It wasn’t long ago when scale defined the CPG landscape. Large companies across the beverage, food, and beauty industries sold more and grew faster than their smaller competitors. But as of 2017, things changed. For the first time, growth and sales volumes for multioutlet and convenience retailers dropped. Meanwhile, small companies continued to increase their market shares and drive sales.
In 2017 alone, the revenues of larger GPC companies remained relatively flat at 0.2 percent, while smaller and emerging CPG companies grew by approximately 2.3 percent, which translates to $15 billion in sales stolen from their larger rivals. That’s not to say that being small is necessarily a competitive advantage, but that scale is no longer the only competitive advantage.
So what were are the top-performing companies doing differently today? It turns out, a whole lot, according to the sixth annual study by Boston Consulting Group and IRI of U.S. growth leaders across CPG.
The fastest-growing CPG companies do the following:
Differentiate their offerings
The fastest-growing companies work tirelessly to understand and identify their core consumers. Using a data-driven approach, they were able to figure out not only what their consumers wanted, but when, how and why they wanted it, which leads to a portfolio of differentiated offerings with an authentic feel.
Target consumers with greater precision
Using the data they gathered to differentiate their offerings, the fastest-growing companies also develop and market products that address the specific preferences of their consumers.
Complement organic growth with inorganic growth
The fastest-growing brands also invest in smaller companies that help them fill holes in their portfolios and acquire the skills they need to expand into new markets. This can be done in a variety of ways from incubators to venture units.
For more insights, read the full article here on Boston Consulting Group’s site.