cross section view of orange

Analysis

Consumer products M&A update: Q2 2018

The consumer products industry has seen a major trend of purchaser’s putting more emphasis on brands and products that are natural, clean, and organic. Because of this, organizations are having to step up to the plate to emphasize brand strategy, supply chain processes, and item ingredients to meet consumers’ new standards. This consumer products mergers and acquisitions (M&A) update provides Deloitte Corporate Finance LLC insights and market data analysis that shed light on M&A trends in the consumer products industry.

Consumer products trends

  • Beauty landscape is changing1: When it comes to beauty and personal care products, overall sales are down by one percent and two percent, respectively. However, increased transparency at the consumer level has led to healthy growth in natural products and in the clean, simple ingredients categories. Additionally, consumers have knowledge of and improved access to a wider range of brands and options, leading companies to differentiate themselves through an increased variety of products. In the past five years, the number of colors available in facial cosmetics has grown 22 percent.
  • Brand connection is key2: With an increased prevalence of consumers turning to online retailers, consumer connections with businesses have become crucial and increasingly challenging to develop. No longer are consumers only concerned with the surface level details of the product, but they are also searching for the background, mission, and values of the company behind the product. This has led many companies to allocate additional resources to the development and the branding of their story.
  • Blockchain technology usage3: Consumer goods companies are beginning to utilize blockchain technologies across the industry. Companies can use the technology in order to track products through the supply chain as well as to trace foods in order to help ensure that the ingredients are actually farm to table, certified organic, and/ or humanely treated as they claim to be. As more companies begin to use this new technology, the consumer industry should become more efficient and have even more detailed and precise information at their fingertips.
  • Voice ordering popularity4: While consumer products traditionally fought for consumers in brick-and-mortar stores, and, more recently, digital marketplaces, the popularity of voice ordering, or the ability to place orders using a voice command, is on the rise. As a result, consumer product companies are increasingly battling to gain ground within homes, targeting busy customers who have quickly adapted to voice ordering for the level of convenience and ease that it provides in their day-to-day lives.

This newsletter is a periodic compilation of certain capital markets information. Information contained in this newsletter should not be construed as a recommendation to sell or a recommendation to buy any security. Any reference to or omission of any reference to any company in this newsletter shall not be construed as a recommendation to sell, buy or take any other action with respect to any security of any such company. We are not soliciting any action with respect to any security or company based on this newsletter. This newsletter is published solely for the general information of clients and friends of Deloitte Corporate Finance LLC. It does not take into account the particular investment objectives, financial situation, or needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all investors. This newsletter is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Prediction of future events is inherently subject to both known risks, uncertainties and other factors that may cause actual results to vary materially. We are under no obligation to update the information contained in this newsletter. We and our affiliates and related entities, partners, principals, directors, and employees, including persons involved in the preparation or issuance of this newsletter, may from time to time have “long” and “short” positions in, and buy or sell, the securities, or derivatives (including options) thereof, of companies mentioned herein. The companies mentioned in this newsletter may be: (i) investment banking clients of Deloitte Corporate Finance LLC; or (ii) clients of Deloitte Financial Advisory Services LLP and its related entities. The decision to include any company for mention or discussion in this newsletter is wholly unrelated to any audit or other services that Deloitte Corporate Finance LLC may provide or to any audit services or any services that any of its affiliates or related entities may provide to such company. No part of this newsletter may be copied or duplicated in any form by any means, or redistributed without the prior written consent of Deloitte Corporate Finance LLC.

References

1 “The three systemic shifts shaping the US beauty landscape.” What People Watch, Listen To and Buy, 20 Feb. 2018, http://www.nielsen.com/us/en/insights/news/2018/the-three-systemic-shifts-shaping-the-us-beauty-landscape.print.html, accessed August 13, 2018.

2 “The CPG Industry Trends of 2018 that brands and retailers must prepare for.” Shopkick Insights. https://www.shopkick.com/partners/blog/the-cpg-industry-trends-of-2018-that-brands-and-retailers-must-prepare-for/, accessed August 13, 2018.

3 Schneider, Achim. “Trends to watch in 2018.” Consumer Goods Technology, 5 Feb. 2018, https://consumergoods.com/trendswatch-2018, accessed August 13, 2018.

4 Zealley, John. “Five consumer goods trends that will shape 2018.” The Marketing Insider, 5 Feb. 2018, https://www.mediapost.com/publications/article/314036/5-consumer-goods-trends-that-will-shape-2018.html, accessed August 13, 2018.

Did you find this useful?