2. 2
Executive Summary
Growth in the US CPG industry accelerated slightly in 2019, reaching 2.2% in measured channels, vs. 2.0% in 2018
Pricing/mix drove growth (+2.5% YoY) for third straight year in measured channels; volume declined (0.3%) for first time in seven years…
• Growth yet again propelled by small CPGs (<$1B revenue) & Private Label, taking $19B in value from medium/large players since 2014
– However, PL growth and share gain both decelerated in 2019 (3.9% growth vs. 5.4% in 2018)
• Mid-sized & large companies grew at a slower rate, but accelerated slightly (1% YoY growth vs. 0.8% in 2018)
…with continued movement towards unmeasured channels, including eCommerce, store pickup, mom and pops, and Club
Growth Leaders index highlights winning small, medium, and large companies leading their peers in share and $ / volume growth
9 of top 10 large Growth Leaders have previously been on the list – while small & medium sized leaderboards saw new top entrants
• Large ($5.5B+): Constellation Brands topped list for third year in a row, with Modelo and Corona growing ~$500M
• Medium ($1B-5.5B): Mark Anthony Brands, new to the list, ranked 3rd, driven by White Claw Hard Seltzer (+300% YoY)
• Small (<$1B): E-cigarette company NJOY, also new to the list, was fastest growing small company declining tobacco category
Given low growth environment, top 10 large Growth Leaders collectively saw volume declines for first time (-0.6% YoY growth contribution)
• However, large Growth Leaders outperformed other large peers, which declined 2.8% in volume growth contribution YoY
Growth Leaders have consistently driven performance using four levers: Innovation, Pricing, eCommerce & addressing consumer trends
• Innovation: Supplementing acquisition with core innovation across both acquired & owned brands (e.g., Tyson Hillshire snacking)
• Pricing: Increasing price surgically by sub-category to counter higher COGS and lower sales volumes (e.g., P&G in paper towels)
• eCommerce: Driving increased eComm penetration by deploying consistent approach to win on digital shelf (including click & collect)
• Consumer trends: Tapping in to evolving trends, e.g., protein on-the-go, premium and natural self care, Hispanic, etc
Small, medium & large companies that proactively address these trends will be better positioned to capture growth in years to come
3. 3
2014-
2018
CAGR
2018 %
Chg.
versus YA
2019 %
Chg.
versus YA
Private
Label 3.2% 5.4% 3.9%
Extra
Small 3.3% 3.0% 3.9%
Small 3.0% 3.0% 2.7%
Mid-Size 2.1% 1.5% 3.0%
Large 1.1% 0.8% 1.0%
Private Label (PL) and extra small (<$100M)
companies continue to drive growth
48.7% 47.1% 46.6%
16.0% 15.9% 16.0%
11.5% 12.1% 12.1%
9.1% 9.5% 9.7%
14.7% 15.3% 15.6%
20192014
$757B
2018
$836B$818B
Note: Extra Small = <$100M, Small = <$1B mid-size = $1B-$5.5B, Large >5.5B. Source: IRI data for multi-outlet and convenience (MULO+C).
IRI Consulting & BCG analysis.
+0.5
+0.5
-0.1
-1.5
+0.2
+0.1
+0.1
-0.6
+0.6 +0.3
$19B in industry
sales have shifted
from large and mid-
sized to private
label since 2014…
… however, PL
decelerating vs.
2018 growth, while
mid size / large
accelerating
% Value Share by Manufacturer Size
4. 4
0.1%
1.4%
2.9%
2012
2.3%
1.9%
0.8%
2013
2.0%
1.6%
0.2%
3.0%
0.1%
2014
0.7%2.4%
0.1%
0.6%
2015 2016
1.4%
0.0%
2.5%
2017 2018
2.5%
3.0%
-0.3%
2019
1.7%
1.5%
2.2%
2019 IRI U.S. CPG: Price/Mix carrying
growth despite volume declines
1. eCommerce not included in MULOC – select click & collect in coverage including Walmart, Kroger, and Target.
Source: IRI data for multi-outlet and convenience (MULO+C). IRI Consulting & BCG analysis.
MULOC includes Food, Drug, Mass, WM, Dollar, Club xCostco, and DeCA
Price/mix accelerating and
continuing to drive growth
Year-on-year volume
decline
Continued growth in e-
commerce, including store
pick-up, delivery and
shipment1
Observations
Channel growth
Price/mix
Volume
Change $ sales vs. prior year (%)
5. 5
2019 Growth Leaders
Which CPG companies are
winning in the US and why?
Eighth annual report
First to compare public and private
CPG company performance
430+ CPG manufacturers with >$100M
sales in measured channels1
Top 10 large: >$5.5B sales
Top 15 midsize: $1.0—$5.5B sales
Top 15 small: $100M—$1B sales
Three distinct sets of top CPG
winning companies:
Disaggregation of the companies’
underlying performance
1. Multi-outlet and convenience (MULOC) retailers are defined as food, drug,
mass, Walmart, club (excluding Costco), dollar, military, and convenience
6. 6Source: IRI and BCG analysis
DisaggregationThree Growth metrics
Dollar sales % change
Growth contribution due to distribution versus
productivity
Volume sales % change
Growth due to volume versus pricing
Price increases analyzed by true price versus mix shift
Dollar share point
change
Percent portfolio gaining, holding and losing share
Category dynamics (e.g., category trends, portfolio
concentration)
1
2
3
We use a composite growth index to understand who is winning
7. 7
2019 CPG Growth Leaders
Note: Extra Small = <$100M, Small = <$1B Medium = $1B-$5.5B, Large >5.5B
Source: IRI data for multi-outlet and convenience (MULO+C). IRI Consulting and BCG analysis
6 66
7 77
8 88
9 99
10 1010
11 1 11 11
22 2 12 12
33 3 13 13
44 4 14 14
55 5 15 15
Large Companies
Double click on next page
Mid-Size Companies Small Companies
New to list versus 2018 New to list versus 2012-182018 Growth Leader
*
Fairlife acquisition by
Coca-Cola completed in
Jan 2020
9. 9
• Model Especial contributed ~90% of Modelo brand
growth (+$330M in sales and +31M in volume)
with more focused strategy
Constellation Brands is #1 large Growth Leader for 3rd consecutive
year, driven by Mexican beer - primarily Modelo
Expanded key distribution channels: on-
premise and mom & pop store presence1
Targeted specific geographies and MSAs—
became #1 beer in Southern California
Focused on advantaged price point,
benefiting from shift to premium products
Pursued core Hispanic consumer e.g.,
Brian Ortega UFC commercial
1. Unmeasured IRI channels
Source: Industry Week, BCG analysis; Note: Constellation was previously on mid-size Growth Leader company list
• New products drove combined ~$100M sales
growth for Corona brand, including Premier,
Familiar and Refresca
Successful product innovations extended
portfolio beyond Corona Extra
Corona Premier and Refresca enabled brand
to defend against impact of hard seltzers
Built innovative marketing platform for
Premier based on golf and the US Open
sponsorship
Will launch own seltzer product in Spring
2020
10. 10
eCommerce as a
growth engine
Focused on
emerging trends
Surgical pricing
across portfolio
Acquisitions
supplemented by
innovation
1 2 3 4
2019's large Growth Leaders have driven sustained growth since
2014, leveraging several common drivers
2014-2019
Revenue CAGR
Growth for Large
Companies
Top 10
Growth
Leaders
Others
1.7%
0.5%
3+x
Key growth drivers – deep dives on coming pages
11. 11
Acquisitions an important driver of growth for several large leaders
Over last 5 years, mix of acquisitions and portfolio shaping (incl. innovation) have driven growth
2019 Growth $M vs. YA
(Acquired in last 5 years vs. Legacy)
Acquisition in last
5 years as %
of portfolio
Acquisition in last 5
years % of total
growth Leading acquisitions from last 5 eyars
3% 1%
9% 19%
53% 85%
8% 100%
0% 1%
7% 15%
2% 12%
5% -2%
3% 7%
54% >100%
Note: Based on acquisitions made in last five years (since 2014)
Source: IRI Consulting and BCG analysis
3
10
261
51
19
287
1 342
1,133 15
184 33
75
358-7
138
-14 89
480
323
337
343
1,148
217
157
148
63
477
138
351
Acquired in last 5 years Legacy Declining Acqusition
1 Acquisitions supplemented by innovation
12. 12
Growth Leaders continued to drive innovation with acquired and
owned brands
Acquired growth: Driving new category
innovation from acquired brands
Organic growth: Growing through
innovation with established brands
Note: IRI sales data for first 52 weeks of 2019 and 2018
Source: IRI New Product Pacesetters (2019)
Hillshire Snacking was introduced post-
Tyson acquisition, marketed as a
“perfectly portioned protein snack for an
on-the-go experience”, capturing
momentum from protein trend
Activia Probiotics Dailies delivered
occasion-focused innovation through a
smaller, on-the-go format (3.1 fluid oz),
promoting the ease of working
probiotics into a healthy and active
routine
+$33M
+$17M
'18-19 YoY Product Sales
Danone Baileys Coffee Cream was
launched after Danone’s acquisition of
Whitewave and International Delight
leveraging the expertise acquired via
acquisition to build a new licensee-based
expansion in the coffee creamer category+$22.5M
The Blend, a pattie with beef and plant-
based protein was introduced as part of
Tyson's new "Raised & Rooted" brand to
capitalize on the growth of plant-based
protein while leveraging Tyson's historic
strength in animal protein
1 Acquisitions supplemented by innovation
13. 13Source: BCG and IRI Consulting Analysis, Merger Market segments Consumer Database
Small Growth Leaders Acquired Since 2012
2012 2013 2014 2015 2016 2017 2018 2019
Year of
Acquisition
Acquired Investment/JV
Acceleration in acquisition and investment in small Growth Leaders
1 Acquisitions supplemented by innovation
14. 14
Top 10 large Growth Leaders decreased in volume overall (vs. prior
years where volume increased)
Large Companies
Volume and Price Contribution
Note: Extra Small = <$100M, Small = <$1B Medium = $1B-$5.5B, Large >5.5B
Source: IRI MULO+C POS data. IRI Consulting and BCG analysis
2 Surgical pricing across portfolio
5.4
3.3
2.3
-4.6
-0.6
-0.2
-2.1
-0.6
-0.7
1.9
3.7
0.5
8.5
3.1
2.2
5.1
2.4
2.0
2.5
0.8
2.1
4.5
7.3
3.4
2.7
3.9
3.0
1.7
1.3
Volume % Chg vs. YA Price/Mix % Chg vs. YA
Double click on next pg
Top 10 Large Growth Leaders
Only top 4 increased volume
-2.8
4.0
2.9All Others
Top 10 3.3
0.1
-0.6
Price/Mix % Chg vs. YA
Volume % Chg vs. YA
2.9%
Top 4
vol.
growth
-2.5%
6-10
vol.
decline
15. 15
Top categories by sales growth and
corresponding ASP increase1 Examples of ASP Changes at SKU Level
P&G executed
surgical pricing increases
across portfolio to drive value
• Driven by consumer insight
and competitive landscape
• ASP increase differed by
category; 38 of 56
categories saw an ASP
increase relative to prior
year
1. Same SKUs with volume above 10k both 2019 and 2018. Excludes new and discontinued SKUs 2. Sales growth for Bounty
Select a Size 12-roll SKU exceeded overall Bounty brand growth due to partial cannibalization for smaller pack sizes.
Source: IRI data for multi-outlet and convenience (MULO+C). IRI Consulting and BCG analysis.
Surgical pricing across portfolio
4.2%
4.1%
7.1%
4.6%
Baby Wipes
Toilet Tissue
Paper Towels
0.5%
0.5%
Diapers
Laundry Care 2.8%
Deodorant
Air Fresheners
Cold/Allergy/Sinus Liquids
0.6%
2.3%Cold/Allergy/Sinus Tablets
3.0%Gastrointestinal - Liquid
2018
ASP
$18.02
2019
ASP
$18.84
YoY Sales
Growth
+$128M2
SKU
12 roll
$13.41 $13.55 +$36M
30 oz
$804 M
$614 M
$544 M
$193 M
$58 M
$29 M
$28 M
$26 M
$24 M
$21 M
Sales Growth ASP Growth
"We’re looking, as we innovate, to
be able to modestly [increase] price
and still build value
-Jon Moeller, Vice Chairman, COO, CFO
Q4 Earnings call
2
16. 16
3 eCommerce as a growth engine
eCommerce
growing in
significance –
estimated to be
~10% of CPG
portfolio by 2022
20222019
~4-5%
~10%
Digital shelf Growth Leader winners
deploy a consistent approach
Investing in a digital commerce organization
(CoE or dedicated digital teams)
4
Leveraging investment in trade marketing in an
eCommerce setting (e.g., banner ads on amazon)
3
Restructuring channel operations and
merchandising to ensure right SKUs are available
1
2 Optimizing digital shelf / marketing for pre-
purchased in store pick ups at key retailers
5 Having a dedicated brand store optimized for
user experience (DTC considerations)
eComm penetration as % of CPG sales
GL DTC Store Examples
Note: eCommerce includes all forms of online shopping (including click & collect)
Source: IRI Ecommerce Trends
17. 17Source: IRI Data for MULOC (multi-outlet and convenience), IRI Consulting and BCG analysis
Winning manufacturers and brands are tapping into evolving
consumer trends
Protein On-the-Go
Quicker and easier options to meet daily
protein needs
Better-for-You Snacking
Healthier versions of traditional snacks
Simple & Transparent
Natural, organic, minimal ingredients
Hispanic focused
Geared toward growing Hispanic population
emphasizing heritage
Multi-Functional Beverages
Beverages offering superior hydration or
energy through simpler and cleaner
ingredients
Premium/Natural Self Care
Willingness to pay a premium to take care of
body and/or household
Deep dive in subsequent pages
New in 2019
4 Focused against consumer trends
18. 18
Multi-functional beverages are outpacing traditional sugary
alternatives
Growth leader examples: Multi-functional beverages
provide consumers with many nutritional benefits
Energy
Hard Seltzer
Source: IRI ILD POS database, MULOC. IRI Consulting and BCG analysis
Double click follows
11%
6%
6%
17%
11%
6%
2%
0%
-1%
-1%
-2%
Refrigerated Teas
232%Hard Seltzer
Sports Drinks
Refrigerated Coffee
Seltzer/Sparkling/Mineral
Energy Drinks
Iced Coffee
Regular Soft Drinks
Rfg Juices/Drinks
Drink Mixes
Canned And Bottled Tea
Bottled Juices
2019 YOY growth (%)
Hard Seltzer
Energy
Sugary Alternatives
4 Focused against consumer trends
Hydration
Hydration
19. 19
2014 201920182015 2016
$1,138
$2
2017
$1 $7 $32
$308
Bang energy growth trajectory
2014-2019 retail sales, $M
Bang's path to growth had several key elements
• Identified and solved consumer friction point for energy drinks with
sports and performance benefits
• Ritualized usage on back of new need created (e.g. drink a Bang
Energy Drink before workouts)
• Targeted distribution (e.g. gyms) to reach intended audience, coupled
with effective digital marketing (e.g., Instagram / influencers)
• Disrupted "better-for-me" with primarily sugar-free formulas
Source: IRI MULOC; desk research; industry publications; BCG analysis
Year 5
Bang Energy
3x growth now
exceeding $1B by
addressing unmet need
at intersection of
energy / sports
4 Focused against consumer trends
20. 20
White Claw
Convenient,
personalized, and
better for you, driving
300%+ YoY growth
Source: IRI MULOC; BCG and IRI Consulting analysis
Multifunctional convenience
Easily transportable product (slim, 12 oz. can) with advertising
campaigns that highlight consumption in a variety of occasions
Personalized flavor
Flavored with clean and simple fruit based flavors, available in variety
packs to appeal to varied tastes and occasions
Better-for-you
Won drinkers from other alcohol categories with light, healthier
alternative (100 calories only relative to beer); significant growth also
coming from wine & spirits drinkers
57
20172016 2018 2019
10
194
834
+449%
+241%
+330%
Distribution1
Velocity2
35
$31
45
$113
60
$277
76
$804
1 – Max ACV Wtd Distribution, 2 – Dollars per $MM ACV
4 Focused against consumer trends
White Claw growth trajectory
2014-2019 retail sales, $M
21. 21
Protein on-the-go: Ready-to-eat and convenient offerings driving
market growth
6%
5%
5%
7%
2%
Nutritional Health Bars
Frozen Breakfast Entrees
Dried Meat Snacks
Refrigerated Meat / Cheese / Snack
Frozen Breakfast Handheld
2019 YOY growth (%)
Source: IRI ILD POS database, MULOC. IRI Consulting and BCG analysis
Growth leader examples:
4 Focused against consumer trends
Exemplar set of growth driving brands by sub-category
Snacking
Breakfast
Old
trapper
Growth Leader Brand
YoY Growth %
Hillshire
snacking
One
Brands
Jimmy Dean
Delights
Jimmy Dean
Delights
+24%
+25%
+57%
+25%
+27%
Jimmy Dean +7%
Jimmy Dean +4%
Sub-category
growth
22. 22
Premium on-the-go
Protein rich breakfast
experience driving 8%
YoY growth
Growth trajectory (2014-2019)
Targeted Marketing
Targeting a younger
audience more flexible
in their eating patterns
with a "breakfast all
day" campaign
Innovative Product
Product development
fueled by "consumer
pursuit of heartier
breakfast solutions" that
can be taken on the go
Biscuit roll-ups:
Eggs, meat, and
cheese in "roll-up"
Morning combos:
pancakes and
muffins in on-
the-go bites
868 948
152Jimmy Dean Delights
2016
166
1,023
2017
174
2018
207
1,284
1,076
2019
Jimmy Dean
1,020 1,114 1,197
+8%
$M Retail Sales
4 Focused against consumer trends
11.0%
7.4%
$ CAGR
Better For You
Increased breakfast
offerings in the "better
for you" segment while
still maintaining high
protein
23. 23
Summary:
Key
takeaways
2.2% growth for CPGs in 2019 (slight acceleration vs.
2018) driven by
• Price and mix: Volume declined for the first year (-
0.3% growth) even among large growth leaders
• Smaller companies (<$1B) and Private Label: These
players are growing at 3-4% and have taken $19B in
sales from larger and midsized companies since '14
Four drivers of Growth Leaders success
• Acquisitions supplemented by innovation
• Surgical pricing across portfolio
• eCommerce as a growth engine
• Focused against emerging trends
1
2
3
4
Please reach out to discuss how these opportunities may apply
24. 24
Reach out for more information
Peri Edelstein Aman Gupta Jeremy Kuriloff Dr. Krishnakumar
(KK) Davey
Managing Director
and Partner, BCG
Managing Director
and Partner, BCG
Principal, BCG President, Strategic
Analytics, IRI
Kuriloff.Jeremy@bcg.comGupta.Aman@bcg.comEdelstein.Peri@bcg.com Krishnakumar.Davey@iriworldwide.com
28. 28
Few Small Companies Have Consistently Led
Small Growth Leaders – Historical Positioning
2012 2013 2014 2015 2016 2017 2018
Small
2019
Note: Extra Small = <$100M, Small = <$1B Medium = $1B-$5.5B, Large >5.5B
Source: IRI MULO+C POS data. IRI Consulting and BCG analysis
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1 Kind
Kind
All Market All Market
Kind Kiss Kiss
All Market
Roll Kiss
Completely
Fresh Foods
Icelandic Milk
& Skyr Corp.
Kiss
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1
2
3
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5
6
7
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13
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15
1
2
3
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10
11
12
13
14
15
1 2
3
3
1
8
1
2
4
1
2
2
2
3
1
#of
times
on list
0
29. 29
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