a large part of this success is due to the large volume of merger and acquisition activity companies have wielded to weather the storm.
Large fast moving consumer goods (FMCG) companies have seen their revenue growth and operating profit growth hampered significantly in the past years. The sector faces a number of headwinds, as the ecommerce boom continues to eat into the profits of traditional retailers across the global market and currencies fluctuate dramatically while geopolitical instability threatens to hit imports and exports with tariffs. As a result, while the consumer goods segment can expect global demand to rise, key developing markets have undergone periods of slower than expected growth.
At the same time, while markets become increasingly volatile amid changing consumer habits and heightened digital competition, the revenue of top 50 FMCG companies has continued to grow, regardless. According to one recent report from OC&C Strategy Consultants, in the last year, this has risen strongly from 0.5% in 2016 to 5.7% in 2017 – as the FMCG market reached its highest level since 2011. With this in mind, a further exploration of the market to highlight which markets host the best atmosphere for sustained FMCG growth, and which companies are the entities to emulate, is essential for FMCG firms, going forward.
Of the world’s largest FMCG companies, Nestlé still sits top of the pile, by some distance. In spite of seeing sales growth plateauing, the company’s $91.1 billion revenues see it out ahead by some distance. Similarly, in second spot, Procter & Gamble did not see noticeable revenue growth in the past year, sitting at $64.5 billion, ahead of Pepsico, which grew by 1% to $63.5 billion. Unilever, which is mooting a simplification of its leadership structure by combining its previously split British/Dutch headquarters, remains fourth with $60.5 billion in revenues, growing 2%.
Meanwhile, seeing by far the largest portion of growth of the top 10, AB InBev saw revenues of $49.6 billion last year, expanding at a rate of 24%. This followed the group’s mega-deal with SABMiller, creating the world’s most dominant brewer, worth an estimated $275 billion. JBS was the last of the top 10 to see more than $40 billion in revenues, while Tyson Foods enjoyed 4% growth, and Coca-Cola retained a strong $35.4 billion revenue.
While the majority of the 10 largest FMCG players, two changes since 2015 show that by learning from the best practices of the industry’s biggest players, competitors can improve their market share. Cosmetics giant L’OREAL enjoyed solid growth of 4%, hitting global revenues of $29.3 billion, ahead of Philip Morris. The American multinational cigarette and tobacco manufacturing company saw growth of 8% drive global revenues to $28.7 billion.
Top 50
Beyond the top 10, French multinational food company saw growth of 12% in 2017, and revenues of $27.8 billion. The firm was closely followed by a group of four companies. Kraft-Heinz, British American Tobacco (which grew by 38%), Mondelez and Heineken all boasted revenues between $24 billion and $26 billion. Archer Daniels Midland and WH Group were the last firms to see revenues of more than $20 billion.
Altria Group and Suntory both saw revenues of close to $19 billion, while Asahi Breweries saw 23% growth push revenues to $18.1 billion, rounding off the top 20. Following Japan Tobacco’s $18 billion revenues, General Mills, Diageo, Colgate Palmolive, Kimberly Clark, Reckitt Benckiser, Grupo Bimbo, Johnson & Johnson and Kirin Breweries each bunched at revenues between $13 billion and $15 billion, while LVMH completed the top 30, at a revenue of $11.9 billion.
A number of companies follow closely behind in the following 10 FMCG players. Henkel, Estee Lauder, Kellogg, Molson Coors Brewing (which saw the highest growth of any top 50 FMCG player at 125%), Royal Frieslandcampina, KAO, Nippon Meat Packers, Brasil Foods, Pernod Ricard and Imperial Tobacco were also the last members of the ranking to record revenues over $10 billion.
Following closely behind with revenues of more than $9 billion were Arla Foods, Essity, Bunge, Carlsberg, and Hormel Foods. Yamakazi Baking, Shiseido (seeing 17% growth) and Tingyi each brought in more than $8 billion each, while Campbell and Danish Crown rounded off the top 50.
M&A trend
In terms of geography, the US hosts more of the top 50 than any other country, at 18. While Brazil hosts a larger average company size according to these figures, of $30.05 billion, this is largely thanks to containing only two of the top 50, so spreading their success less thinly. In terms of the 7 firms hosted outside of the US, Japan, the UK, France, Denmark, the Netherlands, Brazil, or China, the value of these groups is proportionally so high because Nestle and AB InBev fall into this category. Meanwhile, the four FMCG companies hosted in the UK featured a higher average growth than the rest of the world, at 19%.
The combined top 50 players have a total sales revenue of $1.09 trillion, and featured an average growth in sales revenue of 7% in the last financial year. A large driver of this growth has been thanks to the acquisition effect, however.
The FMCG sector saw 60 deals, worth $145 billion in 2017, with four key trends driving the ramping up of M&A activity in 2017. First, a continued emphasis on emerging markets saw 37% of acquisitions occur in such economies. Second, a clear pattern of portfolio optimisation emerged, as global top 50 firms acquired and divested in order to boost their growth ambitions in their existing portfolio areas. Third, “better you” products remained relevant, and five such acquisitions of companies making ‘healthy/natural’ products occurred, as information about the potential health benefits of this spread via new and old media. Finally, there were a number of acquisitions in non-core areas, as businesses explored new avenues to supplement their traditional businesses.
Ultimately, as markets become increasingly volatile amid changing consumer habits and heightened digital competition, many firms now look to acquisitions as a root to spreading risk as well as boosting financial performance in the short term. M&A activity subsequently accounted for around 15% of growth in the FMCG sector in 2017.
https://www.consultancy.uk/news/18765/the-50-largest-fmcg-consumer-goods-companies-in-the-world
Nestle, Procter & Gamble and Pepsico remain the world’s largest fast moving consumer goods companies in the world. The top end of the sector has seen rapid growth in recent months, in spite of challenging conditions, but a large part of this success is due to the large volume of merger and acquisition activity companies have wielded to weather the storm.
Large fast moving consumer goods (FMCG) companies have seen their revenue growth and operating profit growth hampered significantly in the past years. The sector faces a number of headwinds, as the ecommerce boom continues to eat into the profits of traditional retailers across the global market and currencies fluctuate dramatically while geopolitical instability threatens to hit imports and exports with tariffs. As a result, while the consumer goods segment can expect global demand to rise, key developing markets have undergone periods of slower than expected growth.
At the same time, while markets become increasingly volatile amid changing consumer habits and heightened digital competition, the revenue of top 50 FMCG companies has continued to grow, regardless. According to one recent report from OC&C Strategy Consultants, in the last year, this has risen strongly from 0.5% in 2016 to 5.7% in 2017 – as the FMCG market reached its highest level since 2011. With this in mind, a further exploration of the market to highlight which markets host the best atmosphere for sustained FMCG growth, and which companies are the entities to emulate, is essential for FMCG firms, going forward.
Of the world’s largest FMCG companies, Nestlé still sits top of the pile, by some distance. In spite of seeing sales growth plateauing, the company’s $91.1 billion revenues see it out ahead by some distance. Similarly, in second spot, Procter & Gamble did not see noticeable revenue growth in the past year, sitting at $64.5 billion, ahead of Pepsico, which grew by 1% to $63.5 billion. Unilever, which is mooting a simplification of its leadership structure by combining its previously split British/Dutch headquarters, remains fourth with $60.5 billion in revenues, growing 2%.
Meanwhile, seeing by far the largest portion of growth of the top 10, AB InBev saw revenues of $49.6 billion last year, expanding at a rate of 24%. This followed the group’s mega-deal with SABMiller, creating the world’s most dominant brewer, worth an estimated $275 billion. JBS was the last of the top 10 to see more than $40 billion in revenues, while Tyson Foods enjoyed 4% growth, and Coca-Cola retained a strong $35.4 billion revenue.
While the majority of the 10 largest FMCG players, two changes since 2015 show that by learning from the best practices of the industry’s biggest players, competitors can improve their market share. Cosmetics giant L’OREAL enjoyed solid growth of 4%, hitting global revenues of $29.3 billion, ahead of Philip Morris. The American multinational cigarette and tobacco manufacturing company saw growth of 8% drive global revenues to $28.7 billion.
Top 50
Beyond the top 10, French multinational food company saw growth of 12% in 2017, and revenues of $27.8 billion. The firm was closely followed by a group of four companies. Kraft-Heinz, British American Tobacco (which grew by 38%), Mondelez and Heineken all boasted revenues between $24 billion and $26 billion. Archer Daniels Midland and WH Group were the last firms to see revenues of more than $20 billion.
Altria Group and Suntory both saw revenues of close to $19 billion, while Asahi Breweries saw 23% growth push revenues to $18.1 billion, rounding off the top 20. Following Japan Tobacco’s $18 billion revenues, General Mills, Diageo, Colgate Palmolive, Kimberly Clark, Reckitt Benckiser, Grupo Bimbo, Johnson & Johnson and Kirin Breweries each bunched at revenues between $13 billion and $15 billion, while LVMH completed the top 30, at a revenue of $11.9 billion.
A number of companies follow closely behind in the following 10 FMCG players. Henkel, Estee Lauder, Kellogg, Molson Coors Brewing (which saw the highest growth of any top 50 FMCG player at 125%), Royal Frieslandcampina, KAO, Nippon Meat Packers, Brasil Foods, Pernod Ricard and Imperial Tobacco were also the last members of the ranking to record revenues over $10 billion.
Following closely behind with revenues of more than $9 billion were Arla Foods, Essity, Bunge, Carlsberg, and Hormel Foods. Yamakazi Baking, Shiseido (seeing 17% growth) and Tingyi each brought in more than $8 billion each, while Campbell and Danish Crown rounded off the top 50.
M&A trend
In terms of geography, the US hosts more of the top 50 than any other country, at 18. While Brazil hosts a larger average company size according to these figures, of $30.05 billion, this is largely thanks to containing only two of the top 50, so spreading their success less thinly. In terms of the 7 firms hosted outside of the US, Japan, the UK, France, Denmark, the Netherlands, Brazil, or China, the value of these groups is proportionally so high because Nestle and AB InBev fall into this category. Meanwhile, the four FMCG companies hosted in the UK featured a higher average growth than the rest of the world, at 19%.
The combined top 50 players have a total sales revenue of $1.09 trillion, and featured an average growth in sales revenue of 7% in the last financial year. A large driver of this growth has been thanks to the acquisition effect, however.
The FMCG sector saw 60 deals, worth $145 billion in 2017, with four key trends driving the ramping up of M&A activity in 2017. First, a continued emphasis on emerging markets saw 37% of acquisitions occur in such economies. Second, a clear pattern of portfolio optimisation emerged, as global top 50 firms acquired and divested in order to boost their growth ambitions in their existing portfolio areas. Third, “better you” products remained relevant, and five such acquisitions of companies making ‘healthy/natural’ products occurred, as information about the potential health benefits of this spread via new and old media. Finally, there were a number of acquisitions in non-core areas, as businesses explored new avenues to supplement their traditional businesses.
Ultimately, as markets become increasingly volatile amid changing consumer habits and heightened digital competition, many firms now look to acquisitions as a root to spreading risk as well as boosting financial performance in the short term. M&A activity subsequently accounted for around 15% of growth in the FMCG sector in 2017.
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