Global powers of cp 2012 deloitte

Global Powers of
Consumer Products 2012
Connecting the dots

Contents

Global economic outlook 2

Industry trends 8

Top 250 highlights 15

M&A activities and trends 38

Q ratio analysis 43

Consumer Business contacts 45

Global Powers of the Consumer Products
Industry 2012

Deloitte Touche Tohmatsu Limited (DTTL) is
pleased to present the 5th annual Global Powers
of the Consumer Products Industry. This report identifies
the 250 largest consumer products companies
around the world based on publicly available data
for the companies’ fiscal year 2010 (encompassing
companies’ fiscal years ended through June 2011).
The report also provides an outlook for the global
economy, an analysis of market capitalization in the
industry, and a discussion of major trends affecting
consumer products companies.

Global Powers of the Consumer Products Industry 2012 1

Global economic outlook
The economic situation for consumer products companies
The global economy is decelerating, with growth in However, consumer products suppliers may
2012 likely to be slower than in 2011 in many of the find some silver linings in this otherwise cloudy
world’s leading markets. environment. One positive effect of slower global
growth will be continued dampening of commodity
In Europe, the crisis of the euro has led to the seizing prices. Meanwhile, a number of countries are seeing
up of credit markets. In an effort to rebuild investor higher retail price inflation. These include several in
confidence, governments across the continent are Western Europe, the U.S., Japan, and many leading
cutting spending and raising taxes, the net effect of emerging markets.
which is to weaken economies and, in the process,
undermine confidence even further. While the Combined with stagnant input prices, this suggests
European Central Bank has helped the situation by the possibility of improved profit margins, even in the
massively lending to commercial banks, the risk of context of slow top line growth.
failure by Greece continues to dog financial markets
despite a recent agreement on a second bailout. Another silver lining is that, in many of the slowing
While there is little short-term risk that the Eurozone markets, a disproportionate share of the growth
will fail, the situation is having a negative impact on of consumer income is accruing to the relatively
growth. affluent. This is especially true in the United States
and China. Hence, for those companies targeting
The United States shows signs of accelerating upscale consumers, the environment might not be so
economic activity. Yet trouble in the housing market bad. As for those targeting everyone else, the ability
and its impact on credit markets continues to restrain to offer low prices to uncertain consumers will be a
economic growth. While the U.S. economy may clear competitive advantage.
accelerate in 2012, it will probably not lead to a rapid
drop in unemployment. Finally, the most significant silver lining is the long
term. Even though the economic environment in
The world’s second-largest economy, China, is 2012 will be difficult, the long-term outlook for the
slowing following a tightening of monetary policy global economy remains good. Global growth in
combined with the negative effects of slow growth the coming decade is expected to be strong, with
in Europe and the United States. While monetary particular strength coming from leading emerging
policy has been reversed, 2012 will likely see the markets other than China. Of course China will grow,
slowest growth in China in a decade. In addition, the but as discussed later, it faces some headwinds, both
remaining BRICs face slower growth resulting from demographic and structural. Yet other emerging
the lagged effects of tight monetary policy and weak markets such as India, Brazil, Turkey, Indonesia, the
global growth. Andean region of South America, and much of sub-
Saharan Africa offer new the possibility of stronger
Only in Japan is economic growth in 2012 widely growth and new opportunities.
expected to exceed that of 2011. The reason is
that 2011 was so awful following the devastating
earthquake and tsunami. Plus, reconstruction
expenditures are likely to provide a temporary jolt to
the Japanese economy.

In an effort to rebuild investor confidence, governments across the
continent are cutting spending and raising taxes, the net effect
of which is to weaken economies and, in the process, undermine
confidence even further.

2

Let us now consider the outlook for the world’s Following the summer of 2011, Europe’s governments
leading markets: agreed on various measures to calm markets, but to
no avail. However, late in 2011 the European Central
Western Europe Bank engaged in massive lending to commercial
Given that this publication will be distributed through banks. This improved bank liquidity, removed the
calendar year 2012, it is difficult to provide a helpful threat of bank failure, and drove down sovereign
roadmap to a situation that, as of this writing, is bond yields – thereby helping troubled governments
changing daily. So perhaps it is best to look back at to improve their finances. Yet commercial banks
how it came to this. mostly hoarded the cash they borrowed and,
therefore, did not improve credit market activity. By
The Eurozone project was intended to bind the early 2012, European governments agreed on a new
economic and political fortunes of Europe’s bailout package for Greece that entailed banks taking
economies in perpetuity. Yet the architecture of this a haircut on Greek debt. While this removes the
union was always lacking. Countries were required immediate danger of default, the situation in Greece
to maintain fiscal discipline, but there was never a remains troubling. In addition, commercial banks
credible vehicle for ensuring this. The first countries were required to raise capital, most likely by reducing
to violate the rules were Germany and France and it lending and selling assets. This will have the effect
is not surprising that others soon violated the rules. of damaging credit market activity. Thus, as of this
writing, the situation in Europe has been temporarily
Indeed, the existence of the euro enabled the calmed but is by no means settled.
countries of Southern Europe to borrow with
abandon. Investors were happy to extend credit There are three possible scenarios as to what might
at low interest rates in the expectation that bonds happen next. In the first, Europe agrees to engage in
denominated in euros were a safe asset. greater integration in order to avoid disintegration.
This could entail using the European Central Bank
Yet an absence of fiscal rectitude alone was not (ECB) to backstop sovereign debtors and create a
the biggest problem. The biggest problem was fiscal union with large transfers of resources from
that several Mediterranean economies lost their richer to poorer nations within the union. This would
competitiveness. Over the past decade, their enable the Eurozone to succeed and ultimately
wages rose far faster than their productivity, with prosper. The problem with this scenario is that it
the result that it became less feasible for them to requires individual countries to give up sovereignty
generate the strong export revenues needed to and to abide by conditions set by the richer countries
service their external debts. Normally, a country in the EU.
with a competitiveness problem will devalue its
currency. However, because these countries no
longer have their own currencies they cannot restore
competitiveness unless they dramatically accelerate Investors were happy to extend credit at low interest
productivity growth and/or cut wages – both a tall
order.
rates in the expectation that bonds denominated in
euros were a safe asset.
When Greece was unable to roll over its considerable
debts and the EU bailout was deemed insufficient to
The second scenario is that the Eurozone fails.
correct Europe’s ailments, investors became fearful.
While this could happen, the short-term costs of
Governments faced difficulty in rolling over debts,
disintegration would be catastrophic. It can be
and banks that held such debts faced problems
argued that, in the long run, some of the troubled
raising funds. Risk spreads increased, credit market
countries would be better off outside the Eurozone,
activity declined, and Europe faced a new recession.
but much of Europe would suffer grievously during
the transition.

The Mediterranean countries would face problems
in gaining access to global credit markets, while the
northern economies would see their currencies rise
rapidly, thereby hurting exports. Hence, this scenario
is politically problematic as well.


The $1.7 trillion in debts issued by local governments
China’s economy is decelerating, the result of to fund infrastructure has been a concern for some
time, but officials have downplayed the danger until
tighter monetary policy in 2011 and declining now. The fear is that multiple defaults without a
export growth. bailout from the central government, could damage
the health of China’s banks. How did this come
The third scenario, then, seems to be the most likely: about?
Europe manages to hold the Eurozone together but
fails to take action that would guarantee its success. When the global economic crisis began in 2008, and
This could be called the “muddling along scenario” China’s exports suddenly dropped, the government
and would likely involve a prolonged period of slow implemented a vast stimulus program to boost
economic growth, political turmoil, and periodic domestic demand and offset the drop in exports.
crises. Part of this involved extending credit to provincial
and local governments to engage in infrastructure
What does this scenario mean for consumer products development. In the short run, this policy was
companies? It means continued fiscal contraction successful in boosting growth and preventing a
across Europe, in part through higher taxes, and tight general recession. The problem, however, is that
credit market conditions. Consumer spending would many such investments have failed to generate
grow slowly, if at all. Consumers would be highly adequate returns. The Chinese government estimates
price sensitive and uncertain about the future. that little more than one quarter of local government
investment has produced a return adequate to
China service the debts.
China’s economy is decelerating, the result of
tighter monetary policy in 2011 and declining Local government borrowing is not the entire
export growth. In response, China’s central bank problem. During the global crisis, the government
has stopped tightening policy. Therefore, although injected capital into state-run banks so that they
China’s economy will slow in 2012, it will not could lend to state-run companies. The result was
necessarily slow dramatically. On the other hand, an investment boom. Yet this too involved many
it is notable that a senior Chinese official recently investments that are not producing an adequate
predicted that growth in 2012 would be below nine return. As a result, investment in fixed assets
percent. If so, it would be the first year since 2001 surged, reaching almost 50 percent of GDP last year.
that growth falls below nine percent. Interestingly, Meanwhile, consumer spending declined to about
there is evidence that the economic slowdown is 35 percent of GDP. Now that the Chinese economy is
being experienced principally by small to medium slowing, the risk exists that China’s debtors will soon
sized private businesses (especially those that export) face greater difficulties in servicing their debts.
and not by the large state-run enterprises that retain
favorable access to credit. As such, recent efforts to So is China at risk of having a financial crisis? The
provide more credit to small business may be helpful answer is yes and no. Yes, there is a danger that a
in stabilizing the economy. new round of defaults will damage the solvency of
China’s state-run banking system. Yet it is likely that
China’s officials have complained about the rapid the government would bail out such banks and,
expansion of U.S. government debt. This reflects thereby, prevent a larger financial crisis. Indeed the
fear that the massive stock of foreign currency Chinese government recently instructed banks to
reserves held by China’s government could lose simply roll over loans to local governments.
value. Less attention, however, has been paid to the
big increase in overall debt in China itself. Yet that China does, however, face a risk. Specifically, if the
is likely to change soon given the fact that overall government were compelled to bail out troubled
debt has nearly tripled in the past five years. Notably, financial institutions, it would probably not support
a top Chinese official recently said that the debt of continued lending for the purpose of poorly
China’s local governments is “our version of the U.S. conceived investments. Consequently, investment
subprime crisis.” would likely fall considerably. Given that investment
is now close to 50 percent of GDP, such a fall could
have serious consequences for GDP absent an
offsetting increase in something else. What could
that something else be?

4

Exports are not likely to take up the slack. Instead, United States
China will look toward a boost in consumer spending As of this writing, the U.S. economy is showing signs
to offset a decline in investment. Yet given that of modest strength. There is growth, but not the
consumer spending is now only kind that has followed past recessions when housing
35 percent of GDP, it would have to grow very made a sizable contribution to the recovery. Instead,
rapidly to make a difference and avoid a significant growth has been relatively anemic and the housing
economic slowdown. market remains troubled. Partly as a consequence of
this, credit markets have not been strong and bank
There are, however, some positive signs concerning lending has only begun to recover following a long
the prospect for consumer spending. First, wages slide. Moreover, the troubles in Europe could have
have been rising, adding to real disposable incomes. a negative impact on credit activity in the United
This reflects a shortage of labor, as demographic States.
trends limit labor force growth and as internal
migration slows. In addition, provincial and local Despite these headwinds, U.S. consumers continue
governments have been increasing their minimum to spend. This is a bit surprising given the various
wage. Second, the government intends to have state- negative influences they have faced. Unemployment
run companies pay higher dividends to shareholders is uncomfortably high at above 8 percent, real
(mainly the government). This money could be used disposable incomes have been declining over the past
to boost overall spending. Third, high inflation might year, and various measures of consumer confidence
spur more spending by consumers. Fourth, the have only recently recovered from historic lows. Yet
currency is gradually being allowed to rise in value. consumer spending has been rising. There are various
This reduces import prices and helps to stimulate explanations. First, consumers have substantially
consumer spending. paid down debts. Today, debt service payments
as a share of income are at the lowest level since
On the other hand, the biggest negative for 1993. Thus, consumer cash flow has improved. In
consumer spending is simple demographics. Due to addition, the increase in spending lately has been at
the lagged effect of the one child policy, the labor the expense of saving. The saving rate has declined,
force is expected to grow much more slowly in the suggesting a higher degree of confidence on the part
coming decade than it did during the past ten years. of consumers – despite what they tell survey takers.
As such, the prime consuming age cohort will barely Finally, it is likely that there is considerable pent-up
grow while the elderly population will grow rapidly. demand following a long dry period.

Finally, one side effect of China’s unbalanced Consumers may feel a bit more confident because
economy is a sharp increase in income inequality. the overall economy is showing signs of renewed
While incomes have increased overall, lower income strength – albeit modest strength. In the first half of
cohorts have not seen significant increases in 2011, economic growth was so anemic that many
purchasing power, especially as home prices have pundits worried that the United States was heading
increased dramatically. into a new recession. Today, fears of a double dip
have abated somewhat as growth has accelerated.
There are reasons to expect that in the coming Industrial activity has been rising moderately, with
decade China’s economy will grow more slowly than particular focus on production of capital goods.
in the past. Although consumer spending is likely to
increase as a share of GDP, it is not clear that it will In addition, exports have been strong. Although
be sufficient to create a consumer spending boom. export growth has decelerated somewhat as the
global economy has slowed, it remains strong and
contributes substantially to overall GDP growth. This
reflects the effects of a relatively weak dollar and the
There are reasons to expect that impact of a decade of sizable productivity gains for
in the coming decade China’s the manufacturing sector.

economy will grow more slowly
than in the past.


Finally, recent growth has been almost entirely For consumer products companies, the U.S.
due to increased demand for goods and services. economic environment is lukewarm. A reasonable
There has been little inventory accumulation and expectation for the coming year is that consumer
inventories remain historically lean. This is good news spending growth will be positive but modest, that
as it means that the increased output was mostly inflation will be low, that consumers will remain
due to increased demand. It also bodes well for the relatively price sensitive, and that commodity prices
future, as further increases in demand will require will be soft. It is also a reasonable assumption that, to
more production rather than dipping into existing the extent there are income gains, a disproportionate
inventories. share will accrue to upper income households. Thus,
spending growth will be bifurcated.
The impact of economic policy has been mixed. On
the one hand, monetary policy remains supportive of Japan
growth. Although the Federal Reserve is no longer Japan suffered grievously in 2011 due to the terrible
engaged in “quantitative easing,” it is engaged in a earthquake and tsunami. Aside from the unspeakable
policy designed to reduce long-term interest rates human cost, there was a big economic cost as
and, therefore, stimulate more credit demand. well. The sharp drop in electricity production and
While it is too early to say whether this has been the damage to transport infrastructure led to a big
effective, the decline in bank lending has reversed decline in industrial output. Not only did this lead to
and consumer willingness to take on new debt has a drop in Japan’s GDP, it had a global impact as well
increased substantially. The Fed has indicated that as much of the global automotive and electronics
it is open to another round of quantitative easing industry supply chains are dependent on Japan’s
should the economy generate disappointing growth. participation.

Fiscal policy is a different story. During 2011, the While growth in the third quarter of 2011 was very
President and the Congress failed to reach an strong, the economy slid again in the fourth quarter
agreement on dealing with long-term budgetary – partly because of the impact of Thailand’s floods
issues. This resulted in the first ever downgrade of on industrial supply chains. Going forward, the
the U.S. government. Although the bond market Parliament has allocated the equivalent of US$240
yawned at this news, it probably had a negative billion on reconstruction, most of which will be spent
impact on business confidence. However, if the in the coming year and-a-half. This should have a
Congress does absolutely nothing, the budget deficit positive impact on growth in 2012.
will decline considerably. That is because, under
current law, taxes are scheduled to rise considerably Still, Japan faces some challenges. First, it is likely
at the end of 2012 yielding nearly $3 trillion over that the reconstruction spending will be financed
ten years. In addition, there have already been $2.2 in part by higher taxes on consumers, and this will
trillion in spending cuts built into future budgets. probably have a negative impact on the consumer.
Thus, the real issue facing the Congress is how to Second, Japan remains highly dependent on exports.
eliminate those tax increases and find offsetting Yet the value of the yen is at an historic high and is
reductions in future budget deficits. not expected to come down. Moreover, as the global
economy slows, export growth is likely to decelerate.
In addition, because the earthquake damaged
nuclear generating capacity, Japan has had to import
A reasonable expectation for the coming year is that oil and gas to close the gap. This has resulted in a
large trade deficit, hurting economic growth.
consumer spending growth will be positive but
modest, that inflation will be low, that consumers Finally, although Japan’s central bank has engaged
will remain relatively price sensitive, and that in a more aggressive monetary policy, this alone
commodity prices will be soft. may not be sufficient. The goal of such a policy is
to increase inflation, reduce real interest rates, and
stimulate more spending and credit market activity.
Yet as of this writing, inflation remains very low,
consumer spending is anemic, and credit market
activity is poor. Absent a more aggressive policy,
it is likely that Japan’s economy will grow slowly
following the end of reconstruction spending.

6

India Brazil
Indian distribution briefly made global headlines As in much of the emerging world, Brazil’s
when the government announced it had changed policymakers have quickly shifted from a focus on
the rules regarding foreign investment in retailing. excessive inflation toward a focus on growth. In
Multi-brand foreign retailers would be permitted to the first half of 2011, Brazil was growing rapidly
own up to 51 percent of an Indian retail enterprise. In and experiencing uncomfortably high inflation. The
the long-term, this would have a positive impact on central bank raised interest rates, which resulted in
economic growth and could lead to a rationalization a sharp rise in the value of the currency and harmed
of the supply chain, greater supply chain efficiency, export competitiveness. Yet by the second half of
and greater effective spending power for consumers. the year, with domestic demand decelerating and
It would also be beneficial to the world’s leading exports being harmed by slower global growth, the
retailers as they continue to seek global opportunities central bank shifted and cut interest rates.
beyond the Chinese market. However, facing serious
opposition, the government backed down and Going forward, Brazil is likely to have modest
withdrew the planned liberalization. At this writing, growth in 2012 and declining inflation. Interestingly,
it is not clear whether and when this proposal will be consumer spending has held up well despite the
offered again. economic slowdown. This was due in part to
continuing growth of consumer credit. While positive
The short-term outlook for India is a bit cloudy. The for spending, this credit expansion does pose a risk to
country’s economy is clearly slowing following a the economy and especially to the banking system.
period in which monetary policy was tightened in
order to fight inflation. The problem is that although Longer term, the prospects for Brazil’s economy
the monetary tightening resulted in slower economic and consumer sector are very good. With a youthful
growth, it did not bring inflation down. Now population, favorable economic policies, and sizable
policymakers are faced with the conundrum of slow foreign direct investment, growth should be strong.
growth with persistent inflation. In addition, roughly half of Brazil’s exports are now
manufactured goods. This is a big change from the
That said, India is relatively immune to the problems past when Brazil was largely a commodity exporter
in the global economy. That is because trade is a and it suggests a less volatile future. Improving
modest share of GDP in India. In addition, India’s income distribution and the rapid rise of the middle
financial sector is not highly exposed to the troubles class also bode well for continued growth of modern
in European credit markets. Thus, even a worsening retailing.
of the situation in Europe is not likely to have a big
negative impact on India. Russia
Russia’s growth has been moderately strong lately
Longer term, India’s prospects are good. The country owing to the strength of commodity prices. In
has a youthful population, which bodes well for addition, there are indications of greater openness to
growth and consumer spending. Economic policy has foreign investment in the commodity sector, which
been supportive of growth through deregulation. In would offer the possibility of increased commodity
addition, India’s capital markets have funneled credit production. Yet Russia’s continued dependence on
to entrepreneurs, contributing to growth. However, commodities makes it vulnerable to volatile prices.
India has obstacles. These include a high degree Russia is also highly dependent on Western Europe,
of trade protection, continuing regulation of labor and a deepening crisis there would have a strong
markets, and uncertainty regarding the future of negative impact on Russia.
policy.
As long as the economy grows, Russian consumer
spending has good prospects, at least in the largest
cities where a disproportionate share of spending
power exists. On the other hand, a declining and
aging population means that longer-term prospects
are not great. And a failure to diversify away from
commodities puts the consumer sector at the mercy
of forces beyond the control of Russia’s authorities.


Global trends and issues affecting the consumer
products industry in 2012
In 2012, most of the consumer products companies Over the past few years, consumer products
on the top 250 list will continue to seek global companies have learned some valuable lessons
growth opportunities, pursue business model about global expansion and growth. While
innovations to win with consumers and customers, emerging markets will continue to be the engine
and establish more effective ways to manage of growth thanks to an increasing middle class
uncertainty. With the economic crisis in Europe, and domestic consumer demand, capturing this
increasing social unrest in various regions and growth comes with significant challenges. Firstly,
elections in several developed markets, 2012 will understanding the consumer in each of these markets
present an unstable environment for consumer (and in some cases in each region within a market)
products companies. Leaders will, however, continue is a task that cannot be underestimated. Local
to pursue both top-line and margin growth. tastes, preferences, and affordable price points have
According to a recent report from Forbes Insights1, huge implications for how products are developed,
38 percent of senior executives view “improving manufactured, and promoted. With increasing
top- and bottom-line performance” as their top advertising costs in many emerging markets,
strategic priority, followed by “expanding into global consumer products companies will also continue to
and new markets” at 33 percent. Key emerging seek optimal ways of allocating marketing investment
markets will continue to present the highest growth across multiple channels. For example, word of
opportunities for consumer products companies, mouth campaigns seem to generate the highest ROI
with countries such as Brazil, China, and India driving in Asian markets, but they are extremely difficult to
global GDP growth. This global growth agenda will execute successfully without local market knowledge.
result in strong corporate M&A activity, proactive Secondly, intense price competition, wage inflation
management of category and brand portfolios, and and the cost of real estate in emerging markets put
significant investments outside the core developed great pressure on margins and profitability. Consumer
markets that are home to most of the world’s leading products companies will continue to evolve their
consumer products companies. business and commercial operating models in order
to be successful and profitable. Product innovation,
combined with effective pricing strategies, will be key
areas of focus for the companies that will succeed
in 2012 and beyond. Finally, managing global talent
In 2012, most of the consumer products companies is becoming a key priority for consumer products
on the top 250 list will continue to seek global companies and will be a prerequisite for achieving
growth opportunities, pursue business model successful global growth. Recent research from the
Deloitte member firm in the United States found that
innovations to win with consumers and customers, nearly one in four executives (23 percent) surveyed
and establish more effective ways to manage cited competing for talent globally and in emerging
uncertainty. markets as a top talent concern2. When asked to
look forward three years from now, the global talent
search rises even higher on the agenda to 27 percent.
Global mobility initiatives, training and competency
development programs, and cross-border canters
1 Forbes Insights’ Survey
‘ of excellence will continue to dominate the talent
of 376 senior executives
and talent managers at agenda for consumer products companies in 2012.
large companies (annual
sales of +$500 million)
worldwide; Forbes,
October 2011

2 Talent Edge 2020:
‘
Redrafting talent
strategies for the uneven
recovery’; Deloitte
Development LLC,
January 2012

8

Consumer products companies will continue to evolve, and in some
cases rethink their operating models in order to be competitive in the
global marketplace.

Consumer products companies will continue to Use analytics to inform where to play and how
evolve, and in some cases rethink their operating to win
models in order to be competitive in the global One of the biggest challenges that consumer
marketplace. Changes in governance models, products companies will face in 2012 will be the
including corporate structures and decision-making growing need to strengthen the skill-sets, tools, and
hierarchies, will continue to evolve to meet the processes that enable them to convert data into real
need for de-centralized and real-time decisions insights in an effective and timely manner – and
aligned with wider business and brand strategies. to use those insights to inform business decisions.
Functional processes and procedures will also Depending on geography, consumer products
need to evolve. Marketing and sales investment companies are faced with either a plethora or a
allocation rigor, proactive financial stewardship, and lack of data. Countries with concentrated modern
sustainable practices throughout the value chain will trade usually have an abundance of consumer,
increasingly become business as usual. Commercial shopper, and customer data. By contrast, in most
transformation will become a higher priority in the emerging markets dominated by a traditional retail
consumer products sector as businesses grapple with trade this data either does not exist or is at best far
the need to rethink traditional marketing and sales from complete. Consumer products companies will
models to meet the needs of a radically different continue to invest time and effort in analyzing ‘data’
business and consumer environment. to track changing value and profit pools in and across
markets and to understand trends, behaviors, and
The companies that get it right will rise to the patterns of activity that provide the insights needed
top and become global leaders in the increasingly to achieve and sustain competitive advantage.
interconnected consumer business landscape. More than ever, consumer products companies
The magnitude of the untapped opportunity goes that best integrate and use consumer, shopper,
beyond much-discussed general trends such as the and customer insights to drive strategic and tactical
rising middle classes in emerging markets and innovation and optimize engagement with individuals
the increasing importance of social media. throughout the journey to the point of purchase will
The true opportunity lies in connecting the dots in ultimately win at the shelf.
an increasingly complex consumer and customer
ecosystem and winning over the ever-changing Winning at the shelf – physical or virtual – also
hearts and minds of consumers and shoppers with requires constructive collaboration with the retailer.
products and value propositions relevant to their Consumer products companies will continue to
individual situations. seek strategic alliances with retailers based both on
quantitative factors such as current and projected
These themes, and how consumer products profitability, as well as qualitative factors such as
companies can respond to them, are explored in alignment of strategic objectives, compatibility of
more detail in the paragraphs that follow. supporting tools and processes, and cultural fit.
While often fraught with tension, such relationships
will be crucially important.


At the corporate level, consumer products companies As shoppers make the switch from branded to
will continue to leverage scenario planning and private label products, the study also found that
econometric modeling to better manage macro- about 93 percent of them expect to continue
economic and political uncertainty. Indeed, leading ‘spending cautiously’ on private label products,
consumer products companies are becoming more even after the economy improves. Unlike previous
sophisticated in establishing global Enterprise Risk economic recessions that caused temporary changes
Management governance, processes, and systems. in shopping habits, this prolonged recession may be
Businesses are beginning to quantify drivers of value turning frugal shopping habits into more permanent
at risk that have previously not been quantified, consumer behavior.
such as the impact of increasingly stringent product
regulation. Not surprisingly, many leading consumer More consumer products companies are taking
product companies are evaluating the impact the view that part of the answer to the margin
of structural changes in the Eurozone and their challenge lies in revisiting product portfolios within
potential impact on areas such as pricing and supply the category. This process typically involves altering
chain management. consumer unit size and packaging types (pack type
is an important part of the consumer/shopper value
Use pricing as a strategic lever to win with equation), and developing a ranked good/better/
consumers, shoppers, and retailers globally best product portfolio, while also considering
Pricing has always been an area of focus for potential variants for specific consumer needs.
consumer products companies. However, the Changed category propositions of this sort are then
accessibility and transparency of pricing information tested with consumers and shoppers through a
to consumers and shoppers, as well as the global combination of qualitative and quantitative research
scale and power of major retailers, pose significant into what drives perception of value, typically using
challenges in the way consumer products companies analytics and modeling techniques to establish the
think about their pricing strategy. To manage pack/price/preference parameters that describe the
the increased complexity and margin pressures, determinants of consumer choice. The results of this
consumer products companies will increasingly use type of research and insight are then used to develop
the latest technological advances such as analytics a win-win category proposition for each retailer.
and pricing management tools to optimize consumer At the core of such a strengthened category
pricing and trade pricing, as well as to maximize the proposition is alignment of category strategy,
returns on investment from marketing and trade brand architecture, and pricing architecture – such
spend. alignment is critical in creating a stronger proposition
for the retailer and the consumer that offers real
Private label products will continue to be a significant up-side in category margin.
and growing competitor to branded consumer
products companies in 2012 and beyond. In many Use digital media as a key strategy to ‘own the
major markets around the world, private label consumer’ throughout their journey with your
penetration has increased as the global economic brand
recession continues to burden the world’s largest There is no doubt the rapid pace of digital media
markets. Since mid-2008, private label’s U.S. market growth has transformed the way consumers think,
share of total consumer products unit-volume has behave and interact with each other and with
grown by more than 16 percent from about businesses. However, most consumer products
18 percent in mid-2008 to over 21 percent in companies struggle with adapting their strategies,
January 2011. With private label in European grocery capabilities and internal processes to meet these new
representing more than a 45 percent share this may consumer needs. Consumers utilize digital and social
still have some way to go. Furthermore, a recent media throughout their purchasing journey – from
study demonstrated that roughly 85 percent of browsing, to product identification and comparison,
shoppers in the U.S. currently rate store brands as to purchasing, and post-purchase customer service.
3 The 2010 American
‘
Pantry Study’, Deloitte
equal in quality to national brands3.
Development LLC and
Harrison Group, 2010

10

The implications for consumer products companies
are huge – as is the opportunity to engage with
customers in an effective and timely manner to build
In 2012 and beyond, consumer products companies
long-term brand loyalty. More and more businesses will increasingly integrate sustainable practices into
are moving beyond thinking about digital media their core operating models throughout the value
as an additional and, perhaps, more effective, chain.
communication channel that allows for highly
personalized and targeted engagement. Increasingly,
companies are moving to to a more structured way of
In 2012 and beyond, consumer products companies
integrating digital media into their broader marketing
will continue to move away from Corporate
and corporate strategies. What’s clear is that the
Social Responsibility (CSR) and a separate set of
world’s leading consumer products companies are
sustainability initiatives. Instead, they will increasingly
embracing digital media as a platform for large-scale
integrate sustainable practices into their core
direct consumer engagement. Such engagement will
operating models throughout the value chain – from
serve many purposes – to inform innovation, test
sourcing and waste management to consumer
new products, nurture and support brands, sell direct
engagement with the brand. Increasing numbers of
and provide after sales service. Most importantly, it
companies are recognizing that sustainability can be
will help enable consumer products companies to
a primary driver for strategic product and business
understand their consumers better as individuals and
model innovation that makes them more relevant to
target them accordingly. Again, the use of data and
consumers, captures market share, and helps them
analytics will be key to this.
continue to operate effectively in a changing world.

Building teams that focus exclusively on digital
One of the key drivers of the need for change is
channels, developing talent that understands
consumer expectations. Yes, consumers will continue
and anticipates future digital trends, and shifting
to place strong emphasis on price, convenience and
investments from traditional to digital marketing
quality in making their decisions about where to
are only a few of the initiatives that consumer
shop and what to buy. However, increasing numbers
products companies are likely to pursue as they
of them will want explicit reassurance that what they
re-think their digital media strategies. While the
buy will be ‘good for the planet’, and most will likely
specific optimal digital media strategy will vary by
expect that businesses are already operating to the
company, geography, and product category, there
highest possible standards in this respect. Business
is one constant denominator for consumer products
leaders are increasingly recognizing that they have
executives – the need to meaningfully engage
the responsibility, capability, and self-interest to
with consumers throughout their journey with
achieve real beneficial change in consumer behaviors
their brands and convert them from merely loyal
through the way their products and marketing
customers into active brand advocates.
messages touch people’s lives every day.

Use sustainable practices as a key component
of the growth agenda
Consumer products companies will increasingly
operate in a resource-constrained, climate-impacted
world that requires businesses to place sustainability
at the center of what they do and how they do it. It’s
not a nice to have; it’s about the very sustainability of
the business model.


It is also likely that more consumer products • ider business model optimization: to better
W
companies will collaborate with government, civil align global, regional, and in-market decision-
society, and even competitors to tackle massive rights with the category and brand portfolio
societal problems such as water scarcity and of the business and to extend the adoption of
deforestation. Increasing regulation and taxation, structures that reduce effective tax rates and free
as well as highly volatile commodity costs, will up additional resources to invest in growth.
increasingly result in true resource costs being
reflected in the price of products for the consumer, Commercial Transformation: The consumer in
which will change behaviors based on affordability 2012 is very different from the consumer of just a
and the perception of value versus personal values. few years ago. What is even more astonishing is
This, in turn, will provide new incentives for RD and the pace at which consumer behavior is changing.
product innovation. Practices such as closed loop Today’s consumer is able to access and share real-
and localized supply chains, water management and time information and has a radically different way of
carbon labeling will help enable organizations to making purchasing decisions. For example, point-
create both value and competitive differentiators. of-purchase activities are more important than ever,
Businesses that successfully take their consumers with coordination of messages along the entire
on this journey are likeliest to remain relevant in the purchasing funnel becoming increasingly critical to
long term. maximizing conversion rates. Integrating consumer,
shopper, and customer/ outlet-based insights will
Review the operating model of the business therefore be essential in shaping optimal strategies
to ensure it delivers the capabilities needed to and tactics to win at the point of purchase. This has
win in markets around the world profound implications for organizations in which
There is increasing focus on strengthening marketing and sales still operate largely within
capabilities and adapting operating models to traditional silo-based structures. Going forward,
underpin strategies to enhance organic growth. marketing strategies have to be integrated “through
Three facets of the business operating model are the line” in strategy, planning, and execution.
top priority for most leading consumer products
companies: Moreover, understanding and meeting the needs
of each consumer segment with the right general
• ommercial transformation: to create new
C value propositions will be necessary but not sufficient
capabilities and underpin effective through-the-line to win with this consumer. Personalization and
integration of marketing spend. relevance to individual needs are becoming ever
more critical to being noticed, ensuring relevance
• Finance transformation: to bring new levels of to the individual and, while that lasts, achieving a
financial literacy to commercial and operational degree of loyalty.
decision making.
In order to successfully execute this consumer-centric
strategy, consumer products companies will continue
to innovate across multiple areas of their value chain
There is increasing focus on strengthening – from introducing new marketing and distribution
channels, to acquiring new skills and, finally, to
capabilities and adapting operating models to establishing new multi-channel business models.
underpin strategies to enhance organic growth. Given the way that global brand portfolios evolve,
finding the right governance and operating models
to prioritize investment behind global, regional, and
local brands becomes ever more important.

12

Although there is no one-size-fits-all solution for
all companies, most will continue to evolve their Technological advancements will continue to change the way that consumer
products companies think about every aspect of their business – from product
commercial operating models to embrace digital,
innovation to supply chain management
support new channels, and integrate every point of
engagement on the path to purchase. Ever since the invention of newsprint, then radio and then television consumer
products companies have made use of the latest available technologies to win the
hearts and minds of consumers and shoppers. In some ways therefore nothing has
Finance transformation: The changing role of changed. However, what has changed is the pace of change and the power of the
finance within the business is a key area of focus new communications technologies that have recently emerged to connect people
and provide complete transparency of information. Consumer products companies
for virtually every CFO in the consumer products
need to embrace these new technologies and recognize how they impact
sector. Today’s finance organizations must execute different aspects of the business such as innovation, brand development, revenue
on a much broader range of responsibilities management, and demand planning.
than existed in their traditional role as stewards
Full pricing transparency, access to real-time product availability at the store level,
of the finances of the business. The traditional and technology-enabled consumer-to-consumer influencing are just a few examples
responsibilities for information quality and of the way the consumer’s ‘path to purchase’ is being reshaped. As a result,
consumer products companies are increasingly looking to new ways of gathering
consistency, finance talent management, internal
and using consumer and shopper insights to design, develop, and test products;
controls and corporate governance, and overall to communicate the brand value proposition; and to ensure efficient distribution
finance function effectiveness remain. However, throughout the traditional and new channels in which they operate. Recognizing
the inevitable challenges in retail-supplier relationships, the need to align every
there is more emphasis on business partnering and
touch-point on the path to purchase requires close collaboration with retailers, who
business performance management, as well as on still dominate the consumers’ attention in-store. This will continue to be critical to
finance professionals acting as coaches to functional ensuring that the product is placed, priced, and promoted at the right level. In 2012,
it is expected that innovative technologies, such as self-service checkout via mobile
roles across the business. This is part of a broader
phone apps and personalized digital coupons – promoted by the retailers, or even
change in which the role of finance is evolving from by the consumer products companies themselves– will increasingly be tested with
“decision support” into an integral part of decision consumer and shoppers globally.
processes at every level of the business.

In a volatile global environment, the ability to
respond quickly to changes in the market based Wider business model optimization: For many
on accurate facts and forecasts will be increasingly consumer products companies, the combination of
important to a company’s ability to avoid organic and inorganic growth over many years has
unwarranted costs and to get the best return on resulted in complex portfolios of global, regional,
every dollar, Euro, or Yuan spent. Most consumer and local brands. While a rich portfolio of brands
products companies have already established new is a huge asset, in increasingly competitive markets
finance operating models underpinned by integrated around the world it is critically important that
ERP systems and characterized by shared services in-market investment decisions reflect both local
for transaction processing, centers of excellence for market realities and above-market category and
specialist skills areas such as treasury and tax, and brand strategies. Most global consumer products
refocused in-market finance functions. Businesses companies have matrix operating models that
that build on this by developing the right finance reflect the need to manage the business from
competencies and skills supported by the right both a category and geography perspective.
information strategies and business analytics tools Optimizing how this matrix works is therefore
will acquire capabilities that make a real difference important, and companies across the industry are
to succeeding in the market and delivering optimal increasingly focused on achieving this in several
shareholder returns. ways: improvement of top-down and bottom-up
strategy and planning processes to ensure top-to-
bottom alignment behind investment priorities and
plans; removal of ambiguities in decision rights and
accountabilities between in-market and above-
market roles; and increasing focus on above-market
leadership from a like-market archetype perspective
rather than geography.


A look into the ‘virtual store’
Consumer products companies and retailers are seeking new and innovative ways of engaging with consumers and shoppers like never before.
Virtual stores provide one way to stimulate impulse purchases and capture pent-up demand from mobile consumers. The concept, which has been
successfully executed by Tesco in South Korea and is being piloted by Procter Gamble in Prague’s subway stations,7 is likely to become much more
widespread. It plays to the growing demand for convenience while providing a powerful marketing opportunity. For consumer products companies
that seek new channels to reach consumers, utilizing mobility is a new cost-effective way of increasing sales without having to invest in real estate.
For time-constrained and technologically savvy consumers it is a convenient on-the-go shopping experience, as simple as capturing the quick-
response (QR) codes alongside the brand images with a hand-held device. It is not surprising that companies such as Tesco, Procter Gamble, and
others are already experimenting with the concept.

An additional operating model concern for many In the context of an IT strategy for a consumer
companies is ensuring that the business is structured products company, this means that the focus needs
efficiently from a tax perspective. For example, most to be outward, not inward.
leading consumer products companies with pan-
European businesses have already established central In 2012, consumer products companies will have
entrepreneur/low-risk distributor structures in the no shortage of technological capabilities at their
region. The success of these structures in reducing fingertips; nor will they lack available data, with data
effective tax rates has prompted many to explore volumes doubling every 14 months6. However, the
their application in regions such as Asia Pacific increasing complexity of global business and the
where, in spite of slightly different tax regimes, proliferation of media (and, as a result, consumer
similar opportunities exist. touch points) make uncovering hidden insights a
challenging task. It is no surprise that more and
Recognize that the IT strategy of the business more consumer products companies are integrating
has to change business performance improvement, information
Most leading consumer products companies have management, and advanced analytics initiatives to
invested heavily in their core ERP systems over the meet the needs of their businesses. In many cases,
4 Additional information past decade and many have a reasonably complete consumer products executives will seek to deploy
is available in Deloitte
Consulting LLP (2011), operational ERP infrastructure. Nearly half of all existing and new technologies in a disruptive way, to
“Tech Trends 2011: The organizations with ERP implementations plan to make further engage with consumers and customers and
natural convergence investments to expand their capabilities in the next to provide the analytics and insights that can ensure
of business and IT”,
Chapter 7 year4. Most of these consumer product companies that such engagement is relevant and successful.
are making a clear distinction between the “need to
5 he Power of Pull: How
T play” vs. “play to win” processes, and will continue to
Small Moves, Smartly
Made, Can Set Big Things establish a clearly defined corporate strategy for how
in Motion, by John Hagel each process will be enabled for the business.
III, John Seely Brown,
and Lang Davison,
Deloitte Development However, given the digitally-enabled world that is
LLC, 2010 becoming the new reality, the leading consumer
products companies are undergoing a profound
6 Additional information
is available in Deloitte rethink of their IT strategy. According to a recent
Consulting LLP (2010), publication by the ‘Deloitte Centre for the Edge’5, “to
“Depth Perception: A get better faster at whatever it is you do, you’ve got
dozen technology trends
shaping business and IT to be supported by a broad array of complementary
in 2010”, Chapter 10 people and resources from which you can pull
what you need to raise your rate of performance
7 rocter Gamble
P
website (link: http:// improvement”.
news.pg.com/blog/
innovation/pg-and-
mallcz-introduced-first-
virtual-drugstore-czech-
republic

14

Top 250 highlights

Consumer products industry rebounds in 2010 despite
continuing economic malaise Top 250 quick stats, 2010
The consumer products industry ended 2009, one of the toughest
years in the world’s economic history, poised for a rebound. And • $2.82 trillion – aggregate sales of Top 250 in US$
in 2010, robust sales growth and profitability prevailed, despite a
persistent feeling of unease about where the global economy was • $11.3 billion – average size of Top 250 consumer products
headed. companies

Although a durable economic recovery still appears distant, • $2.5 billion – minimum sales required to be on Top 250 list
composite, currency-adjusted sales grew 8.4 percent in 2010 for the
250 largest consumer products companies, nearly a 10 percentage • 8.4 percent – composite year-over-year sales growth
point turnaround from the prior year’s 1.2 percent decline in sales.
Unlike 2009, when 60 percent of Top 250 companies experienced • 8.5 percent – composite net profit margin
negative sales growth, more than three-quarters of Top 250
companies reported a sales increase in 2010. • 0.9x – composite asset turnover

The vast majority of the companies that disclosed their bottom- • 7.5 percent – composite return on assets
line results also were profitable in 2010 (201 of 216 companies).
The composite net profit margin for the 216 reporting companies • 27.8 percent – economic concentration of top 10
was 8.5 percent, an increase of more than two percentage points
over 2009’s 6.4 percent result. While the group’s composite asset
turnover remained the same in 2010 at 0.9 times, better profitability
led to higher return on assets: 7.5 percent compared with 5.6
percent in 2009.

The 250 largest consumer products companies generated combined
sales of more than $2.82 trillion in 2010. This is a significant
increase over 2009, when sales for the Top 250 totaled
$2.57 trillion. Average sales volume for the Top 250 companies
was $11.3 billion in 2010. To rank among the global powers of the
consumer products industry required net sales of at least $2.5 billion,
up from $2.3 billion in 2009.


Top 250 consumer products companies

Sales FY10 FY10 FY10
rank net sales net sales net profit
FY10 Company name Country of origin Region Product sector (US$mil) growth margin
1 Samsung Electronics Co., Ltd. South Korea Asia/Pacific Electronic Products 134,528 11.2% 10.4%
2 Nestlé S.A. Switzerland Europe Food, Drink Tobacco 105,492 2.0% 32.2%
3 Panasonic Corporation Japan Asia/Pacific Electronic Products 101,704 17.2% 1.0%
4 The Procter Gamble Company United States North Personal Household 82,559 4.6% 14.3%
America Products
5 Sony Corporation Japan Asia/Pacific Electronic Products 73,761 0.2% -3.1%
6 Apple Inc. United States North Electronic Products 65,225 52.0% 21.5%
America
7 Unilever Group Netherlands and Europe Food, Drink Tobacco 58,775 11.1% 10.4%
United Kingdom
8 PepsiCo, Inc. United States North Food, Drink Tobacco 57,838 33.8% 11.0%
America
9 Nokia Corporation Finland Europe Electronic Products 56,364 3.6% 3.2%
10 Kraft Foods Inc. United States North Food, Drink Tobacco 49,207 21.8% 8.4%
America
11 LG Electronics Inc. South Korea Asia/Pacific Electronic Products 48,506 -23.6% 2.3%
12 Anheuser-Busch InBev SA/NV Belgium Europe Food, Drink Tobacco 36,297 -1.3% 15.9%
13 Sharp Corporation Japan Asia/Pacific Electronic Products 35,357 9.7% 0.7%
14 The Coca-Cola Company United States North Food, Drink Tobacco 35,119 13.3% 33.8%
America
15 Koninklijke Philips Electronics N.V. Netherlands Europe Personal Household 33,754 9.6% 5.7%
Products
16 Bridgestone Corporation Japan Asia/Pacific Tires 32,680 10.2% 3.7%
17 JBS S.A. Brazil Latin Food, Drink Tobacco 31,426 60.5% -0.5%
America
18 Mars, Incorporated United States North Food, Drink Tobacco 30,000 e 7.1% n/a
America
19 Japan Tobacco Inc. Japan Asia/Pacific Food, Drink Tobacco 29,088 -1.1% 6.0%
20 Tyson Foods, Inc. United States North Food, Drink Tobacco 28,430 6.5% 2.7%
America
21 Philip Morris International Inc. United States North Food, Drink Tobacco 27,208 8.7% 27.6%
America
22 L’Oreal SA France Europe Personal Household 25,888 11.6% 11.5%
Products
23 Compagnie Générale des France Europe Tires 23,757 20.8% 5.9%
Établissements Michelin S.C.A.
24 Imperial Tobacco Group PLC United Kingdom Europe Food, Drink Tobacco 23,415 1.8% 10.1%
25 British American Tobacco plc United Kingdom Europe Food, Drink Tobacco 23,014 4.8% 21.1%
26 Danone France Europe Food, Drink Tobacco 22,587 13.5% 12.0%
27 Lenovo Group Limited Hong Kong Asia/Pacific Electronic Products 21,594 30.0% 1.3%
28 Heineken N.V. Netherlands Europe Food, Drink Tobacco 21,423 9.7% 9.6%
29 Kirin Holdings Company, Limited Japan Asia/Pacific Food, Drink Tobacco 20,959 -4.3% 1.2%
30 NIKE, Inc. United States North Fashion Goods 20,862 9.7% 10.2%
America
31 Haier Group China Asia/Pacific Home Furnishings 20,075 9.2% n/a
Equipment
32 Henkel AG Co. KGaA Germany Europe Personal Household 20,041 11.2% 7.6%
Products
33 Acer Incorporated Taiwan Asia/Pacific Electronic Products 19,973 9.6% 2.4%
34 Research In Motion Limited Canada North Electronic Products 19,907 33.1% 17.1%
America
35 Suntory Holdings Limited Japan Asia/Pacific Food, Drink Tobacco 19,898* 12.4% 2.7%
36 Kimberly-Clark Corporation United States North Personal Household 19,746 3.3% 9.8%
America Products
37 The Goodyear Tire Rubber United States North Tires 18,832 15.5% -0.9%
Company America
38 Whirlpool Corporation United States North Home Furnishings 18,366 7.4% 3.5%
America Equipment

n/a = not available * Unable to determine if company’s reported sales exclude excise taxes
ne = not in existence (created by merger or divestiture) ** Company’s reported sales include unspecified excise taxes
e = estimate

16


39 Altria Group, Inc. United States North Food, Drink Tobacco 16,892 0.4% 23.1%
America
40 adidas AG Germany Europe Fashion Goods 15,921 15.5% 4.7%
41 Diageo plc United Kingdom Europe Food, Drink Tobacco 15,808 1.6% 20.3%
42 Colgate-Palmolive Company United States North Personal Household 15,564 1.5% 14.9%
America Products
43 Svenska Cellulosa AB SCA Sweden Europe Personal Household 15,195 -1.5% 5.1%
Products
44 SABMiller plc United Kingdom Europe Food, Drink Tobacco 15,145 6.7% 16.9%
45 Cargill Meat Solutions Corporation United States North Food, Drink Tobacco 15,000 e 0.0% n/a
America
46 General Mills, Inc. United States North Food, Drink Tobacco 14,880 0.6% 12.1%
America
47 AB Electrolux Sweden Europe Home Furnishings 14,803 -2.6% 3.8%
Equipment
48 Ajinomoto Co., Inc. Japan Asia/Pacific Food, Drink Tobacco 14,130 3.1% 3.0%
49 Kao Corporation Japan Asia/Pacific Personal Household 13,886 0.2% 4.0%
Products
50 Groupe Lactalis France Europe Food, Drink Tobacco 13,810 22.4% 3.0%
51 Fomento Económico Mexicano, Mexico Latin Food, Drink Tobacco 13,342 -14.1% 26.7%
S.A.B. de C.V. (FEMSA) America
52 Reckitt Benckiser Group plc United Kingdom Europe Personal Household 13,071 9.0% 18.6%
Products
53 Meiji Holdings Co., Ltd. Japan Asia/Pacific Food, Drink Tobacco 13,035 0.7% 0.9%
54 BRF – Brasil Foods S.A. Brazil Latin Food, Drink Tobacco 12,947 42.6% 3.5%
America
55 Maxingvest AG Germany Europe Personal Household 12,741 7.7% 5.8%
Products
56 Dr. August Oetker KG Germany Europe Food, Drink Tobacco 12,558 18.9% n/a
57 Kellogg Company United States North Food, Drink Tobacco 12,397 -1.4% 10.0%
America
58 ConAgra Foods, Inc. United States North Food, Drink Tobacco 12,303 1.9% 6.7%
America
59 Smithfield Foods, Inc. United States North Food, Drink Tobacco 12,203 8.9% 4.3%
America
60 Dean Foods Company United States North Food, Drink Tobacco 12,123 8.6% 0.7%
America
61 Asahi Breweries, Ltd. Japan Asia/Pacific Food, Drink Tobacco 12,054 3.2% 4.9%
62 BSH Bosch und Siemens Hausgeräte Germany Europe Home Furnishings 12,048 7.9% 5.1%
GmbH Equipment
63 Royal FrieslandCampina N.V. Netherlands Europe Food, Drink Tobacco 11,914 10.0% 3.2%
64 Nintendo Co., Ltd. Japan Asia/Pacific Leisure Goods 11,868 -29.3% 7.7%
65 Vion N.V. Netherlands Europe Food, Drink Tobacco 11,644 -2.4% 0.9%
66 Nippon Meat Packers, Inc. Japan Asia/Pacific Food, Drink Tobacco 11,575 3.7% 1.7%
67 Motorola Mobility Holdings, Inc. United States North Electronic Products 11,460 3.7% -0.7%
America
68 Land O’Lakes, Inc. United States North Food, Drink Tobacco 11,146 7.1% 1.6%
America
69 GD Midea Holding Co., Ltd. China Asia/Pacific Home Furnishings 11,030 57.7% 5.4%
Equipment
70 Avon Products, Inc. United States North Personal Household 10,731 4.3% 5.6%
America Products
71 H. J. Heinz Company United States North Food, Drink Tobacco 10,707 2.0% 9.4%
America
72 Carlsberg A/S Denmark Europe Food, Drink Tobacco 10,706 1.1% 9.9%
73 Yamazaki Baking Co., Ltd. Japan Asia/Pacific Food, Drink Tobacco 10,601 4.8% 1.4%
74 Uni-President Enterprises Corp. Taiwan Asia/Pacific Food, Drink Tobacco 10,586 18.0% 4.9%
75 Pernod Ricard S.A. France Europe Food, Drink Tobacco 10,424 7.9% 14.1%

e = estimate



76 Nikon Corporation Japan Asia/Pacific Electronic Products 10,384 13.0% 3.1%
77 Dairy Farmers of America United States North Food, Drink Tobacco 9,800 21.0% 0.4%
America
78 Grupo Bimbo, S.A.B. de C.V. Mexico Latin Food, Drink Tobacco 9,284 0.7% 4.7%
America
79 Alticor Inc. United States North Personal Household 9,200 9.5% n/a
America Products
80 Compagnie Financière Richemont SA Switzerland Europe Fashion Goods 9,120 33.2% 15.7%
81 Marfrig Alimentos S.A. Brazil Latin Food, Drink Tobacco 9,064 65.1% 0.9%
America
82 The Ferrero Group Italy Europe Food, Drink Tobacco 9,041 4.0% n/a
83 Coca-Cola Hellenic Bottling Company Greece Europe Food, Drink Tobacco 9,021 3.8% 6.4%
S.A.
84 S.C. Johnson Son, Inc. United States North Personal Household 9,000 e 5.9% n/a
America Products
85 Gree Electric Appliances, Inc. of China Asia/Pacific Home Furnishings 8,941 42.3% 7.1%
Zhuhai Equipment
86 The Estée Lauder Companies Inc. United States North Personal Household 8,810 13.0% 8.0%
America Products
87 Arla Foods amba Denmark Europe Food, Drink Tobacco 8,741 6.1% 2.6%
88 Sara Lee Corporation United States North Food, Drink Tobacco 8,681 -19.6% 14.9%
America
89 Reynolds American Inc. United States North Food, Drink Tobacco 8,551 1.6% 13.0%
America
90 Stanley Black Decker, Inc. United States North Home Improvement Products 8,410 125.0% 2.4%
America
91 Sony Ericsson Mobile Sweden Europe Electronic Products 8,358 -7.3% 1.6%
Communications AB
92 Danish Crown AmbA Denmark Europe Food, Drink Tobacco 8,243 1.0% 3.6%
93 Shiseido Company, Limited Japan Asia/Pacific Personal Household 7,847 4.1% 2.3%
Products
94 Campbell Soup Company United States North Food, Drink Tobacco 7,676 1.2% 11.0%
America
95 TCL Corporation China Asia/Pacific Electronic Products 7,668 17.0% 0.9%
96 V.F. Corporation United States North Fashion Goods 7,625 6.7% 7.4%
America
97 Masco Corporation United States North Home Improvement Products 7,592 -2.6% -13.2%
America
98 MillerCoors LLC United States North Food, Drink Tobacco 7,571 -0.0% 14.2%
America
99 Hormel Foods Corporation United States North Food, Drink Tobacco 7,221 10.5% 5.5%
America
100 Eastman Kodak Company United States North Electronic Products 7,187 -5.5% -9.6%
America
101 Fortune Brands, Inc. United States North Home Improvement Products 7,142 6.7% 6.9%
America
102 Sumitomo Rubber Industries, Ltd. Japan Asia/Pacific Tires 6,904 15.3% 4.0%
103 Dole Food Company, Inc. United States North Food, Drink Tobacco 6,893 1.7% -0.4%
America
104 Morinaga Milk Industry Co., Ltd. Japan Asia/Pacific Food, Drink Tobacco 6,821 -0.4% 1.1%
105 Grupo Modelo, S.A.B. de C.V. Mexico Latin Food, Drink Tobacco 6,737 3.9% 18.4%
America
106 Coca-Cola Enterprises Inc. United States North Food, Drink Tobacco 6,714 3.0% 9.3%
America
107 Tingyi (Cayman Islands) Holding Corp. China Asia/Pacific Food, Drink Tobacco 6,681 31.5% 9.2%
108 Mccain Foods Limited Canada North Food, Drink Tobacco 6,494 e 0.0% n/a
America
109 Pirelli C. S.p.A. Italy Europe Tires 6,438 8.7% 0.1%
110 Lotte Co., Ltd. Japan Asia/Pacific Food, Drink Tobacco 6,196 12.4% 1.6%

e = estimate

18


111 Sichuan Changhong Electric Co. Ltd China Asia/Pacific Electronic Products 6,171 32.6% 1.1%
112 The Yokohama Rubber Co., Ltd. Japan Asia/Pacific Tires 6,081 11.4% 2.8%
113 Jarden Corporation United States North Personal Household 6,023 16.9% 1.8%
America Products
114 Charoen Pokphand Foods PCL Thailand Asia/Pacific Food, Drink Tobacco 6,008 14.5% 7.2%
115 Groupe Bigard S.A. France Europe Food, Drink Tobacco 5,976e 0.0% n/a
116 Saputo Inc. Canada North Food, Drink Tobacco 5,930 3.7% 7.5%
America
117 Megmilk Snow Brand Co., Ltd. Japan Asia/Pacific Food, Drink Tobacco 5,899 28.2% 1.9%
118 The Swatch Group Ltd. Switzerland Europe Fashion Goods 5,873 18.8% 17.7%
119 Mattel, Inc. United States North Leisure Goods 5,856 7.8% 11.7%
America
120 National Beef Packing Company, LLC United States North Food, Drink Tobacco 5,808 6.6% 4.3%
America
121 Nippon Suisan Kaisha, Ltd. Japan Asia/Pacific Food, Drink Tobacco 5,783 2.6% 0.0%
122 Newell Rubbermaid Inc. United States North Personal Household 5,759 3.3% 5.1%
America Products
123 Parmalat Group Italy Europe Food, Drink Tobacco 5,711 8.5% 6.5%
124 The Hershey Company United States North Food, Drink Tobacco 5,671 7.0% 9.0%
America
125 Dr Pepper Snapple Group, Inc. United States North Food, Drink Tobacco 5,636 1.9% 9.4%
America
126 Polo Ralph Lauren Corporation United States North Fashion Goods 5,482 14.3% 10.0%
America
127 San Miguel Corporation Philippines Asia/Pacific Food, Drink Tobacco 5,478* 41.3% 9.8%
128 Pioneer Corporation Japan Asia/Pacific Electronic Products 5,353 4.2% 2.4%
129 Kewpie Corporation Japan Asia/Pacific Food, Drink Tobacco 5,341 4.2% 2.6%
130 Sodiaal Union France Europe Food, Drink Tobacco 5,339 61.7% 0.6%
131 Itoham Foods Inc. Japan Asia/Pacific Food, Drink Tobacco 5,335 0.8% 0.1%
132 Mohawk Industries, Inc. United States North Home Improvement Products 5,319 -0.5% 3.6%
America
133 B.C.Tönnies Fleischwerk GmbH Germany Europe Food, Drink Tobacco 5,245e 1.3% n/a
Co. KG
134 The Clorox Company United States North Personal Household 5,231 -5.5% 10.6%
America Products
135 Barilla Holding S.p.A. Italy Europe Food, Drink Tobacco 5,183 -6.4% 0.7%
136 Essilor International S.A. France Europe Personal Household 5,168 19.1% 12.1%
Products
137 Groupe Terrena France Europe Food, Drink Tobacco 5,140 11.1% 0.6%
138 Nichirei Corporation Japan Asia/Pacific Food, Drink Tobacco 5,122 -0.1% 0.9%
139 Hankook Tire Co., Ltd. South Korea Asia/Pacific Tires 5,058 13.0% 8.2%
140 Red Bull GmbH Austria Europe Food, Drink Tobacco 5,026 15.9% n/a
141 Nisshin Seifun Group Inc. Japan Asia/Pacific Food, Drink Tobacco 4,963 -4.4% 3.6%
142 CJ CheilJedang Corporation South Korea Asia/Pacific Food, Drink Tobacco 4,932 13.5% 12.1%
143 ITC Limited India Asia/Pacific Food, Drink Tobacco 4,885 16.4% 22.0%
144 Groupe SEB SA France Europe Home Furnishings 4,849 15.0% 6.7%
Equipment
145 The J.M. Smucker Company United States North Food, Drink Tobacco 4,826 4.8% 9.9%
America
146 Maple Leaf Foods Inc. Canada North Food, Drink Tobacco 4,824 -4.9% 0.6%
America
147 Perdue Incorporated United States North Food, Drink Tobacco 4,760 3.5% n/a
America
148 Bongrain SA France Europe Food, Drink Tobacco 4,741 8.9% 2.6%
149 Kohler Co. United States North Home Improvement Products 4,680 e 0.0% n/a
America
150 Arçelik A.Ş. Turkey Africa/ Home Furnishings 4,612 5.2% 7.9%
Middle East Equipment

e = estimate



151 Namco Bandai Holdings Inc. Japan Asia/Pacific Leisure Goods 4,612 4.1% 0.5%
152 Husqvarna Group Sweden Europe Home Improvement Products 4,488 -5.4% 5.4%
153 SanDisk Corporation United States North Electronic Products 4,463 41.5% 26.9%
America
154 Unicharm Corporation Japan Asia/Pacific Personal Household 4,410 5.6% 9.8%
Products
155 Nissin Foods Holdings Co., Ltd. Japan Asia/Pacific Food, Drink Tobacco 4,387 1.0% 5.6%
156 Yamaha Corporation Japan Asia/Pacific Leisure Goods 4,374 -9.9% 1.5%
157 Hanesbrands Inc. United States North Fashion Goods 4,327 11.2% 4.9%
America
158 Levi Strauss Co. United States North Fashion Goods 4,326 7.5% 3.4%
America
159 Bacardi Limited Bermuda Latin Food, Drink Tobacco 4,300 e 0.0% n/a
America
160 Coca-Cola West Co., Ltd. Japan Asia/Pacific Food, Drink Tobacco 4,291 1.6% 2.0%
161 Energizer Holdings, Inc. United States North Personal Household 4,248 6.2% 9.5%
America Products
162 PT Indofood Sukses Makmur Tbk Indonesia Asia/Pacific Food, Drink Tobacco 4,224 3.4% 10.2%
163 Phillips-Van Heusen Corporation United States North Fashion Goods 4,220 103.8% 1.2%
America
164 ARYZTA AG Switzerland Europe Food, Drink Tobacco 4,157 -6.3% 5.6%
165 Ito En, Ltd. Japan Asia/Pacific Food, Drink Tobacco 4,150 5.6% 2.2%
166 Coca-Cola Amatil Limited Australia Asia/Pacific Food, Drink Tobacco 4,131 2.0% 10.8%
167 Fraser and Neave, Limited Singapore Asia/Pacific Food, Drink Tobacco 4,111** 6.8% 18.6%
168 Hallmark Cards, Inc. United States North Leisure Goods 4,100 2.5% n/a
America
169 Lorillard, Inc. United States North Food, Drink Tobacco 4,053 10.0% 25.4%
America
170 Ralcorp Holdings, Inc. United States North Food, Drink Tobacco 4,049 4.0% 5.2%
America
171 Miele Cie. KG Germany Europe Home Furnishings 4,024 4.2% n/a
Equipment
172 Hasbro, Inc. United States North Leisure Goods 4,002 -1.6% 9.9%
America
173 Coty Inc. United States North Personal Household 4,000 e 11.1% n/a
America Products
174 Casio Computer Co., Ltd. Japan Asia/Pacific Electronic Products 3,998 -20.2% 1.5%
175 Ruchi Soya Industries Ltd. India Asia/Pacific Food, Drink Tobacco 3,958 26.4% 1.2%
176 Indesit Company Italy Europe Home Furnishings 3,823 10.2% 3.1%
Equipment
177 La Coop fédérée Canada North Food, Drink Tobacco 3,804 0.7% 0.5%
America
178 Lion Corporation Japan Asia/Pacific Personal Household 3,781 2.8% 2.0%
Products
179 Premier Foods plc United Kingdom Europe Food, Drink Tobacco 3,770 -8.4% -4.1%
180 Controladora Mabe S.A. de C.V. Mexico Latin Home Furnishings 3,720 e 20.0% n/a
America Equipment
181 GRUMA, S.A.B. de C.V. Mexico Latin Food, Drink Tobacco 3,693 -7.7% 1.6%
America
182 The Schwan Food Company United States North Food, Drink Tobacco 3,670 0.0% n/a
America
183 Del Monte Corporation (formerly Del United States North Food, Drink Tobacco 3,666 -2.0% 3.2%
Monte Foods Company) America
184 Rolex SA Switzerland Europe Fashion Goods 3,654 e 11.8% n/a
185 Puma AG Rudolf Dassler Sport Germany Europe Fashion Goods 3,594 10.0% 7.5%
186 Jones Apparel Group, Inc. United States North Fashion Goods 3,594 9.6% 1.5%
America
187 Electronic Arts Inc. United States North Leisure Goods 3,589 -1.8% -7.7%
America

e = estimate

20


188 Yakult Honsha Co., Ltd. Japan Asia/Pacific Food, Drink Tobacco 3,580 5.3% 5.3%
189 Toyo Suisan Kaisha, Ltd. Japan Asia/Pacific Food, Drink Tobacco 3,579 -3.0% 4.3%
190 World Co., Ltd. Japan Asia/Pacific Fashion Goods 3,575 -2.7% 0.0%
191 The Nisshin OilliO Group, Ltd. Japan Asia/Pacific Food, Drink Tobacco 3,572 1.3% 1.0%
192 D. Swarovski KG Austria Europe Fashion Goods 3,532 18.2% n/a
193 Vestel Elektronik Sanayi ve Ticaret Turkey Africa/ Electronic Products 3,517 13.9% 0.8%
A.Ş. Middle East
194 Funai Electric Co., Ltd. Japan Asia/Pacific Electronic Products 3,462 -6.0% -0.3%
195 Toyo Tire Rubber Co., Ltd. Japan Asia/Pacific Tires 3,441 2.2% 0.3%
196 E. J. Gallo Winery United States North Food, Drink Tobacco 3,400 e 13.3% n/a
America
197 Techtronic Industries Co. Ltd. Hong Kong Asia/Pacific Home Improvement Products 3,388 10.4% 2.8%
198 L.D.C. SA France Europe Food, Drink Tobacco 3,372 23.7% 1.9%
199 Cooper Tire Rubber Company United States North Tires 3,361 20.9% 4.9%
America
200 McCormick Company, Inc. United States North Food, Drink Tobacco 3,337 4.5% 11.1%
America
201 Citizen Holdings Co., Ltd. Japan Asia/Pacific Fashion Goods 3,334 12.9% 1.9%
202 Constellation Brands, Inc. United States North Food, Drink Tobacco 3,332 -1.0% 16.8%
America
203 Ezaki Glico Co., Ltd. Japan Asia/Pacific Food, Drink Tobacco 3,323 -0.2% 1.4%
204 Kikkoman Corporation Japan Asia/Pacific Food, Drink Tobacco 3,317 -0.8% 2.8%
205 Molson Coors Brewing Company United States North Food, Drink Tobacco 3,254 7.3% 21.8%
America
206 Yamae Hisano Co., Ltd. Japan Asia/Pacific Food, Drink Tobacco 3,228 4.6% 0.8%
207 Chiquita Brands International, Inc. United States North Food, Drink Tobacco 3,227 -7.0% 1.8%
America
208 Agropur Cooperative Canada North Food, Drink Tobacco 3,223 9.5% 1.2%
America
209 Fromageries Bel S.A. France Europe Food, Drink Tobacco 3,210 8.9% 4.9%
210 Hermès International SCA France Europe Fashion Goods 3,188 25.4% 18.0%
211 The Scotts Miracle-Gro Company United States North Home Improvement Products 3,140 -0.1% 6.5%
America
212 Sapporo Holdings Limited Japan Asia/Pacific Food, Drink Tobacco 3,082 2.0% 4.0%
213 Kumho Tire Co., Ltd. South Korea Asia/Pacific Tires 3,044 18.2% -1.1%
214 Konami Corporation Japan Asia/Pacific Leisure Goods 3,018 -1.6% 4.9%
215 KTG Corporation South Korea Asia/Pacific Food, Drink Tobacco 3,011 -4.5% 29.8%
216 Société Coopérative Agricole et Agro- France Europe Food, Drink Tobacco 3,002 4.1% 1.5%
alimentaire AGRIAL
217 JELD-WEN, Inc. United States North Home Improvement Products 3,000 e 20.0% n/a
America
218 Perfetti Van Melle S.p.A. Italy Europe Food, Drink Tobacco 2,981 8.0% n/a
219 Rich Products Corporation United States North Food, Drink Tobacco 2,960e 2.1% n/a
America
220 Nippon Flour Mills Co., Ltd. Japan Asia/Pacific Food, Drink Tobacco 2,950 -3.6% 2.4%
221 Prima Meat Packers, Ltd. Japan Asia/Pacific Food, Drink Tobacco 2,937 -0.6% 1.5%
222 Natura Cosméticos S.A. Brazil Latin Personal Household 2,932 21.1% 14.5%
America Products
223 Triskalia France Europe Food, Drink Tobacco 2,921 ne n/a
224 Ashley Furniture Industries, Inc. United States North Home Furnishings 2,900 e 4.7% n/a
America Equipment
225 Vizio, Inc. United States North Electronic Products 2,900 e 17.3% n/a
America
226 Onward Holdings Co., Ltd. Japan Asia/Pacific Fashion Goods 2,834 -1.6% 1.2%
227 Rinnai Corporation Japan Asia/Pacific Home Furnishings 2,801 5.9% 6.8%
Equipment
228 Anadolu Efes Biracilik ve Malt Sanayii Turkey Africa/ Food, Drink Tobacco 2,772* 9.4% 12.4%
A.Ş. Middle East

e = estimate



229 Armstrong World Industries, Inc. United States North Home Improvement Products 2,766 -0.5% 0.4%
America
230 Herbalife Ltd. United States North Food, Drink Tobacco 2,734 17.6% 10.6%
America
231 Groupe Yves Rocher France Europe Personal Household 2,730 e 2.8% n/a
Products
232 Nordmilch GmbH Germany Europe Food, Drink Tobacco 2,718 11.8% 0.1%
233 Rosen’s Diversified Inc. United States North Food, Drink Tobacco 2,660e 6.0% n/a
America
234 Humana Group Germany Europe Food, Drink Tobacco 2,656 18.1% 0.3%
235 Videocon Industries Limited India Asia/Pacific Electronic Products 2,612e 14.2% n/a
236 Bausch Lomb Inc. United States North Personal Household 2,600 e 4.0% n/a
America Products
237 Wimm-Bill-Dann Foods OJSC Russia Europe Food, Drink Tobacco 2,600 19.2% n/a
238 Tiger Brands Limited South Africa Africa/ Food, Drink Tobacco 2,594 -5.5% 11.1%
Middle East
239 Church Dwight Co., Inc. United States North Personal Household 2,589 2.7% 10.5%
America Products
240 Brown-Forman Corporation United States North Food, Drink Tobacco 2,586 4.7% 22.1%
America
241 Emmi AG Switzerland Europe Food, Drink Tobacco 2,580 2.5% 3.9%
242 Flowers Foods, Inc. United States North Food, Drink Tobacco 2,574 -1.0% 5.3%
America
243 Spectrum Brands Holdings, Inc. United States North Personal Household 2,567 15.1% -7.4%
America Products
244 Irish Dairy Board Co-operative Ireland Europe Food, Drink Tobacco 2,560 5.7% 0.6%
Limited
245 Bakkavör Group ehf. Iceland Europe Food, Drink Tobacco 2,541 -0.4% -0.8%
246 Nortura SA Norway Europe Food, Drink Tobacco 2,538 0.1% 1.3%
247 House Foods Corporation Japan Asia/Pacific Food, Drink Tobacco 2,536 -1.8% 2.4%
248 Goodman Fielder Limited Australia Asia/Pacific Food, Drink Tobacco 2,529 -3.9% -6.3%
249 Liz Claiborne, Inc. United States North Fashion Goods 2,500 -17.0% -10.1%
America
250 Hostess Brands, Inc. United States North Food, Drink Tobacco 2,500 e -2.3% n/a
America

e = estimate

22

Top 250 consumer products companies alphabetical listing

AB Electrolux 47 Dr Pepper Snapple Group, Inc. 125 Kohler Co. 149 PT Indofood Sukses Makmur Tbk 162
Acer Incorporated 33 Dr. August Oetker KG 56 Konami Corporation 214 Puma AG Rudolf Dassler Sport 185
adidas AG 40 E. J. Gallo Winery 196 Koninklijke Philips Electronics N.V. 15 Ralcorp Holdings, Inc. 170
Agropur Cooperative 208 Eastman Kodak Company 100 Kraft Foods Inc. 10 Reckitt Benckiser Group plc 52
Ajinomoto Co., Inc. 48 Electronic Arts Inc. 187 KTG Corporation 215 Red Bull GmbH 140
Alticor Inc. 79 Emmi AG 241 Kumho Tire Co., Ltd. 213 Research In Motion Limited 34
Altria Group, Inc. 39 Energizer Holdings, Inc. 161 L.D.C. SA 198 Reynolds American Inc. 89
Anadolu Efes Biracilik ve Malt 228 Essilor International S.A. 136 La Coop fédérée 177 Rich Products Corporation 219
Sanayii A.Ş. Estée Lauder Companies Inc. 86 Land O’Lakes, Inc. 68 Rinnai Corporation 227
Anheuser-Busch InBev SA/NV 12 Ezaki Glico Co., Ltd. 203 Lenovo Group Limited 27 Rolex SA 184
Apple Inc. 6 Ferrero Group 82 Levi Strauss Co. 158 Rosen’s Diversified Inc. 233
Arçelik A.Ş. 150 Flowers Foods, Inc. 242 LG Electronics Inc. 11 Royal FrieslandCampina N.V. 63
Arla Foods amba 87 Fomento Económico Mexicano, 51 Lion Corporation 178 Ruchi Soya Industries Ltd. 175
Armstrong World Industries, Inc. 229 S.A.B. de C.V. (FEMSA) Liz Claiborne, Inc. 249 S.C. Johnson Son, Inc. 84
ARYZTA AG 164 Fortune Brands, Inc. 101 L’Oreal SA 22 SABMiller plc 44
Asahi Breweries, Ltd. 61 Fraser and Neave, Limited 167 Lorillard, Inc. 169 Samsung Electronics Co., Ltd. 1
Ashley Furniture Industries, Inc. 224 Fromageries Bel S.A. 209 Lotte Co., Ltd. 110 San Miguel Corporation 127
Avon Products, Inc. 70 Funai Electric Co., Ltd. 194 Maple Leaf Foods Inc. 146 SanDisk Corporation 153
B.C.Tönnies Fleischwerk GmbH 133 GD Midea Holding Co., Ltd. 69 Marfrig Alimentos S.A. 81 Sapporo Holdings Limited 212
Co. KG General Mills, Inc. 46 Mars, Incorporated 18 Saputo Inc. 116
Bacardi Limited 159 Goodman Fielder Limited 248 Masco Corporation 97 Sara Lee Corporation 88
Bakkavör Group ehf. 245 Goodyear Tire Rubber Company 37 Mattel, Inc. 119 Schwan Food Company 182
Barilla Holding S.p.A. 135 Gree Electric Appliances, Inc. of 85 Maxingvest AG 55 Scotts Miracle-Gro Company 211
Bausch Lomb Inc. 236 Zhuhai Mccain Foods Limited 108 Sharp Corporation 13
Bongrain SA 148 Groupe Bigard S.A. 115 McCormick Company, Inc. 200 Shiseido Company, Limited 93
BRF Brasil Foods S.A. 54 Groupe Lactalis 50 Megmilk Snow Brand Co., Ltd. 117 Sichuan Changhong Electric 111
Bridgestone Corporation 16 Groupe SEB SA 144 Meiji Holdings Co., Ltd. 53 Co. Ltd
British American Tobacco plc 25 Groupe Terrena 137 Miele Cie. KG 171 Smithfield Foods, Inc. 59
Brown-Forman Corporation 240 Groupe Yves Rocher 231 MillerCoors LLC 98 Société Coopérative Agricole et 216
BSH Bosch und Siemens 62 GRUMA, S.A.B. de C.V. 181 Mohawk Industries, Inc. 132 Agro-alimentaire AGRIAL
Hausgeräte GmbH Grupo Bimbo, S.A.B. de C.V. 78 Molson Coors Brewing Company 205 Sodiaal Union 130
Campbell Soup Company 94 Grupo Modelo, S.A.B. de C.V. 105 Morinaga Milk Industry Co., Ltd. 104 Sony Corporation 5
Cargill Meat Solutions 45 H. J. Heinz Company 71 Motorola Mobility Holdings, Inc. 67 Sony Ericsson Mobile 91
Corporation Haier Group 31 Namco Bandai Holdings Inc. 151 Communications AB
Carlsberg A/S 72 Hallmark Cards, Inc. 168 National Beef Packing Company, 120 Spectrum Brands Holdings, Inc. 243
Casio Computer Co., Ltd. 174 Hanesbrands Inc. 157 LLC Stanley Black Decker, Inc. 90
Charoen Pokphand Foods PCL 114 Hankook Tire Co., Ltd. 139 Natura Cosméticos S.A. 222 Sumitomo Rubber Industries, Ltd. 102
Chiquita Brands International, Inc. 207 Hasbro, Inc. 172 Nestlé S.A. 2 Suntory Holdings Limited 35
Church Dwight Co., Inc. 239 Heineken N.V. 28 Newell Rubbermaid Inc. 122 Svenska Cellulosa AB SCA 43
Citizen Holdings Co., Ltd. 201 Henkel AG Co. KGaA 32 Nichirei Corporation 138 Swatch Group Ltd. 118
CJ CheilJedang Corporation 142 Herbalife Ltd. 230 NIKE, Inc. 30 TCL Corporation 95
Clorox Company 134 Hermès International SCA 210 Nikon Corporation 76 Techtronic Industries Co. Ltd. 197
Coca-Cola Amatil Limited 166 Hershey Company 124 Nintendo Co., Ltd. 64 Tiger Brands Limited 238
Coca-Cola Company 14 Hormel Foods Corporation 99 Nippon Flour Mills Co., Ltd. 220 Tingyi (Cayman Islands) Holding 107
Coca-Cola Enterprises Inc. 106 Hostess Brands, Inc. 250 Nippon Meat Packers, Inc. 66 Corp.
Coca-Cola Hellenic Bottling 83 House Foods Corporation 247 Nippon Suisan Kaisha, Ltd. 121 Toyo Suisan Kaisha, Ltd. 189
Company S.A. Humana Group 234 Nisshin OilliO Group, Ltd. 191 Toyo Tire Rubber Co., Ltd. 195
Coca-Cola West Co., Ltd. 160 Husqvarna Group 152 Nisshin Seifun Group Inc. 141 Triskalia 223
Colgate-Palmolive Company 42 Imperial Tobacco Group PLC 24 Nissin Foods Holdings Co., Ltd. 155 Tyson Foods, Inc. 20
Compagnie Financière 80 Indesit Company 176 Nokia Corporation 9 Unicharm Corporation 154
Richemont SA Irish Dairy Board Co-operative 244 Unilever Group 7
Nordmilch GmbH 232
Compagnie Générale des 23 Limited Nortura SA 246 Uni-President Enterprises Corp. 74
Établissements Michelin S.C.A. ITC Limited 143 Onward Holdings Co., Ltd. 226 V.F. Corporation 96
ConAgra Foods, Inc. 58 Ito En, Ltd. 165 Panasonic Corporation 3 Vestel Elektronik Sanayi ve 193
Constellation Brands, Inc. 202 Itoham Foods Inc. 131 Parmalat Group 123 Ticaret A.Ş.
Controladora Mabe S.A. de C.V. 180 J.M. Smucker Company 145 PepsiCo, Inc. 8 Videocon Industries Limited 235
Cooper Tire Rubber Company 199 Japan Tobacco Inc. 19 Perdue Incorporated 147 Vion N.V. 65
Coty Inc. 173 Jarden Corporation 113 Perfetti Van Melle S.p.A. 218 Vizio, Inc. 225
D. Swarovski KG 192 JBS S.A. 17 Pernod Ricard S.A. 75 Whirlpool Corporation 38
Dairy Farmers of America 77 JELD-WEN, Inc. 217 Philip Morris International Inc. 21 Wimm-Bill-Dann Foods OJSC 237
Danish Crown AmbA 92 Jones Apparel Group, Inc. 186 Phillips-Van Heusen Corporation 163 World Co., Ltd. 190
Danone 26 Kao Corporation 49 Pioneer Corporation 128 Yakult Honsha Co., Ltd. 188
Dean Foods Company 60 Kellogg Company 57 Pirelli C. S.p.A. 109 Yamae Hisano Co., Ltd. 206
Del Monte Corporation (formerly 183 Kewpie Corporation 129 Polo Ralph Lauren Corporation 126 Yamaha Corporation 156
Del Monte Foods Company) Kikkoman Corporation 204 Premier Foods plc 179 Yamazaki Baking Co., Ltd. 73
Diageo plc 41 Kimberly-Clark Corporation 36 Prima Meat Packers, Ltd. 221 Yokohama Rubber Co., Ltd. 112
Dole Food Company, Inc. 103 Kirin Holdings Company, Limited 29 Procter Gamble Company 4


Global Top 10 consumer products companies, 2010

2010 2010 2010 2010 2010 2010
sales net sales net sales net profit asset return on
rank Company name Country Product sector (US$mil) growth* margin** turnover** assets**
1 Samsung South Korea Electronic Products 134,528 11.2% 10.4% 1.2 12.0%
Electronics
2 Nestlé Switzerland Food, Drink Tobacco 105,492 2.0% 32.2% 1.0 31.7%
3 Panasonic Japan Electronic Products 101,704 17.2% 1.0% 1.1 1.1%
4 Procter United States Personal Household Products 82,559 4.6% 14.3% 0.6 8.5%
Gamble
5 Sony Japan Electronic Products 73,761 0.2% -3.1% 0.6 -1.7%
6 Apple United States Electronic Products 65,225 52.0% 21.5% 0.9 18.6%
7 Unilever Netherlands Food, Drink Tobacco 58,775 11.1% 10.4% 1.1 11.2%
and United
Kingdom
8 PepsiCo United States Food, Drink Tobacco 57,838 33.8% 11.0% 0.8 9.3%
9 Nokia Finland Electronic Products 56,364 3.6% 3.2% 1.1 3.4%
10 Kraft Foods United States Food, Drink Tobacco 49,207 21.8% 8.4% 0.5 4.3%
Top 10 $785,454 12.7% 11.4% 0.8 9.5%
Top 250 $2,823,002 8.4% 8.5% 0.9 7.5%
Economic concentration of Top 10 27.8%

Source: Published company data
* Top 10 and Top 250 sales growth figures are sales-weighted, currency-adjusted composites
** Top 10 and Top 250 figures are sales-weighted composites

Electronics and food/drink/tobacco companies Growing 52 percent in one year, Apple ascended the
dominate Top 10 ranks from twelfth place to sixth in 2010. Unilever and
The 10 largest consumer products companies PepsiCo each rose one place in the top 10 ranking,
outperformed the Top 250 as a whole in 2010 with bumping Nokia from seventh to ninth. Acquisitions
double-digit sales growth and profitability. As a result, continue to propel both companies. In 2010,
the top 10’s share of total Top 250 sales rose one Unilever acquired Sara Lee’s Personal Care business,
percentage point in 2010 to 27.8 percent. Despite and in 2011, the company acquired Alberto-Culver.
slightly lower asset turnover compared with the Top Nevertheless, Pepsi will likely outrank Unilever in the
250, the leader group’s better profitability translated future following several recent acquisitions of its own.
into considerably higher return on assets. In 2010, the company acquired majority stakes in
its two largest bottlers, PepsiAmericas and the Pepsi
Headed by South Korea’s Samsung Electronics, the Bottling Group. In 2011, it completed the acquisition
first five companies on the list remained the same as of Russia’s Wimm-Bill-Dann Foods.
in 2009. However, number three-ranked Panasonic
narrowed the gap with second-place Nestlé. PG, Meanwhile, Kraft Foods remained in tenth place,
the fourth largest consumer products company in while LG Electronics dropped out of the top 10 into
the world, is the only company among the top 10 eleventh place following a 24 percent sales decline
that is neither an electronics maker nor primarily a that is attributable primarily to lagging cell phone
manufacturer of food or beverages. sales.

24

Global Powers of the Consumer Products Performance by region/country, 2010
Industry geographical analysis
For purposes of geographical analysis, companies Average 2010 2010 net 2010 2010
Number of size net sales profit asset return on
are assigned to a region based on their headquarters companies (US$mil) growth* margin** turnover** assets**
location, which may not coincide with where they
Africa/ME 4 $3,374 6.2% 7.6% 1.0 7.9%
derive the majority of their sales. Although many
Asia/Pac 77 $12,004 5.9% 3.7% 1.0 3.7%
companies derive sales from outside their region,
Japan 52 $10,985 4.4% 1.6% 0.9 1.5%
100 percent of each company’s sales are accounted
Europe 66 $12,492 7.0% 11.7% 0.8 9.2%
for in that company’s region. Five regions are used for
analysis: France 17 $8,594 15.2% 8.1% 0.8 6.6%
Germany 10 $9,155 11.2% 5.6% 1.0 5.8%
• Africa/Middle East UK 7 $21,857 6.6% 14.0% 0.6 8.8%
• Asia/Pacific Latin 10 $9,744 22.2% 6.9% 0.9 6.5%
• Europe America

• Latin America North 93 $10,358 10.9% 11.0% 0.8 9.4%
America
• North America
US 87 $10,565 10.8% 11.0% 0.8 9.2%

Growth accelerates for French, German companies Top 250 250 $11,292 8.4% 8.5% 0.9 7.5%

in an otherwise subdued Europe
Latin America continued to lead the regions in top-line Source: Published company data
* Sales-weighted, currency-adjusted composite growth rates
sales growth. At 22.2 percent, composite sales for ** Sales-weighted composites
the companies based in this region grew more than
2.5 times faster than the Top 250 group as a whole in
2010. As a result, Latin America continued to gain in Share of Top 250 companies by country/region, 2010
stature among the Top 250 as reflected by a growing
2.4% 1.6%
share of companies and sales. However, profitability
continued to lag the larger group. The region added
two companies in 2010 for a total of 10 Top 250
20.8%
companies. Marfrig Alimentos and Natura Cosméticos,
both based in Brazil, make a total of four Brazilian
companies. Five of the companies in this region hail 34.8%
from Mexico.
10.0%

While Brazil gained two companies, the UK lost two
in 2010. Cadbury, one of the largest confectionery 6.8%
companies in the world, was acquired by Kraft Foods. 4%
12.8% 4%
Dairy Crest, the UK’s leading dairy foods company, fell
out of the Top 250 following a modest sales decline. 2.8%
Although the UK’s share of Top 250 companies and
Africa/ME Japan Other Asia/Pac France Germany
Top 250 sales both dropped, the average size of the
UK Other Europe Latin America US Canada
UK companies increased to nearly $22 billion, more
than $10 billion larger than the average Top 250
consumer products company.

The UK has the dubious distinction of being the only
geographic area tracked in this study to experience
decelerating sales growth in 2010. In 2009, its robust
9.5 percent increase in sales stood out in a sea of
mostly negative growth numbers. In 2010, however,
the country’s composite sales growth cooled to 6.6
percent, while growth rebounded in the other regions
and countries.


The UK’s relatively modest advance in sales Share of Top 250 sales by country/region, 2010
contributed to below-average 7.0 percent composite
1.6% 0.5%
growth for Europe as a whole. A marked improvement
over the prior year’s negative result, it nevertheless fell
short compared with the North American and Latin 20.2%
American regions. Although composite growth for
European companies was moderate, that was not the 32.6%
case for France and Germany. These two countries
experienced huge swings in top-line performance. 12.5%
For Germany, composite sales growth jumped from
-5.4 percent in 2009 to 11.2 percent in 2010.
For France, the change was equally notable: from 5.2%
3.5%
-0.9 percent to 15.2 percent.
15.4% 5.4%
3.2%
Despite more modest sales growth, European
consumer products companies recorded the highest Africa/ME Japan Other Asia/Pac France Germany
composite net profit margin of all five regions – UK Other Europe Latin America US Canada
11.7 percent – assisted by the UK’s industry-leading
14 percent profit margin. It should be noted, however,
that Nestlé’s 32 percent net profit margin in 2010
Companies in the Asia/Pacific region – particularly
had a disproportionate impact on the region’s overall
those based in Japan – did not recover as strongly as
result. Nestle’s bottom line was given a significant
the others. Composite net sales grew 5.9 percent in
boost from one-time net income of discontinued
2010 (4.4 percent for Japan). The region’s 3.7 percent
operations (Alcon) of $24.5 billion. Excluding Nestlé,
net profit margin was the lowest among the five
Europe’s composite net profit margin and return
regions, restrained by the Japanese companies’
on assets drop to 8.4 percent and 6.4 percent,
1.6 percent result. Japan accounted for two-thirds
respectively, slightly below the Top 250 as a whole.
(52 of 77) of all Top 250 companies based in the Asia/
Pacific region, so it had a disproportionate impact on
The 93 North American consumer products companies
the region’s results.
also experienced a big rebound in composite sales,
growing nearly 11 percent in 2010 from -3.2 percent
Three companies based in Turkey and one in South
in 2009. On a regional basis, this group outperformed
Africa comprised the Africa/Middle East region. These
the others on the bottom line – including Europe, if
companies are relatively small – less than one-third
Nestlé is factored out of the region’s result.
the size of the average Top 250 company.

26

Top consumer products companies by region Top 10 European consumer products companies, 2010
Among the European consumer products companies, Top 2010
six of the top 10 operate in the food, drink, and Europe 250 net sales
Company name rank rank Product sector Country (US$mil)
tobacco sector. Nestlé maintained its first place
Nestlé 1 2 Food, Drink Tobacco Switzerland 105,492
ranking despite weak sales growth in 2010. Double-
Unilever 2 7 Food, Drink Tobacco Netherlands 58,775
digit growth propelled Unilever ahead of Nokia
and United
to become the second-largest consumer products Kingdom
company in the region. Michelin jumped from tenth Nokia 3 9 Electronic Products Finland 56,364
place to seventh. Despite these changes in the AB InBev 4 12 Food, Drink Tobacco Belgium 36,297
ranking, the top 10 names remained the same as in Philips 5 15 Personal Household Netherlands 33,754
2009. Products
L’Oreal 6 22 Personal Household France 25,888
Products
A similar scenario played out in the North American
Michelin 7 23 Tires France 23,757
region where PG remained the undisputed consumer
Imperial 8 24 Food, Drink Tobacco United 23,415
products leader. However, Apple beat out PepsiCo Tobacco Kingdom
for second place. As noted above, the technology BAT 9 25 Food, Drink Tobacco United 23,014
giant enjoyed heady growth in 2010, with more than Kingdom
half its sales coming from outside the United States. Danone 10 26 Food, Drink Tobacco France 22,587
Meanwhile, Kraft Foods fell to fourth place. Top
10 newcomers NIKE and Research In Motion (RIM) Top 10 North American consumer products companies, 2010
displaced Coca-Cola Enterprises (CCE) and Kimberly- North Top 2010 net
Clark. CCE, the third-largest Coca-Cola bottler in the Company America 250 sales
world, sold its North American operations to The name rank rank Product sector Country (US$mil)

Coca-Cola Company (TCCC) in 2010 and acquired Procter 1 4 Personal Household United States 82,559
Gamble Products
TCCC’s bottling operations in Norway and Sweden.
Apple 2 6 Electronic Products United States 65,225
RIM, which grew by one-third in 2010, became the
PepsiCo 3 8 Food, Drink Tobacco United States 57,838
first Canadian company to join the North American
Kraft Foods 4 10 Food, Drink Tobacco United States 49,207
top 10.
Coca-Cola 5 14 Food, Drink Tobacco United States 35,119
Mars 6 18 Food, Drink Tobacco United States 30,000e
Six of the top 10 Asia/Pacific consumer products
Tyson Foods 7 20 Food, Drink Tobacco United States 28,430
companies, including the top 5, are manufacturers
Philip Morris 8 21 Food, Drink Tobacco United States 27,208
of electronic products. A 30 percent jump in sales in International
2010 pushed Hong Kong-based Lenovo Group onto NIKE 9 30 Fashion Goods United States 20,862
the region’s leader board for the first time, landing Research In 10 34 Electronic Products Canada 19,907
in eighth place. As a result, Taiwan’s Acer Inc. fell off Motion
the list. This was the only change to the Asia/Pacific
top 10. Top 10 Asia/Pacific consumer products companies, 2010
Asia/ Top 2010
Pacific 250 net sales
Samsung 1 1 Electronic Products South Korea 134,528
Panasonic 2 3 Electronic Products Japan 101,704
Sony 3 5 Electronic Products Japan 73,761
LG 4 11 Electronic Products South Korea 48,506
Sharp 5 13 Electronic Products Japan 35,357
Bridgestone 6 16 Tires Japan 32,680
Japan Tobacco 7 19 Food, Drink Tobacco Japan 29,088
Lenovo 8 27 Electronic Products Hong Kong 21,594
Kirin 9 29 Food, Drink Tobacco Japan 20,959
Haier 10 31 Home Furnishings China 20,075
Equipment

e = estimate


Latin America had 10 companies among the Top Top 10 Latin American consumer products companies, 2010
250 in 2010, up two from the prior year with the Latin Top 2010 net
addition of Brazil’s Marfrig Alimentos, which operates Company America 250 sales
name rank rank Product sector Country (US$mil)
primarily in the meat sector, and Natura Cosméticos, a
JBS 1 17 Food, Drink Tobacco Brazil 31,426
maker of cosmetics and fragrances. All of the region’s
FEMSA 2 51 Food, Drink Tobacco Mexico 13,342
companies except for Natura and Mabe operate as
BRF – Brasil 3 54 Food, Drink Tobacco Brazil 12,947
either food processors or beverage makers.
Foods
Grupo Bimbo 4 78 Food, Drink Tobacco Mexico 9,284
There were no changes among the companies that
Marfrig 5 81 Food, Drink Tobacco Brazil 9,064
comprised the Africa/Middle East region. However, all
Grupo Modelo 6 105 Food, Drink Tobacco Mexico 6,737
four moved up in the Top 250 ranking in 2010.
Bacardi 7 159 Food, Drink Tobacco Bermuda 4,300e
Mabe 8 180 Home Furnishings Mexico 3,720 e
Equipment
Gruma 9 181 Food, Drink Tobacco Mexico 3,693
Natura 10 222 Personal Household Brazil 2,932
Cosméticos Products

Top Africa/Middle East consumer products companies, 2010

Africa/ Top 2010 net
ME 250 sales
Arçelik 1 150 Home Furnishings Turkey 4,612
Equipment
Vestel 2 193 Electronic Products Turkey 3,517
Anadolu Efes* 3 228 Food, Drink Tobacco Turkey 2,772*
Tiger Brands 4 238 Food, Drink Tobacco South Africa 2,594

e = estimate
* Unable to determine if company’s reported sales exclude excise taxes

28

Global Powers of the Consumer Products Performance by product sector, 2010
Industry product sector analysis
For analytical purposes, the Top 250 companies have Average 2010 2010 2010 2010
Number of size net sales net profit asset return on
been organized into eight major product sectors: companies (US$mil) growth* margin** turnover** assets**
Electronic 23 $28,454 9.9% 5.3% 1.0 5.5%
• Electronic products products
• Fashion goods Fashion 18 $5,976 14.2% 7.6% 1.1 8.0%
• Food, drink, and tobacco goods
• Home furnishings and equipment Food, drink 140 $9,986 7.6% 10.9% 0.8 8.9%
• Home improvement products tobacco

• Leisure goods Home 13 $8,615 12.6% 5.0% 1.2 6.2%
furnishings
• Personal and household products
• Tires equipment
Home 10 $4,992 12.3% 1.0% 0.8 0.8%
Fashion goods and tire sectors rally improvement
products
At 14.2 percent, the fashion goods sector posted the
strongest composite sales growth in 2010 – a huge Leisure 8 $5,177 -10.1% 5.2% 0.8 4.3%
goods
turnaround from a 5.3 percent drop in sales in 2009.
Personal 28 $12,503 6.4% 9.8% 0.8 7.7%
Liz Claiborne, the only company in this group to suffer
household
a significant sales decline, continues to rationalize products
its brand portfolio and has shifted its channel focus Tires 10 $10,960 14.1% 3.1% 1.0 3.2%
from primarily serving department stores to become Top 250 250 $11,292 8.4% 8.5% 0.9 7.5%
a direct-to-consumer business. Among other
transactions, in November 2011, the company sold Source: Published company data
the trademark rights to its namesake Liz Claiborne * Sales-weighted, currency-adjusted composite growth rates
** Sales-weighted composites
brand to J.C. Penney. In 2012, the company will
change its name to Fifth Pacific Companies to better
communicate its strategic focus on growing its three
global lifestyle brands (Juicy Couture, Kate Spade, and
Lucky Brand).

In line with a rebound in auto sales, all 10 tire
manufacturers participated in that sector’s 2010 sales
comeback, with eight experiencing a double-digit
increase. In 2009, eight tire companies saw sales
decline. The group also returned to profitability in
2010 following two years of composite losses.

Despite relatively modest 6.4 percent sales growth
in 2010, the personal and household products
sector remained one of the most profitable with
a composite net profit margin of 9.8 percent. The
companies in this group tend to be large, second
only to the electronics sector in average sales volume.
The average size of this group was given a boost in
2010 with the reclassification of Philips Electronics as
a household products company to reflect its focus on
healthcare, lifestyle, and lighting products.


The food, drink, and tobacco sector, the largest of Share of Top 250 companies by product sector, 2010
the eight product groups, saw its share of Top 250
4.0%
companies and Top 250 sales decline for the first time
in the five years that Deloitte has been tracking the 9.2%
global powers of the consumer products industry. 11.2%
7.2%
This group, the only sector to eke out any growth at 3.2%
all in 2009, generated below-average sales growth
4.0%
in 2010 – 7.6 percent versus 8.4 percent for the Top
250. Personal and household products, the other 5.2%
fast-moving consumer goods sector, was the only
major product group to grow at a slower pace.
Nevertheless, food, drink, and tobacco companies
outperformed the other product sectors on the
bottom line with a robust 10.9 percent composite net 56.0%

profit margin.
Electronic products Fashion goods Food, drink tobacco
Within the food, drink, and tobacco sector, food Home furnishings equipt. Home improvement products Leisure goods
processors experienced a strong rebound in sales Personal hshld. products Tires
to 9.2 percent from -1.5 percent in 2009. On the
other hand, sales growth slowed significantly for the
tobacco companies to 3.3 percent in 2010 from Share of Top 250 sales by product sector, 2010
8.2 percent the year before. Nevertheless, they
3.9%
continued to be highly profitable, as did the beverage
makers.
12.4% 23.2%
The composite net profit margin nearly doubled 1.5%
in 2010 for manufacturers of electronic products, 1.8%

historically one of the lowest-margin sectors. 4.0%
Although many companies in this sector continued 3.8%
to operate within a 1-3 percent range, Samsung,
Apple, RIM, and SanDisk all boasted double-digit
profitability. Composite sales for the group advanced
a solid 9.9 percent.
49.5%
Composite sales rose 12.6 percent for the home
furnishings and equipment sector. However, this result Electronic products Fashion goods Food, drink tobacco
is not necessarily reflective of the fortunes of many Home furnishings equipt. Home improvement products Leisure goods
of the individual companies. Total sales for the group Personal hshld. products Tires
were given a boost primarily by GD Midea and Gree,
both Chinese manufacturers of home appliances.
Food, drink tobacco: performance by subsector, 2010
The home improvement products sector generated
the biggest turnaround in composite sales of all the Average FY10 FY10 FY10 FY10
product groups in 2010. Composite sales were down Number of size net sales net profit asset return on
companies (US$mil) growth* margin** turnover** assets**
more than 13 percent in 2009, but recovered to plus
12.3 percent in 2010. However, the merged sales of Beverages 30 $10,115 4.7% 14.4% 0.5 7.4%

Stanley Works and Black Decker to form Stanley Food 101 $9,450 9.2% 8.7% 1.1 9.4%
processing
Black Decker in March 2010 was mostly responsible
Tobacco 9 $15,569 3.3% 17.5% 0.6 10.4%
for the increase.
Food, drink 140 $9,986 7.6% 10.9% 0.8 8.9%
tobacco
The leisure goods sector was the lone exception to
the consumer products industry’s 2010 sales rally.
Five of the eight Top 250 leisure goods companies * Sales-weighted, currency-adjusted composite growth rates
suffered declining sales. In particular, Japanese ** Sales-weighted composites
gaming giant Nintendo continued to stumble amid
heightened competition.

30

Top consumer products companies by product Top 10 electronic products companies, 2010
sector Product Top FY10
Samsung, Panasonic, and Sony remained in the sector 250 net sales
Company name rank rank Country Region (US$mil)
top three spots among the electronic products
Samsung 1 1 South Korea Asia/Pacific 134,528
companies. The rest continued to jockey for position,
Panasonic 2 3 Japan Asia/Pacific 101,704
with Apple moving into fourth place ahead of Nokia
Sony 3 5 Japan Asia/Pacific 73,761
and LG. Philips, number seven on the list last year,
Apple 4 6 United States North America 65,225
was reclassified to the personal and household
Nokia 5 9 Finland Europe 56,364
products sector as noted above. This made room
LG 6 11 South Korea Asia/Pacific 48,506
for Research In Motion (RIM) to join the top 10
Sharp 7 13 Japan Asia/Pacific 35,357
electronics companies for the first time. The company
Lenovo 8 27 Hong Kong Asia/Pacific 21,594
has grown in leaps and bounds since its Blackberry
Acer 9 33 Taiwan Asia/Pacific 19,973
device evolved into a global wireless data platform.
Research In 10 34 Canada North America 19,907
In fiscal 2006, RIM ranked 199th among the Top 250. Motion
In fiscal 2010, it had moved up to 34th place overall
and became the world’s tenth largest electronics
company.
Top 10 fashion goods companies, 2010
Product Top FY10
The United States and Switzerland dominate the
sector 250 net sales
fashion goods leader board, accounting for nine Company name rank rank Country Region (US$mil)
of the top 10 companies. There were no changes NIKE 1 30 United States North America 20,862
among the first four companies in 2010, with Nike, adidas 2 40 Germany Europe 15,921
the world’s top maker of athletic footwear and Richemont 3 80 Switzerland Europe 9,120
apparel, still in the lead over rival adidas. Swatch and VF 4 96 United States North America 7,625
Polo Ralph Lauren traded places, as did Hanesbrands Swatch 5 118 Switzerland Europe 5,873
and Levi Strauss. Phillips-Van Heusen joined the Top Polo Ralph 6 126 United States North America 5,482
250 for the first time with the acquisition of Tommy Lauren
Hilfiger in May 2010, coming aboard as the ninth Hanesbrands 7 157 United States North America 4,327
largest fashion company. Rolex displaced both Puma Levi Strauss 8 158 United States North America 4,326
and World Co., taking the number ten spot. Phillips-Van 9 163 United States North America 4,220
Heusen
Rolex 10 184 Switzerland Europe 3,654 e

e = estimate


In the food, drink, and tobacco sector, the six largest Top 10 food, drink tobacco companies, 2010
companies remained the same in 2010 as in 2009, Product Top FY10
with Nestlé topping the chart. Brazil’s JBS moved sector 250 net sales
into the top 10 for the first time at number seven.
Nestlé 1 2 Switzerland Europe 105,492
The company acquired a majority stake in Pilgrim’s
Unilever 2 7 Netherlands Europe 58,775
Pride in December 2009; also in December 2009, JBS
and United
merged with Bertin, a Brazilian company and one Kingdom
of the largest beef exporters in Latin America. As a PepsiCo 3 8 United States North America 57,838
result, JBS rose from number 103 in fiscal 2007 to Kraft Foods 4 10 United States North America 49,207
number 17 overall in fiscal 2010. This knocked Philip AB InBev 5 12 Belgium Europe 36,297
Morris International out of the top 10. Coca-Cola 6 14 United States North America 35,119
JBS 7 17 Brazil Latin America 31,426
The top 10 home furnishings and equipment Mars 8 18 United States North America 30,000 e
companies remained fixed in position in 2010. Japan Tobacco 9 19 Japan Asia/Pacific 29,088
All 10 are manufacturers of household appliances. Tyson Foods 10 20 United States North America 28,430
Three are based in China, including top-ranked
Haier.
Top 10 home furnishings equipment companies, 2010
In 2010, there were a total of 10 home improvement Product Top FY10
companies among the Top 250 manufacturers of sector 250 net sales
consumer products. As noted above, Black Decker Company name rank rank Country Region (US$mil)
Haier 1 31 China Asia/Pacific 20,075
became a wholly owned subsidiary of Stanley Works.
Whirlpool 2 38 United States North America 18,366
The name of the combined company was changed
Electrolux 3 47 Sweden Europe 14,803
to Stanley Black Decker. As a result of the merger,
BSH 4 62 Germany Europe 12,048
Black Decker moved from the being the fourth
Midea 5 69 China Asia/Pacific 11,030
largest manufacturer of home improvement products
Gree 6 85 China Asia/Pacific 8,941
to becoming part of the world’s largest home
SEB 7 144 France Europe 4,849
improvement company. Otherwise, this sector’s top
Arçelik 8 150 Turkey Africa/Middle 4,612
10 ranking was fairly stable except for minor changes
East
among the bottom four companies. Eight of the top Miele 9 171 Germany Europe 4,024
10 home improvement companies are based in the Indesit 10 176 Italy Europe 3,823
United States.

Top 10 home improvement products companies, 2010
Product Top FY10
Stanley Black 1 90 United States North America 8,410
Decker
Masco 2 97 United States North America 7,592
Fortune Brands 3 101 United States North America 7,142
Mohawk 4 132 United States North America 5,319
Kohler 5 149 United States North America 4,680 e
Husqvarna 6 152 Sweden Europe 4,488
TTI (Techtronic 7 197 Hong Kong Asia/Pacific 3,388
Industries)
Scotts Miracle- 8 211 United States North America 3,140
Gro
JELD-WEN 9 217 United States North America 3,000 e
Armstrong 10 229 United States North America 2,766

e = estimate

32

The eight Top 250 leisure goods companies are Top leisure goods companies, 2010
still dominated by Japan’s Nintendo, despite the Product Top FY10
company’s 29 percent plunge in 2010 sales on top sector 250 net sales
of a 22 percent sales decline in 2009. There were a
Nintendo 1 64 Japan Asia/Pacific 11,868
couple changes in the ranking in the middle of the
Mattel 2 119 United States North America 5,856
list: Namco Bandai overtook Yamaha, and Hallmark
Namco Bandai 3 151 Japan Asia/Pacific 4,612
moved ahead of Hasbro. All eight leisure goods
Yamaha 4 156 Japan Asia/Pacific 4,374
companies are based in Japan or the United States.
Hallmark 5 168 United States North America 4,100
Hasbro 6 172 United States North America 4,002
The personal and household products top 10
Electronic Arts 7 187 United States North America 3,589
is quite an international group with companies
Konami 8 214 Japan Asia/Pacific 3,018
headquartered in seven countries. As noted above,
in 2010, Philips Electronics was moved out of the
electronics sector to join this group as the second-
largest manufacturer of personal and household Top 10 personal household products companies, 2010
products. As the rest of the top 10 moved down to Product Top FY10
accommodate Philips, Avon fell off the list.
Procter 1 4 United States North America 82,559
The Asia/Pacific region accounts for six of the 10 Gamble
Top 250 tire manufacturers. The only change in Philips 2 15 Netherlands Europe 33,754
this sector in 2010 is that Japan’s Sumitomo Rubber L’Oreal 3 22 France Europe 25,888
overtook Italy’s Pirelli as the fourth largest company. Henkel 4 32 Germany Europe 20,041
With the exception of Pirelli, all of the tire companies Kimberly-Clark 5 36 United States North America 19,746
moved up in the overall Top 250 ranking in 2010. Colgate- 6 42 United States North America 15,564
Palmolive
SCA 7 43 Sweden Europe 15,195
Kao 8 49 Japan Asia/Pacific 13,886
Reckitt 9 52 United Europe 13,071
Benckiser Kingdom
Maxingvest 10 55 Germany Europe 12,741

Top 10 tire companies, 2010
Product Top FY10
Bridgestone 1 16 Japan Asia/Pacific 32,680
Michelin 2 23 France Europe 23,757
Goodyear 3 37 United States North America 18,832
Sumitomo 4 102 Japan Asia/Pacific 6,904
Rubber
Pirelli 5 109 Italy Europe 6,438
Yokohama 6 112 Japan Asia/Pacific 6,081
Rubber
Hankook Tire 7 139 South Korea Asia/Pacific 5,058
Toyo Tire 8 195 Japan Asia/Pacific 3,441
Rubber
Cooper Tire 9 199 United States North America 3,361
Rubber
Kumho Tires 10 213 South Korea Asia/Pacific 3,044

e = estimate


Consumer Products Top 250 newcomers, 2010

Top 250 rank Name of company Country of origin Dominant format
67 Motorola Mobility Holdings, Inc. United States Electronic Products
81 Marfrig Alimentos S.A. Brazil Food, Drink Tobacco
90 Stanley Black Decker, Inc. United States Home Improvement
Products
163 Phillips-Van Heusen Corporation United States Fashion Goods
222 Natura Cosméticos S.A. Brazil Personal Household
Products
223 Triskalia France Food, Drink Tobacco
233 Rosen’s Diversified Inc. United States Food, Drink Tobacco
235 Videocon Industries Limited India Electronic Products
237 Wimm-Bill-Dann Foods OJSC Russia Food, Drink Tobacco
241 Emmi AG Switzerland Food, Drink Tobacco
243 Spectrum Brands Holdings, Inc. United States Personal Household
Products

Top 250 newcomers Aggressive organic growth contributed to double-
Eight companies joined the ranks of the Top 250 for digit sales increases for India’s Videocon Industries,
the first time in 2010, while three other companies Brazil’s Natura Cosméticos, and Russia’s Wimm-Bill-
made a return visit. Landing in the top 100 were Dann Foods. Rosen’s Diversified, a U.S.-based meat
Motorola Mobility (split from Motorola Inc., now processor, and Emmi, a Swiss dairy foods processor,
Motorola Solutions), Marfrig Alimentos (acquisition), complete the list of newcomers.
and Stanley Black Decker (merger). Phillips-Van
Heusen made the list through the acquisition of The recognition as a member of the Top 250 will be
Tommy Hilfiger. Triskalia, a new France-based food short-lived for two of these companies: Wimm-Bill-
and meat processing company, was formed in 2010 Dann was acquired by PepsiCo in February 2011, and
through the merger of three French agricultural Motorola Mobility has signed a definitive agreement
cooperatives: Coopagri Bretagne, Cam 56, and to be acquired by Google.
Union Eolys. Spectrum Brands rejoined the Top 250
following its merger with small appliance maker
Russell Hobbs in June 2010.

34

50 fastest growing consumer products companies, 2010

FY10 FY10 FY10 FY10 FY10
growth Top 250 net sales net sales net profit
rank sales rank Company name Country Product sector (US$mil) growth margin
1 90 Stanley Black Decker, Inc. United States Home Improvement Products 8,410 125.0% 2.4%
2 163 Phillips-Van Heusen United States Fashion Goods 4,220 103.8% 1.2%
Corporation
3 81 Marfrig Alimentos S.A. Brazil Food, Drink Tobacco 9,064 65.1% 0.9%
4 130 Sodiaal Union France Food, Drink Tobacco 5,339 61.7% 0.6%
5 17 JBS S.A. Brazil Food, Drink Tobacco 31,426 60.5% -0.5%
6 69 GD Midea Holding Co., Ltd. China Home Furnishings 11,030 57.7% 5.4%
Equipment
7 6 Apple Inc. United States Electronic Products 65,225 52.0% 21.5%
8 54 BRF – Brasil Foods S.A. Brazil Food, Drink Tobacco 12,947 42.6% 3.5%
9 85 Gree Electric Appliances, Inc. China Home Furnishings 8,941 42.3% 7.1%
of Zhuhai Equipment
10 153 SanDisk Corporation United States Electronic Products 4,463 41.5% 26.9%
11 127 San Miguel Corporation Philippines Food, Drink Tobacco 5,478* 41.3% 9.8%
12 8 PepsiCo, Inc. United States Food, Drink Tobacco 57,838 33.8% 11.0%
13 80 Compagnie Financière Switzerland Fashion Goods 9,120 33.2% 15.7%
Richemont SA
14 34 Research In Motion Limited Canada Electronic Products 19,907 33.1% 17.1%
15 111 Sichuan Changhong Electric China Electronic Products 6,171 32.6% 1.1%
Co. Ltd

Fastest 50 The fastest 50 were more representative of the
Merger and acquisition activity heated up in 2010 consumer products industry as a whole in 2010
in the consumer products industry compared with than they were in 2009 when 43 of the companies
a lean year in 2009 (see MA drivers in consumer operated in either the food, drink, and tobacco
products sector remain strong beginning on sector (34) or the electronic products sector (9).
page 38). Fifteen of the 50 fastest-growing consumer A rising tide lifted at least most boats in 2010, as
products companies, or 30 percent, were involved all but one of the eight major product sectors are
in a significant acquisition in 2010 (defined as a deal represented. Only the leisure goods sector is absent
valued at $100+ million), many of which have been from the list of fastest-growing companies in 2010.
noted throughout this report. This includes 10 of the
top 20 fastest-growing companies, demonstrating Not surprisingly, from a geographic perspective,
the importance of acquisitions as a major driver of one-third of the companies (17 of 50) are from
growth. In addition, several others made a number emerging markets. The BRIC countries, in particular,
of smaller acquisitions. Growth was also driven by are well represented. Of the 14 Top 250 BRIC-based
strong brands, product innovation, and increased companies, 12 appear among the fastest 50.
demand for consumer goods in emerging markets.

All of these factors contributed to a composite
growth rate of nearly 30 percent for the fastest 50.
These companies grew 3.5 times faster than the Top
250 as a whole in 2010 (29.2 percent composite net
sales growth vs. 8.4 percent), but they were not as
profitable (7.1 percent composite net profit margin
vs. 8.5 percent). Indicative of an improving, albeit
fragile, global economic environment, sales for the
fastest 50 grew at a much more rapid rate in 2010
compared with 2009 when composite sales for the
group rose 18.2 percent.


FY10 FY10 FY10 FY10 FY10
growth Top 250 net sales net sales net profit
rank sales rank Company name Country Product sector (US$mil) growth margin
16 107 Tingyi (Cayman Islands) Holding China Food, Drink Tobacco 6,681 31.5% 9.2%
Corp.
17 27 Lenovo Group Limited Hong Kong Electronic Products 21,594 30.0% 1.3%
18 117 Megmilk Snow Brand Co., Ltd. Japan Food, Drink Tobacco 5,899 28.2% 1.9%
19 175 Ruchi Soya Industries Ltd. India Food, Drink Tobacco 3,958 26.4% 1.2%
20 210 Hermès International SCA France Fashion Goods 3,188 25.4% 18.0%
21 198 L.D.C. SA France Food, Drink Tobacco 3,372 23.7% 1.9%
22 50 Groupe Lactalis France Food, Drink Tobacco 13,810 22.4% 3.0%
23 10 Kraft Foods Inc. United States Food, Drink Tobacco 49,207 21.8% 8.4%
24 222 Natura Cosméticos S.A. Brazil Personal Household 2,932 21.1% 14.5%
Products
25 77 Dairy Farmers of America United States Food, Drink Tobacco 9,800 21.0% 0.4%
26 199 Cooper Tire Rubber Company United States Tires 3,361 20.9% 4.9%
27 23 Compagnie Générale des France Tires 23,757 20.8% 5.9%
Établissements Michelin S.C.A.
28 180 Controladora Mabe S.A. de C.V. Mexico Home Furnishings 3,720e 20.0% n/a
Equipment
29 217 JELD-WEN, Inc. United States Home Improvement Products 3,000e 20.0% n/a
30 237 Wimm-Bill-Dann Foods OJSC Russia Food, Drink Tobacco 2,600 19.2% n/a
31 136 Essilor International S.A. France Personal Household 5,168 19.1% 12.1%
Products
32 56 Dr. August Oetker KG Germany Food, Drink Tobacco 12,558 18.9% n/a
33 118 The Swatch Group Ltd. Switzerland Fashion Goods 5,873 18.8% 17.7%
34 192 Swarovski AG Austria Fashion Goods 3,532 18.2% n/a
35 213 Kumho Tire Co., Ltd. South Korea Tires 3,044 18.2% -1.1%
36 234 Humana Group Germany Food, Drink Tobacco 2,656 18.1% 0.3%
37 74 Uni-President Enterprises Corp. Taiwan Food, Drink Tobacco 10,586 18.0% 4.9%
38 230 Herbalife Ltd. United States Food, Drink Tobacco 2,734 17.6% 10.6%
39 225 Vizio, Inc. United States Electronic Products 2,900e 17.3% n/a
40 3 Panasonic Corporation Japan Electronic Products 101,704 17.2% 1.0%
41 95 TCL Corporation China Electronic Products 7,668 17.0% 0.9%
42 113 Jarden Corporation United States Personal Household 6,023 16.9% 1.8%
Products
43 143 ITC Limited India Food, Drink Tobacco 4,885 16.4% 22.0%
44 140 Red Bull GmbH Austria Food, Drink Tobacco 5,026 15.9% n/a
45 37 The Goodyear Tire Rubber United States Tires 18,832 15.5% -0.9%
Company
46 40 adidas AG Germany Fashion Goods 15,921 15.5% 4.7%
47 102 Sumitomo Rubber Industries, Japan Tires 6,904 15.3% 4.0%
Ltd.
48 243 Spectrum Brands Holdings, Inc. United States Personal Household 2,567 15.1% -7.4%
Products
49 144 Groupe SEB SA France Home Furnishings 4,849 15.0% 6.7%
Equipment
50 114 Charoen Pokphand Foods PCL Thailand Food, Drink Tobacco 6,008 14.5% 7.2%
Fastest 50** 29.2% 7.1%
Top 250** 8.4% 8.5%

* Unable to determine if company’s reported sales exclude excise taxes
** Group growth rates are sales-weighted, currency-adjusted composites; Group profit margins are sales-weighted composites

36

Study methodology and data sources Group financial results
To be considered for this list, a company must first This report uses sales-weighted composites rather
have been designated as a manufacturer (primary than simple arithmetic averages as the primary
SIC code 20-39). Each company was then analyzed measure for understanding group financial results.
in an attempt to determine if the majority of its fiscal Therefore, results of larger companies contribute
2010 sales were derived from consumer products more to the composite than do results of smaller
versus commercial or industrial products. Broadly companies. Because the data have been converted
defined, these are products produced for and to U.S. dollars for ranking purposes and to facilitate
purchased by the ultimate consumer. Generally, these comparison among groups, composite growth rates
products are marketed under well-known consumer also have been adjusted to correct for currency
brands. We have excluded contract manufacturers – movement. While these composite results generally
organizations that make products under contract for behave in a similar fashion to arithmetic averages,
other companies – and included only the companies they provide better representative values for
whose brands are on the final products. We also benchmarking purposes.
have excluded motor vehicles, as this industry is not
relevant to the vast majority of the target audience Composites and averages for each group were based
for this analysis. only on companies with data. Not all data elements
were available for all companies.
Companies whose primary business was the sale
of consumer products were included among the It should also be noted that the financial information
Top 250 based on their total fiscal 2010 net sales, used for each company in a given year was accurate
which may include sales of commercial and industrial as of the date the financial report was originally
products as well as consumer products. Excise taxes issued. Although a company may have restated prior-
were excluded from the sales of tobacco and drinks year results to reflect a change in its operations or as
companies. Our fiscal 2010 definition encompasses a result of an accounting change, such restatements
fiscal years ended through June 2011. are not reflected in this data. This study is not an
accounting report. It is intended to provide an
A number of sources were consulted to develop the accurate reflection of market dynamics and their
Top 250 list including Hoovers, Factiva, OneSource, impact on the structure of the consumer products
Amadeus, and Forbes Largest Private Companies list. industry over a period of time. As a result of these
The principal data sources for financial information factors, growth rates for individual companies may
were annual reports, SEC filings, and information not correspond to other published results.
found in companies’ press releases, fact sheets, or
websites. If company-issued information was not
available, other public-domain sources were used,
including trade journal estimates, industry analyst
reports, and various business information databases.

In order to provide a common base from which to
rank the companies, net sales for non-U.S. companies
were converted to U.S. dollars. Exchange rates,
therefore, have an impact on the results. OANDA.
com was the source used for the exchange rates.
The average daily exchange rate corresponding to
each company’s fiscal year was used to convert that
company’s results to U.S. dollars. Individual company
growth rates and other financial ratios, however,
were calculated in the company’s local currency.


MA drivers in consumer products sector remain
strong
Consumer products MA activity and trends According to data from mergermarket.com, an
Over the past two years, the consumer products independent MA intelligence tool, the total number
industry has recovered from its 2008-2009 slump. of deals completed by consumer products companies
Sales and earnings have been remarkably robust increased to 1083 in 2010 from 945 in 2009 when
despite continuing macro-economic uncertainty the MA market turned down. Transactions with a
generated by the Eurozone crisis, U.S. deficit concerns, value of $100 million or more rose even more rapidly.
and political upheaval in the Middle East – not to The number of these larger deals surged 41 percent
mention declining incomes, high unemployment, compared with 2009. The recovery in the volume
weak housing market activity, and price-conscious of acquisitions in the consumer products industry
consumers and suppliers. Many consumer products continued through the first half of 2011.
companies have been adept at managing costs and
conserving cash, resulting in strong balance sheets.
As a result, merger and acquisition activity began to
rebound in the fourth quarter of 2009.

Merger acquisition activity by consumer products companies, 2001-2011

Total Average Average
# deals value of value of Total value value
with disclosed- disclosed- # deals with # deals of deals of deals
Total # disclosed value deals value deals undisclosed with value $100+ mil $100+ mil
deals value (US$mil) (US$ mil) value $100+ mil (US$mil) (US$mil)
2011 1067 540 $145,799 $270 527 187 $135,272 $723
2010 1083 557 $174,415 $313 526 174 $161,955 $931
2009 945 468 $179,598 $384 477 123 $169,832 $1,381
2008 1229 685 $252,760 $369 544 207 $237,739 $1,148
2007 1331 830 $222,900 $269 501 258 $206,091 $799
2006 1286 812 $134,516 $166 474 201 $116,810 $581
2005 1111 695 $205,648 $296 416 196 $191,654 $978
2004 926 521 $94,776 $182 405 144 $84,351 $586
2003 695 441 $138,690 $314 254 114 $128,869 $1,130
2002 560 383 $76,578 $200 177 124 $68,137 $549
2001 530 406 $123,282 $304 124 126 $113,934 $904

Results reflect deals completed during the calendar year by consumer products companies; acquired companies may be in
any industry

Source: mergermarket.com; accessed March 13, 2012

38

Merger acquisition activity by consumer products companies, Q1 2008 – Q4 2011

400 110

100
350
90
300
80

250 70

Value (US$bil)
# deals

60
200
50

150 40

30
100
20
50
10

0 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011

# deals with disclosed value # deals with undisclosed value Total value of disclosed-value deals (US$bil)

Results reflect deals completed during the calendar year by consumer products companies; acquired companies may be in
any industry

Source: mergermarket.com; accessed March 13, 2012

Although activity levels were up, deal values MA drivers in consumer products industry
were not. Financial markets remain volatile, and While respondents to recent Deloitte surveys indicate
companies’ appetite for risk has fallen. A decrease lower expectations for MA activity in the near-term,
in the risk appetite of buyers means that sellers three main trends will continue to drive deals in the
have had to concede some ground in their pricing consumer products sector in the longer run:
expectations to ensure successful deal completions.
• International expansion (particularly into emerging
For all deals where the value was disclosed the markets).
average deal value fell from $384 million in 2009
to $313 million in 2010 and further to $270 million • arket consolidation to strengthen market share
M
in 2011. The average value of $100+ million deals and achieve further economies of scale.
dropped even faster, to $931 million in 2010 from a
decade-high $1,381 million in 2009. The downward • Portfolio rationalization/non-core divestments.
trend continued in 2011 to $723 million. The ongoing
economic uncertainty suggests the decrease in
valuations will likely continue in 2012.


For the Top 250 and other large consumer products Top acquisitions predominantly in fast-moving
companies, the search for growth will be a consumer goods sectors
compelling, ongoing driver for mergers, acquisitions, In 2011, 33 deals with values in excess of
and joint venture activity. However, many $500 million were completed by consumer products
companies with cash resources face the challenge companies. Of these deals, 17 had values in excess of
of diminished organic growth opportunities in their $1 billion.
traditional markets. Increasingly, companies are
seeking to establish footprints in higher-growth The food, drink and tobacco sector continues to see
emerging markets. Notably, attractive high-growth a relatively high volume of MA activity compared
opportunities extend well beyond the much- to most other consumer products sectors. Food and
publicized BRIC markets as evidenced by: drinks companies acquiring other food and drinks
companies or brands accounted for 18 of the 33
• Heineken’s brewery acquisitions in Ethiopia. largest deals. The largest transaction in 2011 was
SABMiller’s $12.9 billion acquisition of Australia’s
• Electrolux’s foray into Chile. Foster’s Group.

• Turkish investments by both Diageo and SABMiller. Many of the larger beverage companies have been
active in gaining a foothold in high-growth markets
• British American Tobacco’s investment in Colombia. or building on an existing presence. PepsiCo’s
acquisition of Wimm-Bill-Dann now makes it the
In more developed markets, strategic moves that largest beverage business in Russia. It also provides
strengthen market share and realize economies PepsiCo with a solid entry point into the fast-growing
of scale are driving MA activity. Key players are Central and Eastern European markets. Similarly,
acquiring businesses that allow them to build scale in Diageo’s acquisition of Mey Icki not only provides
particular regions and achieve category leadership in it with ownership of Turkey’s largest Raki (Turkish
core product areas. Unilever’s acquisition of Alberto- liquor) producer, but also with a platform to access
Culver, for example, bolsters its leadership position Turkey’s increasingly affluent middle class with
in the hair care and skin care markets. LVMH’s Diageo’s international portfolio of spirits brands.
acquisition of Bulgari will help the French luxury
goods company consolidate its position in the Meanwhile, SABMiller has transferred its Russian
high-end accessories market. and Ukrainian beer businesses to Anadolu Efes,
Turkey’s largest brewer, in return for a 24 percent
In addition, MA activity will continue to be driven shareholding. As a result of the strategic alliance,
by the disposal of non-core assets as a result of which was completed in March 2012, Anadolu Efes
portfolio rationalization or, in some cases, to satisfy will develop SABMiller’s international brands in
anti-trust concerns, such as the divestitures required Turkey, Russia, the CIS, Central Asia, and the
by Unilever’s acquisition of Alberto-Culver. Large Middle East.
companies with available cash reserves or ready
access to funding are also taking advantage of Deal activity has been more sporadic in the tobacco
opportunities arising from other companies’ financial sector, which is already highly consolidated. British
distress. Some MA activity will continue to be American Tobacco’s purchase of Colombia’s
driven by over-leveraged companies’ divestment of Protabaco for $452 million (completed in October
non-core brands, or even flagship brands. 2011) is the largest tobacco transaction in the past
two years.

Unilever was the most active company in the
personal and household products sector in 2011.
It completed the acquisition of Alberto-Culver in May
2011 and commenced some of the related anti-trust-
driven and non-core disposals.

40

Top deals* by consumer products companies, 2011

Acquired
Deal Buyer Buyer Acquired business/Parent business Acquired business Deal value
Rank Buyer location product sector company location product sector (US$mil)
1 SABMiller plc UK Food, Drink Foster’s Group Limited Australia Food, Drink $12,925
Tobacco Tobacco
2 PepsiCo, Inc. United Food, Drink Wimm-Bill-Dann Foods OJSC Russia Food, Drink $6,127
States Tobacco (66% stake) Tobacco
3 LVMH Moet France Fashion Goods Bulgari S.p.A. Italy Fashion Goods $5,406
Hennessy Louis
Vuitton SA
4 Groupe Lactalis France Food, Drink Parmalat S.p.A. Italy Food, Drink $4,700
Tobacco (71.03% stake) Tobacco
5 Unilever Group UK Food, Drink Alberto-Culver Co. United States Personal $3,595
Tobacco Household Products
6 Kirin Holdings Japan Food, Drink Schincariol Participacoes e Brazil Food, Drink $2,553
Company, Limited Tobacco Representacoes SA (50.45% Tobacco
stake)
7 Cargill Inc. United Food, Drink Provimi Holding B.V. Netherlands Food, Drink $2,167
States Tobacco Tobacco
8 Diageo plc UK Food, Drink Mey Icki Sanayii ve Tic AS Turkey Food, Drink $2,106
Tobacco Tobacco
9 Embotelladoras Mexico Food, Drink Grupo Continental, S.A.B. Mexico Food, Drink $2,099
Arca SA de CV Tobacco Tobacco
10 Nordmilch AG Germany Food, Drink Humana Milchunion eG Germany Food, Drink $2,045
Tobacco Tobacco
11 V.F. Corporation United Fashion Goods The Timberland Company United States Fashion Goods $1,961
States
12 Nestlé S.A. Switzerland Food, Drink Hsu Fu Chi International Ltd. China Food, Drink $1,700
Tobacco (60% stake) Tobacco
13 Jinro Co., Ltd. South Korea Food, Drink Hite Brewery Co., Ltd. South Korea Food, Drink $1,453
Tobacco Tobacco
14 Asahi Group Japan Food, Drink Flavoured Beverages Group New Zealand Food, Drink $1,270
Holdings, Ltd. Tobacco Holdings Limited Tobacco
15 Fila Korea Ltd. and South Korea Fashion Goods Acushnet Company/Fortune United States Leisure Goods $1,255
a consortium of Brands
bidders
16 General Mills, Inc. United Food, Drink Yoplait S.A.S. (51% stake) and France Food, Drink $1,154
States Tobacco Yoplait Marques S.A.S. (50% Tobacco
stake)/PAI Partners and Sodiaal
17 Stanley Black United Home Improvement Niscayah Group AB Sweden Industrial Products $1,131
Decker, Inc. States Products Services
18 Colgate-Palmolive United Personal Sanex brand/Unilever Plc UK Personal $947
Company States Household Products Household Products
19 Boparan Holdings UK Food, Drink Northern Foods plc UK Food, Drink $909
Limited Tobacco Tobacco
20 Unilever Group UK Food, Drink OJSC Concern Kalina (82% Russia Personal $838
Tobacco stake) Household Products
21 Labelux Group Austria Fashion Goods Jimmy Choo Ltd. UK Fashion Goods $812
GmbH
22 Coca-Cola FEMSA Mexico Food, Drink Grupo Tampico (Beverage Mexico Food, Drink $783
SAB de CV Tobacco Division) Tobacco
23 Lenovo Group Hong Kong Electronic Products Medion AG (52% stake) Germany Consumer $726
Limited Electronics Retailer


Acquired
Deal Buyer Buyer Acquired business/Parent business Acquired business Deal value
Rank Buyer location product sector company location product sector (US$mil)
24 H. J. Heinz United Food, Drink Coniexpress SA Industrias Brazil Food, Drink $723
Company States Tobacco Alimenticias (80% stake) Tobacco
25 Reckitt Benckiser UK Personal Paras Pharmaceuticals Ltd. India Personal $720
Group plc Household Products Household Products
26 Grupo Bimbo SA Mexico Food, Drink North American Fresh Bakery United States Food, Drink $709
de CV Tobacco business/Sara Lee Corp. Tobacco
27 Sodiaal Union France Food, Drink Groupe Entremont Alliance/ France Food, Drink $642
Tobacco Unifem Tobacco
28 PPR SA France Fashion Goods Volcom Inc. United States Fashion Goods $608
29 Société France Fashion Goods Piper-Heidsieck-Compagnie France Food, Drink $593
Européenne de Champenoise/Rémy Cointreau Tobacco
Participations
Industrielles (EPI)
S.A.S.
30 TOMY Company, Japan Leisure Goods RC2 Corporation United States Leisure Goods $585
Ltd.
31 AB Electrolux Sweden Home Furnishings Olympic Group Financial Egypt Home Furnishings $565
Equipment Investment Company S.A.E Equipment
32 AB Electrolux Sweden Home Furnishings Compania Tecno Industrial S.A. Chile Home Furnishings $563
Equipment Equipment
33 Ralcorp Holdings, United Food, Drink North American refrigerated United States Food, Drink $545
Inc. States Tobacco dough business/Sara Lee Corp. Tobacco

* Acquisitions by consumer products companies with deal values of $500+ million completed in 2011
Company names in bold are 2010 Global Powers of the Consumer Products Industry Top 250 companies

Source: mergermarket.com and company reports

In June, it disposed of Sanex, the personal hygiene These new geographies may also lead to an increase in
business, to Colgate-Palmolive in an innovative deal the number of joint ventures either with local players –
where Unilever simultaneously acquired Colgate- potentially through regulatory necessity – or with other
Palmolive’s Colombian detergent business. The financial buyers to share risk and pool expertise.
company continued its acquisition spree in December,
acquiring an 82 percent stake in Concern Kalina The need to manage costs downward and
(a Russian beauty company), thereby significantly productivity upward is a strong driver for further
strengthening its position in the Russian market. consolidation in the consumer products industry,
promoting MA activity motivated by scale.
MA outlook Companies will pursue deals that allow them to
Despite the fragile economic backdrop, underlying achieve category leadership positions in developed
MA drivers in the consumer products industry markets by intensifying, broadening, or filling in
remain strong. Inorganic growth strategies will most their product portfolios. At the same time, portfolio
likely continue to find favor in the absence of realistic rationalization will result in the divestment of
organic growth potential, but companies will be non-core brands in low-growth segments and
highly discerning in how they invest their money. geographies. And there will continue to be some
opportunities for distressed deals.
Going forward, companies based in mature markets
like Western Europe, the United States, and Japan For more information on MA activity and trends
will continue to seek opportunities in high-growth in the consumer products sector, see “The Deloitte
geographies in order to counter slow-growing or Consumer Products MA Survey: Stick or Twist?”
stagnant consumption at home. published December 2011.

42

Q ratio analysis

This report ranks the world’s largest consumer products suppliers The antidote to commoditization is to differentiate through better
by revenue. Yet the size of a company, although interesting, customer experience and innovation, and to communicate this
does not tell us anything about future performance. Large size differentiation to consumers through good brand management.
merely shows that a company performed well in the past and Consequently, a high Q ratio suggests that the financial markets
has, therefore, achieved critical scale. In addition, the market believe a company is doing the right things to succeed in a business
capitalization of a publicly traded consumer products company, environment characterized by commoditization. A Q ratio less than
examined alone, says something about past performance – even if one may indicate that the financial markets believe a company isn’t
only recently – but not necessarily about the future. using its physical assets in a profitable manner.

However, examining financial information to draw inferences
about future performance can, to a limited extent, be useful. Top 30 consumer products companies by Q ratio
With that in mind, this report has provided an analysis of the Hermès International SCA 9.66
Q ratio of consumer products companies for the last four years Apple Inc. 6.12
to find out how financial markets are evaluating the future
ITC Limited 6.03
prospects of the world’s largest publicly traded consumer products
Herbalife Ltd. 5.55
companies. In particular, the Q ratio helps us to infer whether
Natura Cosméticos S.A. 5.45
companies are strong in such areas as brand, differentiation, and
Lorillard, Inc. 5.02
innovation.
Philip Morris International Inc. 3.99

What is the Q ratio? Colgate-Palmolive Company 3.95

The Q ratio is the ratio of a publicly traded company’s market Tiger Brands Limited 3.66
capitalization to the value of its tangible assets. If this ratio is The Estée Lauder Companies Inc. 3.49
greater than one, it means that financial market participants assign Tingyi (Cayman Islands) Holding Corp. 3.32
a positive value to a company’s non-tangible assets such as brand NIKE, Inc. 3.26
equity, differentiation, innovation, customer experience, market Polo Ralph Lauren Corporation 3.19
dominance, customer loyalty, and skillful execution. The higher the Brown-Forman Corporation 3.15
Q ratio, the greater share of a company’s value that stems from
The Hershey Company 3.14
such intangibles. A Q ratio of less than one, on the other hand,
Compagnie Financière Richemont SA 2.60
indicates failure to generate value on the basis of intangible assets.
The Swatch Group Ltd. 2.43
It indicates that the financial markets view a consumer products
V.F. Corporation 2.41
company’s strategy as unable to generate a sufficient return on
physical assets. Indeed, it suggests an arbitrage opportunity. Essilor International S.A. 2.32

That is, if a company’s Q ratio is less than one, a company could, Church Dwight Co., Inc. 2.30
theoretically, be purchased through equity markets and the Saputo Inc. 2.23
tangible assets could then be sold at a profit. British American Tobacco plc 2.20
Charoen Pokphand Foods PCL 2.19
Why should we care about the Q ratio? Grupo Modelo, S.A.B. de C.V. 2.16
In recent years, one of the biggest challenges facing consumer The Coca-Cola Company 2.12
products companies has been the squeezing of margins due
The Clorox Company 2.11
to commoditization. That is, consumers often view the brands
L'Oreal SA 2.04
produced by these companies as undifferentiated from one another
Mattel, Inc. 2.01
except on the basis of price. This trend has been exacerbated as
Anadolu Efes Biracilik ve Malt Sanayii A.Ş. 2.00
more consumers use the Internet to compare prices and products.
Commoditization causes intense price competition and tends to McCormick Company, Inc. 1.96

drive down prices and, therefore, margins. Only the lowest cost
leaders in any product segment can compete primarily on the basis
of price. All others must do something else.


What do the numbers show?
Top 30 consumer products companies by country
This year the Q ratio was calculated for 189 publicly traded
India 2.61
consumer products companies, compared with 186 companies last
year, and 190 the previous year. The composite Q ratio (calculated US 1.80

by taking the sum of all companies’ market capitalization and Switzerland 1.68
dividing by the sum of all companies’ asset values) is 1.200, UK 1.58
compared with1.205 last year, and 1.068 and 0.800 in the Mexico 1.50
two prior years respectively. France 1.36
Germany 1.12
Here are some of the highlights of the analysis: Netherlands 1.11

The companies with the highest Q ratios come from a mix of South Korea 1.02

industries, but all possess strong brands. First on the list for the Turkey 1.01
second year is Hermes, the French luxury company. This is followed, China (excl HK) 0.98
once again, by U.S.- based Apple, the technology company whose Canada 0.92
products are not only innovative but have a strong fashion element Brazil 0.91
– one explanation of their strong brand identity. Apple also appears Sweden 0.59
as a retailer in the 2012 Global Powers of Retailing report, where Italy 0.55
it similarly ranks high in the Q ratio ranking. Next on the list are a
Japan 0.43
collection of tobacco, food, and personal care companies.
The relatively high Q ratio that characterizes these companies reflects
financial market confidence in their future ability to generate profits By region
based on strong brands. Yet a high Q ratio is no guarantee of future North America 1.78
success, and no company should ever rest on its laurels – the bottom Africa/Middle East 1.41
of the list of 189 companies (which is not included in this publication)
Europe 1.22
includes many familiar names that once dominated their industries,
Latin America 1.04
only to be eclipsed by innovative upstarts.
Asia Pacific 0.61
• Composite Q ratios were calculated by country and region. Developed markets 1.20
Country composite Q ratios were calculated only if a country had Emerging markets 1.10
more than three publicly traded companies in the top 250 list.
The country with the highest composite Q ratio is India followed by
the U.S. As was the case last year, the country with the lowest By primary product sector 2012 2011 2010 2009

Q ratio is Japan followed by Italy. Strong Q ratios are found in Fashion goods 2.26 2.16 1.02 0.58
France, Germany, Mexico, Switzerland, and the UK. The composite Personal household 1.34 1.55 1.50 1.25
Q ratio for companies based in emerging markets is only slightly Food, drink, tobacco 1.24 1.22 1.13 0.90
below that of companies based in developed markets. Electronic products 1.09 1.06 0.90 0.57
Leisure goods 1.03 1.48 1.53 1.87
• Composite Q ratios were also calculated based on a company’s
Home improvement 0.75 0.77 0.81 0.49
primary product sector. Not surprisingly, the industry with
Home furnishings 0.69 0.82 0.59 0.25
the highest composite Q ratio is fashion goods, an industry in
Tires 0.47 0.45 0.42 0.27
which success usually requires strong brand identity. The other
industries with relatively high composite Q ratios were food,
drink, and tobacco as well as personal and household products.
By contrast, such industries as tires, home furnishing, and home
improvement had relatively low composite Q ratios. As shown
in the chart, composite Q ratio for most of the industries has
increased over the past few years. However, this was not so much
the case for home furnishing, home improvement, and tires.

44

Consumer Business contacts
For Deloitte Touche Tohmatsu Limited (DTTL) and its member firms

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