Consumer packaged goods
The CPG industry and its various sub-segments have known significant and constant growth over the past years driven by emerging markets, mergers and acquisitions (M&A) and product innovation. The economic downturn does not walk passed CPG manufacturers: they face a series of challenges that – due to unprecedented circumstances – need adequate responses.
The current downturn – like other recessions before – affects customer spending in different ways. An increasingly strong polarization between private labels and manufacturer brands appears, yet there is no overall sense of urgency. With a likely emergence of delayed impact CPG manufacturers cannot afford not to act.
Also, due to the effects of the economic downturn on consumer spending, top-line growth will be a primary concern for CPG companies in the coming year. To that end, M&A becomes an important tool as markets grow slowly and offer CPG companies limited ability to raise prices. Setting aside expansion in emerging markets, the only way to grow in a big way is through strategic acquisitions and the juggling of product portfolios.
Some companies throughout the different segments of the CPG industry have already reduced budgets, cut back investments initiated (or completed) reorganizational programs. A lot of companies however only very recently properly estimated the through impact of the current downturn and the necessary measures and actions that go with it.
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