packaged goods

U.S. CPG Sales Up 3.1% In 2015; Smaller Companies' Share Grab Slowed

U.S. consumer product goods sales growth accelerated to 3.1% last year — the strongest growth since 2012, and a significant gain over 2014’s 2.3% rate, according to the fourth annual CPG industry report from The Boston Consulting Group and IRI.

Small and midsize companies again stole share from large ones in 2015, but at a slightly lower rate: 0.5 points ($2.7 billion) versus 0.7 points ($4.5 billion) in 2014. Since 2011, these companies have grabbed a cumulative 2.7 share points, worth $18 billion.
Small ($100 million to $1 billion in IRI-measured retail sales) and midsize ($1 billion to $5 billion) companies accounted for 46.4% of the total $670 billion in U.S. CPG sales last year.

The small/midsize growth was driven largely by these companies’ ability to gain wider distribution for their products, according to IRI data. Of course, some of these companies have powerful partners or investors. Fairlife is distributed by The Coca-Cola Company, for instance. 



Smaller companies are also boosting sales through online retailers and social media promotion, whereas substantial growth in large CPG companies still tends to be driven by higher product sales in existing retail channels.

Top 10 Small, Midsize and Large Growth Leaders

The CPG study examines more than 400 public and private CPG companies with annual U.S. retail sales of more than $100 million, ranks them based on consumer sales in measured channels (a composite growth index that combines dollar sales, volume sales and dollar market share performance), and analyzes trends driving performance.

Last year’s fastest-growing small CPG companies were Quest Nutrition, Teva Pharmaceuticals, Fairlife, Bai, Idahoan Foods, CCF Brands, Promotion in Motion, KIND, All Market (Vita Coco) and Fifth Generation (Tito’s Handmade Vodka), Kiss Products, Palermo Villa, Ready Pac Foods, Advanced Fresh Concepts, and Daisy Brand. 

The top midsize growth performers were GlaxoSmithKline, Hostess Brands, Starbucks, Eggland’s Best, Sterilite, Red Bull, Constellation Brands, Gruma, Land O’Lakes, Monster Energy, Sargento Foods, Johnsonville Sausage, Pfizer, WH Group, and WhiteWave Foods.

The fastest-growing large CPG companies (more than $5 billion in retail sales) were Reynolds American (which has acquired Lorillard), Unilever, Altria, Mars, Dr Pepper, Snapple, Coca-Cola, PepsiCo, Johnson & Johnson, Mondelez International and Proctor & Gamble.

Snack, tobacco, beverage and food companies with leading shares in the convenience store channel — including Altria, PepsiCo, Red Bull, Mars and Constellation Brands — benefitted from a sales surge in that channel last year, thanks to lower gas prices and lower unemployment. The convenience channel’s 6.9% growth significantly outpaced all other channels’ 3% growth. As a result, while C stores accounted for 18.7% of all measured-channel sales, they contributed 39.6% in terms of growth.

Food CPG Drivers: Healthful, High-Protein, Convenient

Healthful or “mindful” snacks and meals, along with high-protein offerings, were dominant growth drivers across CPG food and beverage makers of all sizes.

Companies growing through healthful products include Bai (low-calorie antioxidant fruit drinks infused with the outer layer of coffee berries), Vita Coco (coconut beverages and oil), Ready Pac Foods (on-the-go salads), KIND (whole-grain bars and clusters) and Sargento (seeing particular growth with its Balanced Breaks fruit, nut and cheese snacks). 

Companies cashing in on high protein offerings include Quest Nutrition (protein bars, powder, chips and shakes), Fairlife (ultra-filtered, high-protein milk), WhiteWave Foods (Horizon organic dairy and Silk plant-based beverages) and Vega foods and beverages containing plant-based protein). 

Another continuing, dominant trend is the demand for convenient foods and beverages. That resulted in big growth for many ready-to-eat products in individuals portions, including snacks, fruit and portable prepared meals.

While most of the fastest-growing large companies also offer healthy foods and beverages, “indulgent” products still drive much of their growth, point out the analysts.

Mars, for instance, saw strong sales growth in M&M’s chocolate, Juicy Fruit gum and Dove chocolate and ice cream last year, and Ben & Jerry’s and Breyers were major growth drivers for Unilever.

Carbonated soft drinks still account for dominant sales shares (if not growth trends) for Coca-Cola, PepsiCo and Dr Pepper Snapple, and the Corona and Modelo beer brands are driving Constellation Brands’ growth.

Also note that Hostess Brands, Red Bull and Johnsonville Sausage are among the fastest-growing midsize company.

Outside of the food/beverages and tobacco sectors, the top-growth companies are dominated by pharmaceutical manufacturers. The high performers are succeeding largely by bringing prescription drugs to the over-the-counter market, according to the analysis. For example, Pfizer and GlaxoSmithKline began marketing nonprescription Nexium and Flonase, respectively, and Teva Pharmaceuticals introduced an OTC contraception product.

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