Business Day

Consumer Brands Must Be Prepared for Change

A decade ago, issued dire warnings about the power of consumer-packaged goods brands, but their predictions turned out to be premature.

Par Oliver Merkel and Vijay Vishwanath

First published on avril 19, 2016
min


This article originally appeared on Business Day. A decade ago, many analysts looked at two looming trends—the rise of retail consolidation and the proliferation of private labels—and issued dire warnings about the power of consumer-packaged goods brands. Their predictions turned out to be premature. Brands managed overhead costs aggressively, pursued dynamic growth in developing markets and gained scale, efficiency and entry to new markets through mergers and acquisitions—and now report 10-year high operating margins. Of course, not all companies fared equally well. Nearly half of the highest-valued consumer goods companies in 1999 no longer ranked in the top 20 by market capitalisation last year. Also, between 2004 and 2014, the top three brands in major categories maintained top-three status in only 30% of US categories we studied. Read the full article at BusinessDay. Merkel is a partner in Bain & Company’s Johannesburg office and Vishwanath is a partner in Bain & Company’s Boston office.

This article originally appeared on Business Day.

A decade ago, many analysts looked at two looming trends—the rise of retail consolidation and the proliferation of private labels—and issued dire warnings about the power of consumer-packaged goods brands. Their predictions turned out to be premature.

Brands managed overhead costs aggressively, pursued dynamic growth in developing markets and gained scale, efficiency and entry to new markets through mergers and acquisitions—and now report 10-year high operating margins.

Of course, not all companies fared equally well. Nearly half of the highest-valued consumer goods companies in 1999 no longer ranked in the top 20 by market capitalisation last year. Also, between 2004 and 2014, the top three brands in major categories maintained top-three status in only 30% of US categories we studied.

Read the full article at BusinessDay.

Merkel is a partner in Bain & Company’s Johannesburg office and Vishwanath is a partner in Bain & Company’s Boston office.