Entered developing markets early and actively cultivated their categories as consumers became wealthier.By partnering on innovation and in-store execution and tightly aligning their supply chains, FMCG companies secured broad distribution as their partners grew. Built relationships with grocers and other mass retailers that provide advantaged access to consumers.
This capability achieved reliable growth and gross margins that are typically 25 percent above nonbranded players. Perfected mass-market brand building and product innovation.Pioneered just after World War II, the model has seen little change since then. This success owed much to a widely used five-part model for creating value. By 2010, the industry had created 23 of the world’s top 100 brands and had grown total return to shareholders (TRS) almost 15 percent a year for 45 years-performance second only to the materials industry. A winning model for creating valueįor many decades, the FMCG industry has enjoyed undeniable success.
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To win in the coming decades, FMCGs need to reduce their reliance on mass brands and offline mass channels and embrace an agile operating model focused on brand relevance rather than synergies. But the model that fueled industry success now faces great pressure as consumer behaviors shift and the channel landscape changes. The fast-moving-consumer-goods industry has a long history of generating reliable growth through mass brands.
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