2014 Growth Leaders in U.S. Consumer Packaged Goods

Who Are the Growth Leaders in U.S.
Consumer Packaged Goods?
Research overview
March 11, 2015 – Selected highlights

1
Copyright©2015byTheBostonConsultingGroup,Inc.Allrightsreserved.
Executive summary of BCG-IRI study: Which consumer
packaged goods (CPG) companies are winning and why?
For the third year in a row, The Boston Consulting Group (BCG) and Information Resources, Inc. (IRI)
have examined more than 400 CPG companies with annual U.S. retail sales of more than $100 million
and ranked them on the basis of their growth performance.
The study, which includes both public and private CPG companies and focuses on what consumers
actually bought in measured channels as opposed to what factories shipped, uses a combination of
three metrics: dollar sales growth, volume sales growth, and market share gains. The study also
analyzes trends driving performance in the sector.
Because manufacturers of different sizes face distinct challenges and opportunities, BCG and IRI
generated three top-ten lists of the best-performing companies: small companies ($100 million to $1
billion in IRI-measured retail sales), midsize companies ($1 billion to $5 billion), and large companies
(more than $5 billion). Making it onto one of the three lists signifies that a company has performed at
the top of its class during the past year and has growth momentum in the marketplace.
Topping the growth-leader list of large companies for 2014 are Johnson & Johnson, Mondelēz
International, and PepsiCo. The leaders among midsize companies are Mead Johnson Nutrition, Keurig
Green Mountain, and Monster Beverage Corporation. Among small companies, Teva, SkinnyPop
Popcorn, and Kind lead the list.

2
Growth metrics
We combined three important market metrics to create a
composite growth index
Decomposition
Growth contribution due to
distribution versus
productivity
Percentage of portfolio that is
gaining, holding, and losing
share1
Category dynamics (for
example, category trends and
portfolio concentration)
Growth due to volume
versus pricing
Price increases are analyzed
by true price versus mix shift
Each metric is important, but each is insufficient on its own;
therefore, we created a composite growth index
1Gaining share = gaining 0.5 or more share points; holding share = gaining less than 0.5 share points or losing less than 0.5 share points; losing share = losing 0.5 or more share points.
Source: BCG and IRI analysis.
Dollar sales percentage
change
Volume sales percentage
change
Dollar share
point change

3
Large, midsize, and small growth leaders in U.S. CPG
Rankings are based on 2014 growth composite index within each size group
1
2
3
4
5
6
7
8
9
10
New to list since 2013
Note: Extra small = less than $100M 2014 sales; small = $100M–$1B 2014 sales; midsize = $1B–$5B 2014 sales; large = more than $5B 2014 sales; excludes private-label sales.
Source: IRI data for MULOC (multioutlet and convenience) 2013–2014; IRI and BCG analysis.
Large companies Midsize companies Small companies
Johnson & Johnson
Mondelēz International
PepsiCo
The Hershey Company
Unilever
Campbell Soup Company
The Coca-Cola Company
Procter & Gamble
Lorillard Tobacco Company
Reynolds American
1
2
3
4
5
6
7
8
9
10
Mead Johnson Nutrition
Keurig Green Mountain
Monster Beverage Corporation
Link Snacks
Starbucks Coffee Co.
Land O’Lakes
Gruma
Constellation Brands
WH Group
Sanofi-Aventis U.S.
1
2
3
4
5
6
7
8
9
10
Teva
SkinnyPop Popcorn
Kind LLC
Eos Products
Talenti
Schreiber Foods
All Market
Panera Bread
Materne
Advanced Beauty

4
Top four large companies primarily grew across all three
levers, but had limited share growth
Rank Parent company
Sales ($)
Change (%)
Volume
Change (%)
Share ($)
Change (%)
Overall
weighted
score
1 Johnson & Johnson 4.7 3.2 0.3 1.7
2 Mondelēz International 1.6 1.3 0.3 1.0
3 PepsiCo 2.7 1.6 0.0 0.9
4 The Hershey Company 3.2 1.2 0.0 0.9
5 Unilever 1.9 -0.3 0.3 0.8
6 Campbell Soup Company 0.9 2.2 -0.1 0.6
7 The Coca-Cola Company 1.7 -0.5 0.2 0.6
8 Procter & Gamble 0.8 -0.9 0.2 0.5
9 Lorillard Tobacco Company 1.1 -1.0 0.0 0.3
10 Reynolds American 1.2 -2.2 0.1 0.2
Lowest value Highest value50% percentile
Company new to list since 2013 Position change versus 2013
Source: IRI data for MULOC (multioutlet and convenience) 2014; BCG and IRI analysis.

5
Most winning midsize companies grew across all three
levers and gained significant share
Rank Parent company
Sales ($)
Change (%)
Volume
Change (%)
Share ($)
Change (%)
Overall
weighted
score
1 Mead Johnson Nutrition 11.4 8.2 3.1 2.9
2 Keurig Green Mountain 9.8 14.3 0.9 1.6
3 Monster Beverage Corporation 8.5 8.0 1.2 1.5
4 Link Snacks 14.6 9.8 0.5 1.4
5 Starbucks Coffee Co. 12.2 8.1 0.6 1.2
6 Land O’Lakes 13.0 4.2 0.6 1.1
7 Gruma 6.0 4.7 1.0 1.1
8 Constellation Brands 9.4 7.4 0.3 0.9
9 WH Group 11.8 0.8 0.6 0.9
10 Sanofi-Aventis U.S. 17.9 -14.1 1.1 0.9

6
Winning small companies did not sacrifice volume for value
growth and gained significant share
Rank Parent company
Sales ($)
Change (%)
Volume
Change (%)
Share ($)
Change (%)
Overall
weighted
score
1 Teva 88 101 11.3 8.6
2 SkinnyPop Popcorn 165 167 0.3 4.5
3 Kind LLC 106 133 2.3 4.3
4 Eos Products 62 57 3.6 3.4
5 Talenti 82 83 1.1 2.7
6 Schreiber Foods 90 93 0.3 2.4
7 All Market 33 39 2.8 2.3
8 Panera Bread 76 70 0.8 2.2
9 Materne 48 49 1.9 2.2
10 Advanced Beauty 32 31 2.3 1.9

7
Common themes among winners
Industry context
• Growth of U.S. CPG industry accelerated slightly in 2014 (2.1% versus 1.6% in 2013)
• Reduction of traditional barriers to entry created opportunities for small companies
• Small and midsize companies stole share from large companies in 2014
– Small and midsize companies stole 0.7 points in 2014 and 2.0 total points since 2009, worth $4.5
billion and $18 billion, respectively
– Only 6 of 23 large companies grew market share; the greatest share growth was +0.3 points
Winners capitalizing on key industry trends
• Macrovolatility and inflation in protein costs, creating pricing opportunities in food and beverage (F&B)
• Consumers accelerating trading up and down, creating premium and value growth
• Population and spending growth in three key demographics: seniors, Millennials, and Hispanics
• Consumers looking to break the F&B compromise among health, taste, and convenience
• E-commerce expansion to grocery creates growth opportunities for early movers
Other observations on the winners
• Growth is possible for all: the lists consist of many sizes, categories, and price tiers
• Small and midsize winning companies tend to turn over after one or two years, with a couple of notable
exceptions (Monster Beverage and Keurig Green Mountain)
• Winners drive growth primarily through distribution gains and enhancing the mix rather than price increases
Source: IRI and BCG analysis.

8
Growth picked up for CPG in 2014
2.1
1.6
3.0
4.1
1.9
0.0
1.5
3.0
4.5
Change in dollar sales versus prior year (%)
2013 20142010 20122011
Source: IRI Total Store Advantage ILD; point-of-sale data ending December 28, 2014; IRI and BCG analysis.
Total store sales in the U.S.

9
Smaller players growing faster, capturing share from large;
small companies stealing majority of share points in 2014
Share change
2009–2014
Sales ($)
CAGR
2009–2014
---
+2.3%
Extra small +0.6 pt +3.5%
Small +0.6 pt +3.1%
Midsize +0.8 pt +3.0%
Large
-2.0 pt +1.5%
1 share point worth ~$6.4B in 2014
54.2 54.1 54.2 53.4 52.9 52.2
21.2 21.4 20.7 21.8 21.8 22.0
14.9 14.9 15.5 15.0 15.2 15.5
9.7 9.7 9.6 9.8 10.1 10.3
0
25
50
75
100
Sales ($), total (%)
201420102009 201320122011
-0.7
+0.2
+0.3
+0.2
Note: Extra small = less than $100M 2014 sales; small = $100M–$1B 2014 sales; midsize = $1B–$5B 2014 sales; large = more than $5B 2014 sales; excludes private-label sales; numbers
may not match because of rounding.
Source: IRI data for MULOC (multioutlet and convenience); BCG and IRI analysis.
$576B $583B $604B $623B $632B $644B
About $18 billion in industry sales has shifted
from large companies to smaller players since 2009

10
Winners create demand, enabling growth across all levers
All others
Winners
DistributionVelocity Price/mix
L
M
L
M

11
Key takeaways for CPG executives
Understand the drivers of your growth versus those of industry peers to determine
where you are advantaged and where you need to improve
Identify the key trends affecting your categories, and position your portfolio ahead of
tailwinds
Strategically leverage pricing to enhance volume growth, and avoid using pricing as
a tactic for driving dollar value growth in the face of declining volumes
Expand how you define your competitive set to include small and extra-small
upstarts that have disproportionately gained market share in your categories
Compete like a start-up, gaining access to emerging e-commerce channels and fully
leveraging digital media
✓
✓
✓
✓
✓
Source: IRI and BCG analysis.

12
Madeleine Desmond
Senior Media Relations Specialist
The Boston Consulting Group
desmond.madeleine@bcg.com
+1 212-446-2856
Shelley Hughes
Vice President of Public Relations
IRI
ShelleyL.Hughes@IRIworldwide.com
+1 312-474-3675
To request an interview
Authors Media contacts
Dr. Krishnakumar (KK) Davey
President, Strategic Analytics
IRI
Dan Wald
Partner
The Boston Consulting Group

2014 Growth Leaders in U.S. Consumer Packaged Goods

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2014 Growth Leaders in U.S. Consumer Packaged Goods