2024 consumer products industry outlook

A new playbook for consumer products companies

For the last few years, growth for consumer products companies—spanning food and beverage, household goods, personal care, and apparel—relied on price taking. Input costs rose dramatically, so price had to follow—to near-unprecedented levels. 

That strategy seems to have worked for several companies: Looking at the highest performers among the global top 100 companies in the consumer products industry by revenue, we see they were able to raise prices as much as, if not more than, others, with smaller hits to volume and more margin growth. The larger group of these “Profitable Growers,” reveals important lessons about pricing power, revenue growth management (RGM), innovation, supply chain smarts, and a willingness to prune and refresh their business portfolio and product set perpetually.

Those lessons will likely be as important in 2024, but the world is changing. Further significant price increases might not be possible in an uncertain economy where retailers are pushing back, and consumers are unwilling to pay more and often trade down. In our 2023 Outlook, eight in 10 executives surveyed planned to increase prices.  Now, only 2% said their company’s profitable growth approach would emphasize raising prices.

So, to what new growth formula might the industry turn? If price has run its course, companies may need to pivot to volume. But not all volume is equal. Companies that aspire to Profitable Grower status in 2024 should consider profitable volume. That means executing a plan that carefully grows volume with an innovative and more profitable product mix while retaining as much pricing as practical. 

For our 2024 Consumer Products Industry Outlook, we’ve created a profitable volume playbook, derived from financial performance and earnings transcript analysis, subject-matter specialist interviews, and a global survey of 250 consumer products executives. Its components include moves to boost both volume and profitability:

Volume

• Targeted advertising and promotion
• Precision growth management
• Opportunistic M&A 

Profitability

• A rebalanced mix 
• Strategic innovation
• Enhanced operations and supply chain
  

Of course, these factors are intertwined: mix affects price, price affects volume, and so on. The key is finding the right balance among them to drive profitable volume. Each leadership team in the C-suite should own part of the agenda to hit the mark (see role-based questions provided in “agenda for actions”).

Our 2024 consumer products industry outlook also includes a series of deep dives that span: 

• A macro-economic outlook
• A view from the industry’s subsectors
• Executive perspectives on Gen AI and GLP-1
• A review of emerging regulations
• The mega trends affecting the industry’s long-term future

Download our full report to learn more about profitable volume and these trends and hot topics.

About the report

Deloitte analyzed a worldwide set of the largest 100 public consumer products companies by revenue, drawn from S&P Capital IQ and filtered for industry definitional fit, e.g., excluding high-end luxury, tobacco, conglomerates with less than 50% of revenue from consumer products, etc. The team then used a five-year composite percentile index of both top-line growth and efficient use of assets (measured in return on assets) to assess relative success.

Deloitte also conducted a global survey of 250 consumer products executives spanning food & beverage, household goods, personal care, and apparel. All respondents were senior decision makers at companies with over $500M in revenue (most over $5B). They were sourced proportionally to roughly match the geographic markets and subsectors in the top 100 global consumer products company financial analysis.

Survey questions were developed through an analysis of trending topics found in company reports, earnings call transcripts, and analyst reports, as well as through exploratory surveys and interviews with financial analysts, investors, and Deloitte leaders. The team also deployed many of these same methods to determine what high-performing companies (on revenue and ROA indexes) were doing differently from the low-performing companies in our financial analysis.

Authors: Nick Handrinos, Leon Pieters, Dr. Jacob Bruun-Jensen, Justin Cook, Céline Fenech, Jagadish Upadhyaya