IRI, BCG Rank Strongest Growth Brands

Top companies focus on base businesses and growing volume to drive sales

CHICAGO -- New research from The Boston Consulting Group (BCG) and Information Resources Inc. (IRI) finds that the pace of share loss has slowed for large companies in the U.S. consumer packaged goods (CPG) industry, though the same companies continue to cede market share to smaller ones.

In this second-annual study of more than 400 CPG companies with annual U.S. retail sales greater than $100 million, BCG and IRI formulated a rank based on their growth performance using a combination of three metrics: dollar sales growth, volume sales growth and market share gains.

The top three large companies that show the strongest growth momentum, according to the study, are The Hershey Co., Lorillard and Mondelez Intl. The No. 4 spot is held by Campbell Soup Co., followed by Procter & Gamble.

Among midsize companies, Green Mountain Coffee Roasters Inc. and Chobani hold the No. 1 and No. 2 spots, respectively—as they did last year—followed by McKee Foods, Sterilite and Monster Energy Co.

Kind was ranked as the top small company, followed by Paris Presents, TalkingRain (parent company of Sparkling Ice), Old World Industries and Idahoan.

To make the list, a company must perform at the top of its class over the past year and have growth momentum in the marketplace, with “small” being classified as a company making $100 million to $1 billion, “midsize” earning $1 billion to $5 billion, and “large” bringing in more than $5 billion.

“The 2013 rankings show the importance of maintaining a focus on the base business,” said Dan Wald, a partner at BCG, in a statement released by both firms. “The winners innovated, but they innovated to complement their base business, not replace it.”

Overall, the U.S. CPG market expanded by just 1.5% in 2013, down from the 2.8% growth rate of 2012. A key reason: companies were more restrained than in the past when it came to raising prices.

That headwind, however, did not slow the small and extra-small (less than $100 million in sales) players, which collectively grew 4.3% in 2013. Large companies lost 0.5 percentage points in market share in 2013, mostly captured by extra-small companies. In total, since 2009, large players have ceded 2.3 share points to midsize, small and extra-small companies, representing $14 billion in lost sales.

Despite a decline in their overall share, large companies collectively performed better in 2013 than in 2012. This is especially true for the five top-ranked large companies, which broke away from the pack in 2013 and recaptured market share. Improvements were largely driven by a renewed focus on delivering volume growth instead of raising prices to achieve short-term gains in dollar sales.

“It is important to note that the large-company winners are using multiple tactics to drive volume growth, such as garnering more shelf space with the right assortment and revenue management,” said Dr. Krishnakumar (KK) Davey, managing director at IRI Consulting. “However, small players are clearly discovering new pockets of growth within mature categories, so it’s imperative for all companies to spot trends quickly and capitalize on them.”