CPG Firms Grew Strong in Challenging Economy, Says GMA

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CPG Firms Grew Strong in Challenging Economy, Says GMA

U.S. consumer products manufacturers experienced 10.6 percent sales growth this past year and delivered a relatively strong shareholder return of 7.3 percent in 2007, despite a challenging economic climate, according to new research conducted by PricewaterhouseCoopers LLP for the Grocery Manufacturers Association.

Released today, the report, “The Food, Beverage and Consumer Products Industry: Achieving Superior Financial Performance in a Challenging Economy 2008,” stated that even in a difficult economy with ever-increasing commodities prices, agile consumer product companies can achieve growth by adopting successful practices in key strategic areas. 

One of key finding is that exposure from sustainability reporting in many cases can enhance a company’s bottom line and shareholder value.

“A particularly exciting finding of this year’s report was the strong effect that sustainability reporting can have on corporate value,” said Lisa Feigen Dugal, the North American consumer packaged goods and retail advisory leader for PricewaterhouseCoopers. “It’s well known that sustainability initiatives can be a great brand and reputation enhancer, but now we’ve discovered they’re much more.”

Speaking about the industry’s performance in 2007, Stephen Sibert, GMA s.v.p. for industry affairs, noted: “The consumer products sector showed incredible resilience this past year in the face of a tough economy, and we saw many companies using creative strategies to manage costs while delivering value to consumers. However, we see this difficult environment as likely to continue, which means that consumer goods manufacturers and retailers will be confronting new challenges, and they’ll need to stay nimble and initiate more collaboration in order to continue their growth.”

Large food companies attribute 45 percent to 55 percent of their products’ price to raw material costs, and the industry is not likely to see relief soon, according to the report. The GMA-PwC study reveals how companies can harness the same forces driving up input costs to enhance financial performance.  

"While there is no 'one size fits all' solution to the economic challenges facing CPG makers, we believe our report highlights successful practices that any company can adopt to achieve superior performance," said John Maxwell, consumer packaged goods and retail industry leader for PricewaterhouseCoopers. Among his suggestions for success: “CPG companies need to collaborate with retailers in innovative ways to continue to provide value to the consumer." 

The Food, Beverage, and Consumer Products Industry: Achieving Superior Financial Performance in a Challenging Economy 2008 will be presented via webcast by PricewaterhouseCoopers and GMA on June 10 at 11:00 a.m. EDT. For registration information, visit www.meetpwc.com/GMAPwCWebcast.