The world's 250 largest consumer products companies grew by 7% in fiscal year 2011, which encompasses fiscal years ended through June 2012, despite global economic uncertainty, with total sales exceeding $3 trillion, up from $2.82 trillion in fiscal year 2010. Additionally, the report found that the ten largest consumer products companies reported combined sales of $846 billion.
"The global economy has witnessed several challenges including inflation, the euro crisis and natural disasters. Healthy consumer product sales are an indicator that the global economy may be cautiously rebounding," said Dr Ira Kalish, director of global economics at Deloitte Services LP in the US. "For the coming years, this means that the industry should see solid growth, but disproportionately coming from emerging markets."
The report also measured year-over-year composite growth rates by region, with Africa/Middle East companies (24% growth) posting the highest gains, followed by Latin America (16%), North America (14%), Europe (4%) and Asia/Pacific (2%). However, within Europe, French companies year-over-year growth (15%) outpaced their German (6%) and British (6%) counterparts. North America had the highest composite net profit margin (10%) of all the regions.
In Asia-Pacific, Japanese companies' sales declined 4%, due mainly to the continued effects of the earthquake and tsunami. However, excluding Japan, the Asia-Pacific region as a whole posted above-average year-over-year growth numbers (10%) with China/Hong (24%) realizing the biggest increase.
For the first time, the report also looked at companies' growth over a five-year period, which yielded different results by region. Latin America had the highest compound annual growth rate of all the regions (22%) from 2006 to 2011, followed by Africa/Middle East (10%), Europe (6%), North America (6%) and Asia/Pacific (5%).
| Rank | Company | Country of Origin | 2011 Net Sales (US $million) | FY 11 net sales growth % |
|---|---|---|---|---|
| 1 | Samsung Electronics | South Korea | 150,152 | 6.7 |
| 2 | Apple | US | 108,249 | 66.0 |
| 3 | Panasonic | Japan | 99,412 | -9.7 |
| 4 | Nestlé | Switzerland | 94,704 | -10.1 |
| 5 | Procter & Gamble | US | 83,680 | 1.4 |
| 6 | Sony Corporation | Japan | 70,022 | -12.3 |
| 7 | PepsiCo | US | 66,504 | 15.0 |
| 8 | Unilever | Netherlands & UK | 64,721 | 5.0 |
| 9 | Kraft Foods (now Mondelez International) | US | 54,365 | 10.5 |
| 10 | Nokia | Finland | 53,846 | -8.9 |
Clinton Houston, Deloitte consumer products sub-sector leader, says, "Despite the fact that Tiger Brands, South Africa's only entrant in recent years, just failed to make the list this year, there are a lot of results that are significant to South African based consumer products companies. For example; the number of relatively unknown Indo-Chinese manufacturers that are appearing on the list and whose names are becoming increasingly common in the market on the African continent, the relative performance of South African companies that are now listed on global exchanges and the relative performance of global manufacturers that have interests in African entities."
Houston goes on to say that electronic products all available in the South African market, filled the top three spots. "For the fifth consecutive year, Samsung retained its number one position, followed by Apple, which climbed 21 spots in five years to rank second while Panasonic Corporation remained in third place."
For the second consecutive year, the fashion goods industry posted the highest growth rate (14%) of all the product sectors analysed. It also remained one of the most profitable, with a composite net profit margin of 8%. On the other hand, the food, drink and tobacco sector saw its top 250 representation decline. Nevertheless, the sector reported substantial composite sales growth of 9%.
The 50 fastest-growing consumer products companies grew more than three times faster than the Top 250 as a whole. For the first time, the Fastest 50 were determined by their sales growth over the five-year period 2006 to 2011. Nearly 60% of the Fastest 50 were also among the 50 fastest growing companies in 2011, with emerging markets such as China and Brazil well represented.
The report also gauged consumer behavior trends, particularly in light of digital growth. With the increase of smartphone and tablet adoption, the impact on consumers and their "path to purchase" has been evident. Deloitte research has found that 58% of consumers who own a smartphone have used it for store-related shopping.
Jack Ringquist, global consumer products lead, DTTL says that the impact of this digital growth on consumer and shopper behavior cannot be underestimated. It affects the way consumers interact with brands, how they research products, purchase via multiple channels, take advantage of promotions and receive post-purchase customer service. Manufacturers must continue to rethink their operating models and leverage analytics to better identify, understand and ultimately satisfy consumer needs.
"Although the report rightly acknowledges the leadership position that FMCG companies often enjoy; in the field of collecting and understanding data and in particular consumer analytics, there is much that can be learnt from our retail partners in terms of managing an omni-channel environment, as opposed to having a blanket customer segmentation scheme. This becomes a critical component in any African expansion strategy, especially given the projected growth in e-commerce and m-commerce on a continent that has really embraced mobile telecommunication," concludes Houston
To download a copy, go to www.deloitte.com/consumerbusiness.
