Zawya

M&A Playbook for Consumer Products Companies

M&A Playbook for Consumer Products Companies

  • aprile 07, 2022
  • Tempo di lettura min.

Zawya

M&A Playbook for Consumer Products Companies

Large consumer goods companies have been losing out in the race for growth, and M&A is high on their agenda as they seek to reignite top-line performance.

Despite overall annual market growth of 4% from 2012 to 2019, the 30 largest consumer goods companies grew less than 1%, a growth gap further widened by Covid-19. Meanwhile, prior to the pandemic, insurgent brands captured more than 30% of the growth across the categories in which they exist, despite accounting for only 3% of the market share.

Growth is key to boosting shareholder returns in consumer products. Our research shows that every additional percentage point of growth acquired is rewarded by higher enterprise value (EV).

That’s why large consumer goods companies are buying small, high-growth brands in record numbers. These growth-focused scope and capability deals now account for 75% of M&A volume among top consumer goods companies, up from less than 50% a decade ago. This increased activity is driving greater competition for attractive assets.

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