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.
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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.