Consumer products industry rebounds in fiscal year 2010 despite continuing economic malaise

Emerging markets will continue to present the highest growth opportunities for consumer products companies in 2012

Diegem, 11 April 2012 - The 250 largest consumer products companies grew 8.4 percent in FY2010, nearly a 10 percentage point turnaround from the prior year's 1.2 percent decline, according to the new "Global Powers of the Consumer Products Industry report", published by Deloitte. According to the report, the top 250 generated combined sales of more than US$2.82 trillion in FY2010, a significant increase over FY2009, when sales totalled US$2.57 trillion. The only Belgian company in the ranking remains AB-Inbev – after having climbed 18 places last year to the 11th spot, AB-Inbev now loses 1 spot and strands on the 12 place. Even though the economic environment in 2012 will be difficult, the long-term global outlook remains promising. Particularly, leading emerging markets, such as India, Brazil, Turkey and Indonesia all offer consumer products companies the possibility of stronger growth and new opportunities. The upcoming year, Consumer Product Companies will increasingly have to take into account and incorporate product innovation and effective pricing strategies.

Fiscal 2010 was a strong year for consumer products companies despite the continued volatility in the markets due to the Eurozone debt crisis, continued troubles in the U.S. housing market, and the slowdown in China. Koen De Staercke, Consumer Business Industry Leader at Deloitte Belgium, indicates: "One positive effect of slower global growth for consumer products companies will be the continued dampening of commodity prices. Moreover, in many of the slowing markets, a disproportionate share of the growth of consumer income is accruing to the relatively affluent. Hence, for companies targeting upscale consumers, the environment might not be so bad. For those targeting everyone else, the ability to offer low prices to uncertain consumers will be a clear competitive advantage".

Top 250 Consumer Products Companies: Samsung remains at the top

According to the report, average sales volume for the Top 250 companies increased to US$11.3 billion in FY2010 from US$10.3 billion in FY2009. Among the top performing sectors were fashion and the tire industries. The fashion goods sector posted the strongest composite sales growth in FY2010 at 14.2 percent —a huge turnaround from a 5.3 percent drop in sales in FY2009. In line with a rebound in auto sales, tire manufacturers made a significant comeback, with eight out of 10 tire manufacturers surveyed experiencing a double-digit growth in sales.

The only Belgian company ranked in the Top 250 remains AB-InBev at place 12, down 1 place on the ranking compared to 2011. AB-Inbev had a net profit margin 15,9% in 2010. In the Top 20, only Nestlé, Apple and The Coca-Cola Company do better.

Trends in the Consumer Products Market

In 2012, most of the consumer products companies on the top 250 list will continue to seek global growth opportunities, pursue business model innovations to win with consumers and customers, and establish more effective ways to manage uncertainty. Koen De Staercke: "With the economic crisis in Europe, increasing social unrest in various regions and elections in several developed markets, 2012 will present an unstable environment for consumer products companies. Leaders will, however, continue to pursue both top-line and margin growth".

To download a copy of the 2012 Global Powers of the Consumer Products Industry go to www.deloitte.com/consumerbusiness