Global powers of consumer products 2010 survey

Sales growth and profits fall as recession hits consumer products companies

Brussels, 2 March 2010 — One in five of the world’s largest consumer product companies recorded a loss in FY 2008 (encompassing years ending 30 June 2009), according to a new report from Deloitte. The Deloitte “Global Powers of the Consumer Products Industry” report ranks the 250 largest consumer product companies by net sales and reveals that 44 of the 222 companies that disclosed profit/loss figures operated at a loss. This compares with just 13 of 223 companies in FY 2007. Eighty-eight of the top 250 experienced a declining sales growth rate, with 32 of them suffering declining sales and recording a loss. The only Belgian company ranked in the Top 250 remains AB-InBev at place 29. They climb four places, leaving Heineken (33) and SABMiller (41) behind.

Koen De Staercke, Consumer Business Industry Leader at Deloitte Belgium, comments: “Consumer product companies faced an extremely challenging environment during FY 2008 as economic conditions depressed demand for consumer goods. Manufacturers of apparel, home improvement products, electronics and other household goods were hit hardest by consumer spending cuts. Companies in the food, drink and tobacco sector fared much better. Economic recovery will return the industry to a growth path, but the nature and geographic distribution of that growth will be quite different from recent years.”

Strongly differing performances around the world

According to the report, the top 250 consumer product companies grew at a rate of 4.8 percent in FY 2008 to take total sales to $3.2 trillion, up from $3 trillion in 2007. There were strongly differing performances around the world with Japanese companies seeing a huge downturn in sales growth from 7.9 percent in 2007 to -6.7 percent in 2008. Profitability also entered negative territory at -0.3 percent, compared with 4 percent the previous year. 

European companies fared better, growing by 5.7 percent and, within this group, the 11 UK-based companies performed particularly strongly, increasing their growth rate from 7.9 percent to 9.6 percent and enjoying the highest profit margin of any region, at 9.6 percent.

However, it was Latin America that enjoyed the strongest sales growth in 2008 with the region’s nine companies growing at an average rate of 30 percent. Brazil provided two of the world’s fastest growing consumer product companies in the world with JBS S.A. (114.5 percent) and Perdligāo (71.8 percent). US firms accounted for 92 of the top 250, or 35.9 percent of total sales. Despite operating in one of the most volatile and uncertain economic environments in recent history, US consumer product manufacturers’ combined sales grew 4.9 percent, an increase on the 3.8 percent growth achieved in 2007.

AB-InBev only Belgian company in top 250

The only Belgian company ranked in the Top 250 remains AB-InBev at place 29. They climb four places, leaving Heineken (33) and SABMiller (41) behind. Even in a challenging year, a sales growth of 11.6% was achieved. Specifically for the Food, Drink & Tobacco product sector, the purchase of Anheuser-Busch bij InBev helped put AB-InBev in tenth place, displacing SABMiller.

Hewlett Packard the biggest

Hewlett Packard became the world’s largest consumer product company in FY2008, overtaking Samsung. However, this was strictly on the basis of a strong US dollar against the Korean won and Samsung’s sales actually increased at a significantly higher rate than its US competitor. The economic concentration of the top 10 fell in 2008 as six of the companies are manufacturers of electronics products, an industry that continues to suffer falling prices, and now, weak demand as well. Indeed, half of the ten largest consumer products companies in the world experienced negative sales growth this year. Swiss group Nestlé, with Belgian Paul Bulcke as CEO since April 2008, remains the biggest food group in the world.

# Company name  Country  Net sales FY08 (US$ million) FY08 net sales growth (%)
1 Hewlett-Packard Company US 118,364 13.5
2 Samsung Electronics Co., Ltd South Korea 112,804 23.1
3 Nestle SA 78 93 96
4 The Procter & Gamble Company US 79,029 -5.4
5 Panasonic Corporation (formerly Matushita Electrical Industrial Co., Ltd) Japan 77,655 -14.4
6 Nokia Corporation Finland 74,612 -0.7
7 Sony Corporation Japan 71,101 -13.3
8 Japan Tobacco Inc. Japan 68,323 6.6
9 Toshiba Corporation Japan 66,545 -13.2
10 Phillip Morris International Inc. US 63,640 N/A

Some of the report’s key findings include:

To download a copy of the 2010 Global Powers of the Consumer Products industry, please go to http://www.deloitte.com/be/consumerbusiness.