Global consumer products industry rides out another year of global economic uncertainty

Despite economic uncertainty, the world’s 250 largest consumer products companies generated sales of nearly $3.1 trillion in fiscal year 2013¹. This means an average company size of $12.3 billion in net sales. Nestlé consolidated its third position while Swatch Group, Rolex and Emmi improved their position. Lindt & Sprüngli joined the ranking for the first time, according to the eighth annual “Global Powers of Consumer Products” report by Deloitte.

“The fall in the price of oil has a considerable impact on the global economy with increased disinflationary pressures, especially in developed markets such as the United States, Europe and Japan”, said Howard da Silva, Consumer Business Industry leader for Deloitte in Switzerland. “It boosts consumer purchasing power in oil-consuming nations and thus contributes to faster economic growth.”

Swiss companies are getting stronger

Nestlé, the world’s largest food company, retained its third place position in the list of global consumer products companies and confirmed its position as number one of the “Top 10 European companies”. Other Swiss companies in the Top 250 worldwide are watchmakers Swatch Group (rank 88, +7 places since last year) and Rolex (rank 139, +12) as well as dairy company Emmi (rank 212, +25). The improved ranking positions give proof of the strength of Swiss companies in this sector. The Swiss chocolate manufacturer Lindt & Sprüngli entered the ranking for the first time and at position 244.

Strong M&A deals activity in the consumer products industry

The number of M&A deals has increased every year since 2009, with a total of 1,421 concluded deals by consumer products companies in 2013. Based on the numbers to date, 2014 is on track to reach or surpass 2013’s deal volume. Unlike the number of deals, the transaction volume tended to decrease since 2009 - that is until 2013 when the average value rebounded sharply. The decline in the transaction volume through 2012 might be accounted for bargain hunting opportunities, at least in part, resulting from the global economic slowdown.

Howard da Silva comments: “Organic growth remains a challenge for many consumer products companies. As a result companies will continue to consider strategic acquisitions as a fast-track method to increase market share. Over the next few years we expect consumer products companies to continue their acquisition and disposal activities in order to streamline their product portfolios, making their organizations more agile and responsive with regard to changing consumer preferences.”

Connecting with the connected consumer

While consumers have unprecedented access to product information and online expertise to make their purchasing decisions, recent research² from Deloitte shows that consumers ask advice much more from families, friends and other consumers than from product or service experts. Sixty percent said that they trust either family and friends or customer reviews for information on products and services, followed by independent product/service experts (43 percent); store staff/retailer website (16 percent) and product manufacturers (12 percent).

“More often consumers ask those they feel they can trust and statistics indicate that trust is an important driver of consumer purchasing behavior”, says Stefano Griccioli, Deloitte Partner Consumer Business. “Thus it is imperative that in return for sharing their data, consumers receive something valuable and that their data are protected. This is one of the big challenges facing consumer goods companies.”

¹Encompasses fiscal years ended through June 2014
²Deloitte Research, May 2014

Top 10 consumer products companies

Source: Published company data

About the survey

The 8th annual Global Powers of Consumer Products report by Deloitte Touche Tohmatsu Limited (DDTL) identifies the 250 largest consumer product companies around the world. The ranking is based on publicly available data for the fiscal year 2013 (encompassing companies’ fiscal years ended through June 2014). The report also provides an outlook for the global economy, an analysis of market capitalisation in the industry, a look at M&A activity in the consumer products sector as well as a discussion of major trends affecting consumer products companies such as the importance of connecting with the related consumer.

To download a copy of the full report, visit Global Powers of Comsumer Products 2015 page.

***

About Deloitte in Switzerland

Deloitte is a leading accounting and consulting company in Switzerland and provides industry-specific services in the areas of audit, tax, consulting and corporate finance. With approximately 1,300 employees at six locations in Basel, Berne, Geneva, Lausanne, Lugano and Zurich (headquarters), Deloitte serves companies and institutions of all legal forms and sizes in all industry sectors. Deloitte AG is a subsidiary of Deloitte LLP, the UK member firm of Deloitte Touche Tohmatsu Limited (DTTL). DTTL member firms comprise of approximately 210,000 employees in more than 150 countries around the world.

Note to editors

In this press release references to Deloitte are references to Deloitte AG, a subsidiary of Deloitte LLP, which is the United Kingdom member firm of Deloitte Touche Tohmatsu Limited (“DTTL”), a UK private company limited by guarantee, whose member firms are legally separate and independent entities. Please see www.deloitte.com/ch/about for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP and its subsidiaries are leading business advisers, providing audit, tax, consulting and corporate finance services through more than 14 000 exceptional people across the UK and Switzerland. Known as an employer of choice for innovative human resources programmes, it is dedicated to helping its clients and people excel.

Deloitte AG is an auditor firm recognised and supervised by the Federal Audit Oversight Authority (FAOA) and the Swiss Financial Market Supervisory Authority (FINMA).

The information contained in this press release is correct at the time of going to press.