This overview of the global consumer product industry looks at the impact of the global economy on the consumer product industry and serves to unpack merger and acquisition and market capitalisation trends that affect the sector.
Global Powers of Consumer Products 2014
Given the global economic challenges faced by consumer product firms, the top 250 largest global consumer product firms still managed to generate fair returns, generating sales in excess of $3.1 trillion measure from fiscal year of June 2012 to June 2013.
Rising cost in raw materials and a bleak economic outlook curbed companies growths rates when compared to previous financial years however economist found encouraging signs of stability due to the posting of strong profitability figures.
The report found that well funded investors continued to source merger and acquisition opportunities which is highlighted by the completed M&A deals listed below:
2012 : 1298 deals completed
2011: 1274 deals completed
2010: 1117 deals completed
The growing trend of such deals are found to be stimulated by low interest rates, increased credit availability, rejuvenated capital markets and in some cases sizable cash reserves held by firms which is surprising due to slow growth of the global economy.
Regional Trends indicated that African/Middle east companies lead the list for highest posted gains with a composite growth of 16.9% when compared to 16.8% and 5.6% growth rate of Latin American and Asian Pacific companies respectively. North American companies’ growth rates fell by 4% however it was found that they enjoyed robust profitability gains.
In order to manage and grow profits firms must look to diversify their approach into dealing with the constantly connected consumer. Global connectivity is on the rise and firms must meet growing consumer demands by adopting new strategies which include the use of end-to-end global supply chains, virtual market entry strategies, direct-to-consumer channels to name but a few.
An African Viewpoint
There is notable absence of African headquartered Consumer Product Companies from the report. This is largely due to the fact that these companies are either listed on a foreign stock exchange or that due to unfavourable currency exchange rates they are unable to meet the sales threshold of US $3000 million.
Deloitte South Africa will be releasing an African Powers of Consumer Products report later in the year which will look into the potential of African consumer product firms
If you have any questions or require a more detailed discussion, feel free to contact Rodger George (Africa Consumer Business Leader) at email@example.com or Clinton Houston (Consumer Product Specialist) at firstname.lastname@example.org.